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PERFORMANCE IMPLICATIONS OF PRODUCT LIFE CYCLE EXTENSION: THE CASE OF THE A‐10 AIRCRAFT
Author(s) -
Jones Shawn R.,
Zsidisin George A.
Publication year - 2008
Publication title -
journal of business logistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.611
H-Index - 79
eISSN - 2158-1592
pISSN - 0735-3766
DOI - 10.1002/j.2158-1592.2008.tb00092.x
Subject(s) - life extension , service (business) , business , supply chain , investment (military) , economic shortage , capital (architecture) , asset (computer security) , product (mathematics) , extension (predicate logic) , industrial organization , finance , risk analysis (engineering) , operations management , economics , marketing , computer science , medicine , philosophy , politics , political science , law , history , programming language , computer security , mathematics , gerontology , linguistics , geometry , archaeology , government (linguistics)
Firms are faced with challenging decisions when capital equipment reaches the end of its designed service life. This research examines the risks of deciding to extend the retirement date of a capital asset in terms of performance and cost and offers recommended actions to mitigate this risk. Through study of the United States Air Force's A‐10 aircraft, the authors analyze one example of decreased performance and increased costs experienced when supply chain implications are not explicitly considered when making service life extension decisions. In this case, the Air Force's efforts to save money through life extension of existing aircraft actually exceeded the seemingly enormous initial investment of acquiring new aircraft. Arguments are presented suggesting the Air Force, in particular, may reap benefits from forming supply chain relationships and creating continuity plans to manage problems such as parts shortages and cost increases when extending the use of capital assets beyond its intended service life.