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Engineering costs and customer costs in designing product support
Author(s) -
Hegde G. G.,
Karmarkar Uday S.
Publication year - 1993
Publication title -
naval research logistics (nrl)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.665
H-Index - 68
eISSN - 1520-6750
pISSN - 0894-069X
DOI - 10.1002/1520-6750(199304)40:3<415::aid-nav3220400309>3.0.co;2-j
Subject(s) - warranty , product (mathematics) , product design , new product development , business , production (economics) , reliability (semiconductor) , computer science , marketing , process management , economics , power (physics) , physics , geometry , mathematics , quantum mechanics , political science , law , macroeconomics
Product support encompasses activities undertaken by durable goods producers to ensure their customers the continued use of the product. Examples of product support elements include after the sale activities such as providing repair services and warranty programs, as well as all the activities undertaken at the design and production stage to improve the reliability of products before they reach the market. The implications of incorporating customer costs while designing product support packages are the concern of this study. We study how the parameters of support package impact the costs incurred by customers and provide insights about selecting appropriate levels of product support. We show that the engineering orientation of maximizing the product's availability ignores market characteristics, and results in a mismatch between the corporation's support package and the customer's needs. The research is intended to be a step in understanding the interaction between design engineering parameters and customer's costs. © 1993 John Wiley & Sons, Inc.