Platform flexibility strategies: R&D ...
Document type :
Article dans une revue scientifique
Title :
Platform flexibility strategies: R&D investment versus production customization tradeoff
Author(s) :
Van Den Broeke, Maud [Auteur]
Lille économie management - UMR 9221 [LEM]
Boute, Robert [Auteur]
van Mieghem, Jan [Auteur]
Lille économie management - UMR 9221 [LEM]
Boute, Robert [Auteur]
van Mieghem, Jan [Auteur]
Journal title :
European Journal of Operational Research
Pages :
475-486
Publisher :
Elsevier
Publication date :
2018-10-16
ISSN :
0377-2217
English keyword(s) :
Manufacturing
Product development
Platform
Flexibility
Newsvendor networks
Product development
Platform
Flexibility
Newsvendor networks
HAL domain(s) :
Sciences de l'Homme et Société
Sciences de l'Homme et Société/Gestion et management
Sciences de l'Homme et Société/Gestion et management
English abstract : [en]
Product platforms are assets that are shared by multiple products. We study the optimal investment in platform flexibility. Each platform type is characterized by its functionality that determines its R&D investment and ...
Show more >Product platforms are assets that are shared by multiple products. We study the optimal investment in platform flexibility. Each platform type is characterized by its functionality that determines its R&D investment and unit production cost, as well as the customization cost to produce the end products from the platform. The firm can invest in a portfolio of specialized platforms that align with the functionalities of a specific product and flexible platforms that cover the functionalities of a product range at lower customization cost. We characterize the optimal platform portfolio strategy using an ex-ante investment versus ex-post production customization tradeoff curve and show comparative statics of these costs, demand forecast, and the decision maker’s regret and risk attitude. Flexible platforms provide operational hedging for risk-averse decision makers who thus should invest more than risk-neutral counterparts. In contrast to manufacturing flexibility, the regret of sub-optimal investments increases as demand is more negatively correlated.Show less >
Show more >Product platforms are assets that are shared by multiple products. We study the optimal investment in platform flexibility. Each platform type is characterized by its functionality that determines its R&D investment and unit production cost, as well as the customization cost to produce the end products from the platform. The firm can invest in a portfolio of specialized platforms that align with the functionalities of a specific product and flexible platforms that cover the functionalities of a product range at lower customization cost. We characterize the optimal platform portfolio strategy using an ex-ante investment versus ex-post production customization tradeoff curve and show comparative statics of these costs, demand forecast, and the decision maker’s regret and risk attitude. Flexible platforms provide operational hedging for risk-averse decision makers who thus should invest more than risk-neutral counterparts. In contrast to manufacturing flexibility, the regret of sub-optimal investments increases as demand is more negatively correlated.Show less >
Language :
Anglais
Peer reviewed article :
Oui
Audience :
Internationale
Popular science :
Non
Collections :
Source :