Impact on cost accuracy and profitability from implementing product configuration system – A case-study

Anna Myrodia, Katrin Kristjansdottir, Lars Hvam

    Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-review

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    Abstract

    This article aims at analyzing the impacts from implementing a product configuration system (PCS) on company profitability and improved cost estimations in the sales phase. Companies that have implemented PCSs have achieved substantial benefits in terms of being more in control of their product assortment, making the right decisions in the sales phase and increased sales of optimal products. Those benefits should have direct impact on improved profitability in terms of increased contribution ratios and more accurate cost estimations used to determine the price in the budgetary quotations. As the literature describes, there are various benefits from implementing a PCS, however the effects on the company’s profitability have not been discussed in details. This study analyzes the impact from implementing a PCS on the accuracy of calculations in the quotations and the impact on the relative contribution ratios. For that reason, a configure-to-order (CTO) manufacturing company has been investigated. A longitudinal study is performed where both the accuracy of the cost calculations and the profitability is analyzed before and after implementation of a PCS. The comparison reveals increased profitability and accuracy of the cost estimation in the sales phase can be achieved from implementing a PCS.
    Original languageEnglish
    Title of host publicationProceedings of the 17th International Configuration Workshop
    EditorsJuha Tiihonen, Andreas Falkner, Tomas Axling
    PublisherUniversity of Helsinki
    Publication date2015
    Pages11-17
    Publication statusPublished - 2015
    Event17th International Configuration Workshop - Vienna, Austria
    Duration: 10 Sep 2015 → 11 Sep 2015
    Conference number: 17

    Conference

    Conference17th International Configuration Workshop
    Number17
    CountryAustria
    CityVienna
    Period10/09/2015 → 11/09/2015
    SeriesCEUR Workshop Proceedings
    ISSN1613-0073

    Cite this

    Myrodia, A., Kristjansdottir, K., & Hvam, L. (2015). Impact on cost accuracy and profitability from implementing product configuration system – A case-study. In J. Tiihonen, A. Falkner, & T. Axling (Eds.), Proceedings of the 17th International Configuration Workshop (pp. 11-17). University of Helsinki. CEUR Workshop Proceedings
    Myrodia, Anna ; Kristjansdottir, Katrin ; Hvam, Lars. / Impact on cost accuracy and profitability from implementing product configuration system – A case-study. Proceedings of the 17th International Configuration Workshop. editor / Juha Tiihonen ; Andreas Falkner ; Tomas Axling. University of Helsinki, 2015. pp. 11-17 (CEUR Workshop Proceedings).
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    title = "Impact on cost accuracy and profitability from implementing product configuration system – A case-study",
    abstract = "This article aims at analyzing the impacts from implementing a product configuration system (PCS) on company profitability and improved cost estimations in the sales phase. Companies that have implemented PCSs have achieved substantial benefits in terms of being more in control of their product assortment, making the right decisions in the sales phase and increased sales of optimal products. Those benefits should have direct impact on improved profitability in terms of increased contribution ratios and more accurate cost estimations used to determine the price in the budgetary quotations. As the literature describes, there are various benefits from implementing a PCS, however the effects on the company’s profitability have not been discussed in details. This study analyzes the impact from implementing a PCS on the accuracy of calculations in the quotations and the impact on the relative contribution ratios. For that reason, a configure-to-order (CTO) manufacturing company has been investigated. A longitudinal study is performed where both the accuracy of the cost calculations and the profitability is analyzed before and after implementation of a PCS. The comparison reveals increased profitability and accuracy of the cost estimation in the sales phase can be achieved from implementing a PCS.",
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    Myrodia, A, Kristjansdottir, K & Hvam, L 2015, Impact on cost accuracy and profitability from implementing product configuration system – A case-study. in J Tiihonen, A Falkner & T Axling (eds), Proceedings of the 17th International Configuration Workshop. University of Helsinki, CEUR Workshop Proceedings, pp. 11-17, 17th International Configuration Workshop, Vienna, Austria, 10/09/2015.

    Impact on cost accuracy and profitability from implementing product configuration system – A case-study. / Myrodia, Anna; Kristjansdottir, Katrin; Hvam, Lars.

    Proceedings of the 17th International Configuration Workshop. ed. / Juha Tiihonen; Andreas Falkner; Tomas Axling. University of Helsinki, 2015. p. 11-17 (CEUR Workshop Proceedings).

    Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-review

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    Myrodia A, Kristjansdottir K, Hvam L. Impact on cost accuracy and profitability from implementing product configuration system – A case-study. In Tiihonen J, Falkner A, Axling T, editors, Proceedings of the 17th International Configuration Workshop. University of Helsinki. 2015. p. 11-17. (CEUR Workshop Proceedings).

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