9/3/2014 Authors: Tianyi Cai and Theodor Freiheit
J. Mech. Des. 136(10), 101701 (Jul 21, 2014) (12 pages)
doi: 10.1115/1.4027981
Customers want good value when they buy products. However, the value perceived by a customer is affected in part by the benefits they get from the product and the cost of designing the product. This paper discusses how managers can better assign work-hours and other resources necessary to design products. Designers use these resources to create and improve upon the benefits the product delivers but at a cost that determines how the customer sees its value. Since the cost from the design process can be uncertain, for example because customer needs evolve and may not be fully understood, designers may have to repeat design activities to ensure the design is correct – Figure 1. A mathematical model is proposed that shows how resources are transformed into value. This model allows resources to be assigned to a design projects optimally to control costs. Examples of the model’s application demonstrate strategic and tactical resource assignment in scenarios developed from the computer industry and for design projects.
Figure 1 – Conceptual Model of Value Creation Cell
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