LIFE-CYCLE COST - A MODEL AND APPLICATIONS

This research is an effort in understanding and modeling benefits of the interaction between the design and engineering stage, and field service support. We first present a model which estimates discounted and undiscounted life cycle cost of a durable product. We incorporate the production costs and demand effects, and take into account the interaction between design engineering parameters and field service support functions. The demand side explicitly models the nonlinearities that exist in cost structure experienced by users of durable products. Implications for choosing alternative design configurations and advantages of including field failure data in making decisions at the early stages of product development are discussed.