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4.1.2 Product Upgrades Based on Minimum Expected Quality Loss
Author(s) -
Langford Gary
Publication year - 2009
Publication title -
incose international symposium
Language(s) - English
Resource type - Journals
ISSN - 2334-5837
DOI - 10.1002/j.2334-5837.2009.tb00971.x
Subject(s) - upgrade , product (mathematics) , quality (philosophy) , revenue , function (biology) , investment (military) , business , industrial organization , operations management , economics , risk analysis (engineering) , computer science , mathematics , finance , philosophy , geometry , epistemology , evolutionary biology , politics , political science , law , biology , operating system
The need to maintain or sustain a product's usefulness to or beyond its initial lifecycle expectancy is often driven by investment costs, market share, sales revenues, new product release schedules, standardization, uninterruptable usage, or declining budgets. A question then arises as to how often to upgrade a product. Aside from these typically discussed rationales, the paper concludes that a viable approach is to consider the upgrade cycle that results in the minimum cost based on quality. A general quality loss function was developed to investigate the expected quality loss for quality characteristics such as nominal‐the‐best, smaller‐the‐best, and larger‐the‐better. It is shown that when a shape parameter is introduced into the loss function, product upgrade cycles can be managed to minimize the expected losses.