A prescriptive production-distribution approach for decision making in new product design

Abstract

The production problem in product design consists of determining technically feasible options and implementing collective decision making to decide which alternatives to produce. A problem with considering collective decision making in the production problem is that it may not be possible to define, a priori, a group utility function, due to the difficulty of making interpersonal comparisons of the members' preferences. Constructing a group utility function and solving the production problem may lead to unacceptable alternatives for some of the members. The distribution problem involves consideration of individual preferences in satisfying group decision-making situations. If production and distribution of the products are considered simultaneously, the preferences of the members are taken into account, explicitly leading to acceptable solutions. This approach also allows for explicit consideration of a company business strategy in determining which products to develop. A production-distribution approach is outlined and demonstrated for the design of a power electronics module product with a group of decision makers consisting of three customers and a manufacturer. In addition to explicit consideration of the customers' preference, some business strategies are also considered, leading to product alternatives acceptable to the customers and manufacturer.