Product mix and the acquisition of the assets needed for their production are interdependent decisions. However, these decisions are frequently evaluated independently of…
Product mix and the acquisition of the assets needed for their production are interdependent decisions. However, these decisions are frequently evaluated independently of each other and with conceptually different decision models. This article expands activity-based costing (ABC) to incorporate the cost of capital. The resulting model traces the cost of capital to products and thereby measures the economic value added (EVA) from their production. The discounted value of a product’s EVA over its life is equivalent to its net present value (Hartman, 2000; Shrieves & Wachowicz, 2001). The discounted EVA of a product also equals the net present value of the assets used to manufacture the product. Consequently, evaluating products with an ABC model incorporating the cost of capital enables product mix and capital budgeting decisions to be evaluated simultaneously. The article also examines the role of ABC when product mix decisions are made at the product and portfolio levels of the firm’s operations.
The objective of this paper is to empirically test and verify the enablers of volume flexibility and product-mix flexibility and to assess the influence of these…
The objective of this paper is to empirically test and verify the enablers of volume flexibility and product-mix flexibility and to assess the influence of these flexibilities on operational performance.
A research framework consisting of nine pairs of hypotheses was developed using an extensive literature review. Using a self-administered questionnaire, 391 responses were collected, and these responses were analyzed using descriptive statistics, factor analysis, and structural equation modeling techniques.
The findings empirically confirm the enablers of volume flexibility and product-mix flexibility. The proposed model explained 59 percent variance in volume flexibility and 63 percent variance in product-mix flexibility. Volume flexibility and product-mix flexibility together explained 38 percent variance in operational performance.
Theoretically, this study advances flexibility literature in two significant ways. First, the study conducts first of its kind quantitative empirical investigation considering upstream, downstream, and internal integration practices as enablers of volume flexibility and product-mix flexibility. Second, this study adds to the flexibility literature by suggesting the positive influence of volume and product-mix flexibility on the operational performance of firms.
The study reinforces the role of enablers in the development of volume and product-mix flexibilities. Thus, the study provides a comprehensive view of flexibility enablers that can be used as a diagnostic tool, which practitioners can use to assess and deploy flexibility.
To achieve a full understanding of the role of marketing from plan to profit requires a knowledge of the basic building blocks. This textbook introduces the key concepts in the art or science of marketing to practising managers. Understanding your customers and consumers, the 4 Ps (Product, Place, Price and Promotion) provides the basic tools for effective marketing. Deploying your resources and informing your managerial decision making is dealt with in Unit VII introducing marketing intelligence, competition, budgeting and organisational issues. The logical conclusion of this effort is achieving sales and the particular techniques involved are explored in the final section.
Production planning and control is a complex task in multiple batchproduction situations. Work orders arrive in a random manner and,considering the diverse product array…
Production planning and control is a complex task in multiple batch production situations. Work orders arrive in a random manner and, considering the diverse product array, work centre capacities loaded and available also change in a random manner. A particular product mix may suit a particular load pattern generated and, to be realistic, the optimum product mix must be considered a dynamic parameter rather than a static one. Considering the multitude of parameters associated, it is difficult to determine the optimum product mix in a manual system. The use of a computer simulation model to determine the optimum product mix and also the criteria to be used in arriving at the pricing strategy under multiple batch production situations are discussed.
This case study focuses on basic business approaches in the decision-making by considering owners and stakeholders’ perspective in highlighting the related issues in…
This case study focuses on basic business approaches in the decision-making by considering owners and stakeholders’ perspective in highlighting the related issues in customer service, marketing (marketing mix and product mix), strategy, business management and operational management of the sport business in the private sector of Abu Dhabi. At the end of this exercise, students should have a clear consideration of the following: understanding of the equestrian business products and services elements, description of the marketing mix the equestrian business products and services elements, definition of the product mix approach of the marketing mix in equestrian business management, distinguishing needs of product mix alternative decisions approach in equestrian business management in the private sector and labeling of two main customer services based issues and propose a solution using product mix alternatives approaches (expand/eliminate).
Mandara Equestrian Club (MEC) was the culmination of a dream for Faysal Urfali, a Lebanese entrepreneur, and his wife, who lived in (and loved) United Arab Emirates (UAE) for more than 20 years ago. The dream started in 2012, when the Urfali family was vacationing in Spain. They fell in love with the Arabian breed of horses, famous for their wide, flat forehead, soulful eyes, broad muzzle, erect ears, slender neck and flowing, shining mane. Arabian horses are also renowned for their beauty, loyalty, strength and intelligence. Arabian horses are an intrinsic part of Arabian tradition and heritage, always described in Arabic literature as a sign of pride, courage and dignity, in recitation legends of wars. The Urafalis did not have experience with horses during that period, but that did not stop them from starting an equine business in the UAE, specifically in the Emirate of Abu Dhabi. Urfali started MEC in Al Rahba City, a small town in the north site of Abu Dhabi, the Capital of UAE. At its inception in 2013, MEC was open only for private use. In 2014, Urfali decided to open the club to the public due to high demand from visitors and horses’ lovers who were visiting the place to see the horses and request horse rides. MEC carries forward Urfali’s passion for Arabian horses, as it specializes in the care and training of show horses. MEC also offers other equine activities and services for both horse owners and horseback riders. In early 2019, Urfali conducted a meeting to assess MEC’s financial statements and discuss daily business operations. The meeting determined that the club was facing several business challenges to address which, it needs some substantial changes in order to maintain its smooth-functioning. Challenges the club faced involved customer relationship management, customer attraction and skill shortages in the industry. Urfali understood that focusing on MEC as a business operation means raising the marker of success to more than just the fulfillment of a dream. Will MEC be able to keep its focus with such changes?
