Cost of not maintaining a product configuration system

Jeppe Bredahl Rasmussen, Anna Myrodia, Lars Hvam, Niels Henrik Mortensen*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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Abstract

This article investigates the cost implications of using a not sufficiently maintained 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 benefits of utilizing a PCS are related to its maintenance and data quality.
Original languageEnglish
JournalInternational Journal of Industrial Engineering and Management
Volume9
Issue number4
Pages (from-to)205-214
ISSN2217-2661
DOIs
Publication statusPublished - 2018

Keywords

  • Product configuration system
  • Cost calculation accuracy
  • Benefits of product configuration systems
  • Challenges of product configuration systems
  • Case study

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