Commonality in product design: Cost saving, valuation change and cannibalization

Kim, Kilsun; Chhajed, Dilip

doi:10.1016/s0377-2217(99)00271-4

Cited by 178 publications

(93 citation statements)

References 10 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…In Kim and Chhajed (2000), the firm utilizes component commonality to mitigate the cost of product variety. Desai et al (2001) and Heese and Swaminathan (2006) generalize this setup to allow the manufacturing cost to be mitigated by exerting the design effort.…”

Section: Literature Surveymentioning

confidence: 99%

Product Line Design and Production Technology

2007

View full text Add to dashboard Cite

I n this paper we characterize the impact of production technology on the optimal product line design. We analyze a problem in which a manufacturer segments the market on quality attributes and offers products that are partial substitutes. Because consumers self-select from the product line, product cannibalization is an issue. In addition, the manufacturer sets a production schedule in order to balance production setups with accumulation of inventories in the presence of economies of scale. We show that simultaneous optimization of the product line design and production schedule leads to insights that differ significantly from the common intuition and assertions in the literature, which omits either the demand side or the supply side of the equation.In particular, we demonstrate that more expensive production technology always leads to lower product prices and may at the same time lead to higher quality products. Further, a less efficient production technology does not necessarily increase total production costs or reduce consumer welfare. We also demonstrate that in the presence of production technology, the demand cannibalization problem may distort product quality upward or the number of products upward, which is contrary to the standard result.

show abstract

Section: Literature Surveymentioning

confidence: 99%

Product Line Design and Production Technology

2007

View full text Add to dashboard Cite

show abstract

“…Commonality strategies architected to deliver this variety in turn create the threat of cannibalization (Sanderson andUzumeri 1995, Kim andChhajed 2000), where customers with higher willingness-to-pay can meet their performance requirements by buying the lower-performance product. Sanderson and Uzumeri (1995) describe a case in the DRAM market, illustrating how sales trajectories can show both within-platform cannibalization and generation to generation platform cannibalization.…”

Section: Tradeoffs Caused By the Marketmentioning

confidence: 99%

Crafting Platform Strategy Based on Anticipated Benefits and Costs

Cameron

Crawley

2013

Advances in Product Family and Product Platform Design

View full text Add to dashboard Cite

show abstract

“…Kim and Chhajed [11] developed an economic model that considers a market consisting of a high segment and a low segment. Greater commonality decreases production cost but makes the products more indistinguishable from one another, which makes the product more desirable for the low segment but less desirable for the high segment.…”

Section: Cost Estimation and Component Sharingmentioning

confidence: 99%

Decomposition-Based Assembly Synthesis Based on Structural Considerations

Yetis

Saitou

2002

Journal of Mechanical Design

View full text Add to dashboard Cite

An extension of decomposition-based assembly synthesis for structural modularity is presented where the early identification of shareable components within multiple structures is posed as an outcome of the minimization of estimated production costs. The manufacturing costs of components are estimated under given production volumes considering the economies of scale. Multiple structures are simultaneously decomposed and the types of welded joints at component interfaces are selected from a given library, in order to minimize the overall production cost and the reduction of structural strength due to the introduction of joints. A multiobjective genetic algorithm is utilized to allow effective examination of trade-offs between manufacturing cost and structural strength. A new joint-oriented representation of structures combined with a "direct" crossover is introduced to enhance the efficiency of the search. A case study with two aluminum space frame automotive bodies is presented to demonstrate that not all types of component sharing are economically justifiable under a certain production scenario.

show abstract

Commonality in product design: Cost saving, valuation change and cannibalization

Cited by 178 publications

References 10 publications

Product Line Design and Production Technology

Product Line Design and Production Technology

Crafting Platform Strategy Based on Anticipated Benefits and Costs

Decomposition-Based Assembly Synthesis Based on Structural Considerations

Contact Info

Product

Resources

About