Complexity academic level
Undergraduate students majoring in Business Management, Marketing and Strategic Management.
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CSS 11: Strategy
Describes the complementary standard mixed loads concept (the standard mix concept in short), which allows for assembling mixed loads at an upstream echelon. These…
Describes the complementary standard mixed loads concept (the standard mix concept in short), which allows for assembling mixed loads at an upstream echelon. These standard mixed loads are assigned to customer orders at an echelon downstream of the chain. Describes two applications of the use of the standard mix concept in order to identify up‐front the logistic advantages, both in inventory reduction and in handling reduction. Presents the basic principles of the concept and offers some mathematical modelling. Describes the effects on the inventory at the various points of the supply chain, and presents some simulation results. Concludes that the concept offers new perspectives for supply chain management and intermodal transport.
This paper focuses on the processes by which different manager groups can influence product mix changes. The paper analyses three different types of process ‐ dominance…
This paper focuses on the processes by which different manager groups can influence product mix changes. The paper analyses three different types of process ‐ dominance, compromise and integration ‐ through which the extensiveness and renewal of a product mix was shaped by groups of marketing and production managers, general managers and owner‐managers. Each of the groups developed their own understanding, or “logic of action”, about the most desirable product mix. It is shown that these logics of action play an important role in product mix changes, not as isolated elements but in interaction with one another and the industry context. This paper provides a detailed empirical analysis of a product mix pattern over a long duration by illustrating the three different forms of managerial interaction by which the product mix was achieved. The contribution of the study is twofold. First, the study shows that historical and contextual studies are required in order to understand the role and relevance of marketing activities and marketing based actors in business firms. Second, the study gives evidence for the usefulness of inter‐disciplinary research and discussion within the field of marketing studies.
This study examines consumer attitude toward thirteen different marketing mix elements related to the products of the USA, Japan, Germany, Italy, the UK, and France in…
This study examines consumer attitude toward thirteen different marketing mix elements related to the products of the USA, Japan, Germany, Italy, the UK, and France in Qatar, an oil rich emerging international market. These six countries are the top six exporters to Qatar. A cross section of 98 Qatari consumers participated in the study. The common theme across the seven hypotheses that have been developed and tested is that Qatari consumers prefer most the marketing mix elements related to the products of Japan and the USA, followed by those of Germany and the least preferred ones are those of Italy, the UK, and France. The hypotheses have been partially supported. The marketing mix elements pertaining to Japanese products take the lead. The products of the USA, Germany, and the UK occupy the second position, while the products of Italy and France trail behind all others.
This paper aims to investigate the factors enabling or hindering the simultaneous pursuit of volume flexibility and mix flexibility within a supply chain through the lens…
This paper aims to investigate the factors enabling or hindering the simultaneous pursuit of volume flexibility and mix flexibility within a supply chain through the lens of a manufacturing plant seeking to implement a build‐to‐order (BTO) strategy.
To accomplish this empirical investigation, an in‐depth case study involving a manufacturing plant and its supply chain was designed. Prior to primary and secondary data collection, this research setting had already decided to implement a BTO strategy and had, moreover, carefully assessed several practices for BTO strategy implementation, as well as their interactions.
The studied case suggests that a number of approaches typically used to increase volume flexibility, actually negatively affect mix flexibility and vice versa. The existence of such trade‐offs may ultimately inhibit the implementation of a BTO strategy and this was the case in the studied company. Nevertheless, empirical evidence also suggests that, to some extent, volume flexibility and mix flexibility may be achieved synergistically, as initiatives such as component standardization or component‐process interface standardization would improve both volume flexibility and mix flexibility.
The pursuit of volume flexibility and mix flexibility in implementing a BTO strategy in a specific setting and from primarily an operations management perspective was investigated. As such, the findings can be complemented by viewing the case study results through the lens of other established general management theories or by replicating the study in different research settings.
While past research informs us about how manufacturing firms can successfully achieve mix flexibility or volume flexibility, there are few insights for understanding how volume flexibility and mix flexibility can both be simultaneously achieved within a manufacturing plant and its supply chain. This research fills this gap in the literature and contributes to the development of a theory of BTO strategy implementation, especially in terms of volume flexibility, mix flexibility and their interactions.
The paper provides an overview of research published in the innovation and operations management (IOM) literature on 15 methods for cost management in new product…
The paper provides an overview of research published in the innovation and operations management (IOM) literature on 15 methods for cost management in new product development, and it provides a comparison to an earlier review of the management accounting (MA) literature (Wouters & Morales, 2014).
This structured literature search covers papers published in 23 journals in IOM in the period 1990–2014.
The search yielded a sample of 208 unique papers with 275 results (one paper could refer to multiple cost management methods). The top 3 methods are modular design, component commonality, and product platforms, with 115 results (42%) together. In the MA literature, these three methods accounted for 29%, but target costing was the most researched cost management method by far (26%). Simulation is the most frequently used research method in the IOM literature, whereas this was averagely used in the MA literature; qualitative studies were the most frequently used research method in the MA literature, whereas this was averagely used in the IOM literature. We found a lot of papers presenting practical approaches or decision models as a further development of a particular cost management method, which is a clear difference from the MA literature.
This review focused on the same cost management methods, and future research could also consider other cost management methods which are likely to be more important in the IOM literature compared to the MA literature. Future research could also investigate innovative cost management practices in more detail through longitudinal case studies.
This review of research on methods for cost management published outside the MA literature provides an overview for MA researchers. It highlights key differences between both literatures in their research of the same cost management methods.