International Journal of Industrial Engineering and Management

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Vol. 9 No. 4 (2018)
Original Research Article

Cost of Not Maintaining a Product Configuration System

Jeppe Bredahl Rasmussen
Technical University of Denmark, Section for Engineering Design and Product Development
Bio
Anna Myrodia
Technical University of Denmark, Operations Management Science
Bio
Lars Hvam
Technical University of Denmark, Operations Management Science
Bio
Niels Henrik Mortensen
Technical University of Denmark, Section for Engineering Design and Product Development
Bio

Published 2018-12-30

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Keywords

  • Product Configuration System,
  • Cost Calculation Accuracy,
  • Benefits of Product Configuration Systems,
  • Challenges of Product Configuration Systems,
  • Case Study

How to Cite

Bredahl Rasmussen, J., Myrodia, A., Hvam, L., & Henrik Mortensen, N. (2018). Cost of Not Maintaining a Product Configuration System. International Journal of Industrial Engineering and Management, 9(4), 205–214. https://doi.org/10.24867/IJIEM-2018-4-205

Abstract

This article investigates the cost implications of using a not sufficientlymaintained product configuration system (PCS). A case study is conducted to investigate the financial loss due to poor data quality in products sold through a not-maintained PCS. We calculated the financial loss by comparing the quotations generated by the not-maintained PCS and the quotations for the same product when the PCS was updated.The results indicate that the company has been selling the products with a miscalculated 20% lower cost than the actual one. Comparing this financial loss to the cost required to keep the PCS up-to-date, we show that the former is significantly higher than the latter. The research concludes that the realized success and benefitsof utilizing a PCS are related to its maintenance and data quality.

 

Article history: Received (26.10.2018); Revised (27.11.2018); Accepted (05.12.2018)  

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