Modelling trade-offs in design-accompanying life cycle cost calculation. (18th February 2010) - Mueller, David
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.