Communication and Uncertainty in Concurrent Engineering
Management Science
Managing new product definition in highly dynamic environments
Management Science
Product Development Decisions: A Review of the Literature
Management Science
Journal of Engineering and Technology Management
Design and Use of Preference Markets for Evaluation of Early Stage Technologies
Journal of Management Information Systems
Target Age and the Acquisition of Innovation in High-Technology Industries
Management Science
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Selecting the right technologies to incorporate in new products is a particularly challenging aspect of new product definition and development. While newer advanced technologies may offer improved performance, they also make the product development process more risky and challenging. In this paper, we focus on the problem of technology selection and commitment under uncertainty, a major challenge to firms in turbulent environments. We argue that the "pizza-bin" approach of rejecting prospective technologies outright may not serve firms well when the pressure to differentiate products is enormous. After motivating the challenges and decisions facing firms using a real-life application from Dell Computer Corporation, we formulate a mathematical model of a firm that must define its products in the presence of technology uncertainty. Specifically, the firm faces two options: (i) aproven technology that is known to be viable and (ii) aprospective technology that offers superior price to performance results but whose viability is not a fully certain outcome. To minimize the impact of technology uncertainty, we consider two approaches to design flexibility, termedparallel path andsufficient design, which allow the firm to concurrently develop its products while the technology is being validated. Our analysis helps understand appropriateness of the different flexible design approaches. We illustrate our model with the Dell portable computer example and note the managerial implications of our analysis.