Authors: David Mueller
Addresses: Department of Business Administration, Technical University Ilmenau, PF 100 565, Ilmenau 98684, Germany
Abstract: It is becoming increasingly important to integrate into cost calculation processes, all costs throughout a product|s development and life span. Cost performance in design, manufacture, operation and disposal is associated with several intertemporal trade-offs – a subject about which there has been little research. This paper (1) highlights the main trade-offs in product design, (2) models unidirectional and bidirectional trade-offs between product design and later life cycle stages and (3) presents a profit-maximising solution for these trade-offs. The model|s approach enables the assignment of changing costs in manufacturing, operation and disposal in relation to their dependency on development decisions, ensuring appropriate unidirectional and bidirectional trade-offs. It shows that neglecting these trade-offs may lead to weak design decisions. This new model will enforce the accountants| contribution to successful product design.
Keywords: design-accompanying cost calculations; product design; profit maximising solutions; unidirectional trade-offs; bidirectional trade-offs; life cycle costing; product life cycle.
International Journal of Product Lifecycle Management, 2009 Vol.4 No.1/2/3, pp.290 - 310
Received: 28 Mar 2009
Accepted: 25 Nov 2009
Published online: 17 Feb 2010 *