Uncertainty perception in bidding for Product-Service Systems under competition

This research investigates what impact of uncertainty perception arising from the existence of competition has on the pricing decision for Product-Service Systems (PSS) under uncertainty. PSS provision is an increasingly important area for many businesses and competition increases cognitive pressures on providers even further. We present an experimental study with industrial costing and bidding experts from the defence and aerospace sector. The study consisted of an experimental set-up via two questionnaires which differed in the existence of competition in the bidding scenario. The findings showed that bidding decision makers changed their evaluation of the cost estimate due to the introduction of competition but kept their evaluations of the profit margin and price bids constant. Furthermore, the participants listed the relevant sources of uncertainty that influenced their decision-making process. This research contributes to the literature in two ways. First, our findings showed that predictions from current theory regarding decision-making of cost estimation and pricing are not confirmed when competitively bidding for PSS. Second, we show uncertainty sources that influenced the decision makers and identified p the importance of internal processes of the PSS provider and environmental uncertainty

Information availability at the competitive bidding stage for service contracts

Sustainable production and consumption have become more important internationally which has led to the transformation of market structures and competitive situations into the direction of servitisation [Baines et al., 2011; Bandinelli and Gamberi, 2011]. For a manufacturing company the shift towards being a service provider is characterised by a high level of uncertainty about the future strategic development of the company caused by e.g. inadequate knowledge and information [Song et al., 2007]. For this research, a service is defined as an activity or a process which is aimed at the change of the state of the service issue such as the repair of a machine or the supply of flying hours for an aircraft [Araujo and Spring, 2006; Gadrey, 2000]. [...continues]

Adapting the SHEL model in investigating industrial maintenance

Purpose – The purpose of this paper is to identify and categorize problems in knowledge management of industrial maintenance, and support successful maintenance through adapting the SHEL model. The SHEL model has been used widely in airplane accident investigations and in aviation maintenance, but not in industrial maintenance. Design/methodology/approach – The data was collected by two separate surveys with open-ended questions from maintenance customers and service providers in Finland. The collected data was coded according to SHEL model -derived themes and analysed thematically with NVivo. Findings – The authors found that the adapted SHELO model works well in the industrial maintenance context. The results show that the most important knowledge management problems in the area are caused by interactions between Liveware and Software (information unavailability), Liveware and Liveware (information sharing), Liveware and Organisation (communication), and Software and Software (information integrity). Research limitations/implications – The data was collected only from Finnish companies and from the perspective of knowledge management. In practice there are also other kinds of issues in industrial maintenance. This can be a topic for future research. Practical implications – The paper presents a new systematic method to analyse and sort knowledge management problems in industrial maintenance. Both maintenance service customers and suppliers can improve their maintenance processes by using the dimensions of the SHELO model. Originality/value – The SHEL model has not been used in industrial maintenance before. In addition, the new SHELO model takes also interactions without direct human influence into account. Previous research has listed conditions for successful maintenance extensively, but this kind of prioritization tools are needed to support decision making in practice

A rank-3 network representation for single-affiliation systems

Single-affiliation systems are observed across nature and society. Examples include collaboration, organisational affiliations, and trade-blocs. The study of such systems is commonly approached through network analysis. Multilayer networks extend the representation of network analysis to include more information through increased dimensionality. Thus, they are able to more accurately represent the systems they are modelling. However, multilayer networks are often represented by rank-4 adjacency tensors, resulting in a N2M2 solution space. Single-affiliation systems are unable to occupy the full extent of this space leading to sparse data where it is difficult to attain statistical confidence through subsequent analysis. To overcome these limitations, this paper presents a rank-3 tensor representation for single-affiliation systems. The representations is able to maintain full information of single-affiliation networks in directionless networks, maintain near full information in directed networks, reduce the solution space it resides in (N2M) leading to statistically significant findings, and maintain the analytical capability of multilayer approaches. This is shown through a comparison of the rank-3 and rank-4 representations which is performed on two datasets: the University of Bath departmental journal co-authorship 2000-2017 and an Erdos-Renyi network with random single-affiliation. The results demonstrate that the structure of the network is maintained through both representations, while the rank-3 representation provides greater statistical confidence in node-based measures, and can readily show inter- and intra-affiliation dynamics.Comment: 17 pages, 11 figure

Manifestation of uncertainty - a classification

The aim of the research presented in this paper is to propose a classification of the manifestation of uncertainty to offer a basis for a shared understanding and characterization of the concept of uncertainty within the area of design research. During the past decade a growing number of papers about uncertainty have been published. These papers focus on different aspects and points of the design process and offer insights on different aspects of uncertainty. The research presented in this paper describes the manifestation of uncertainty and proposes a classification. The classification consists of context uncertainty arising from the situation circumstances, data uncertainty stemming from input information or data into a further process, model uncertainty resulting from the simplifications in models, and phenomenological uncertainty connected to the outcome of a process. Each of these categories is described in detail offering a basis for positioning specific research contributions published in previous ICED conferences. This offers a basis for the consideration of the appropriate uncertainty management methods

Information display for decisions under uncertainty

In the early product design stage, considering the Through Life Cost and uncertainty are important. However, the information given to the decision maker is often limited, resulting in a large level of subjectivity. This paper introduces experimental research exploring different information displays and their subjective interpretation by cost forecasters within the defence and aerospace sector. Three different kinds of information display and different levels of detail of contextual information were tested, showing that they impact the decision making process and subjective interpretation

Stakeholder perspectives on the cost requirements of Small Modular Reactors

This paper is in closed access until 11th Dec 2019.© 2018 Elsevier Ltd The cost of a nuclear power plant (NPP) is an important influence on the future commercial success of Small Modular Reactors (SMRs). At the early design stage, the cost requirements of SMRs can be derived from an analysis of the factors driving the Levelized Cost of Electricity (LCOE). It is often much later into the development process before customers are engaged and their cost requirements are known, by which time key design decisions which influence the lifecycle cost have already been locked-in. A clear understanding is required of the cost priorities for the key stakeholders who are to invest in the SMR. This paper presents a novel approach to ranking the relative importance of different cost factors used to calculate the LCOE. Using a dynamic stakeholder analysis, the key decision-makers for each stage of the SMR product lifecycle are identified. The Analytic Hierarchy Process (AHP) with pair-wise comparisons obtained from nuclear cost experts is employed to rank the different factors in terms of their relative importance on the commercial success of a near-term deployable SMR. Each expert provides a different set of rankings, although project financing cost is consistently the most important for the successful commercial deployment of the SMR. The approach presented in this paper can be used as a verification method for any power generation technology to provide confidence that cost requirements are adequately captured to design for life cycle cost competitiveness from the perspective of different stakeholders

Uncertainty in competitive bidding:A framework for product-service systems

Owing to servitisation, manufacturing companies are increasingly required to compete through the provision of services around their products. The contracts for these services are often allocated through competitive bidding where the potential suppliers submit a price bid to the customer. The pricing decision is influenced by various uncertainties. This article proposes a conceptual framework depicting these influencing uncertainties on the bidding strategy. This framework is based on three empirical studies with industry investigating different viewpoints on the decision-making process. The intention is to support the pricing decision when competitively bidding for a service contract. The framework can be applied to specific competitive bidding situations to identify the influencing uncertainties, model them and depict their influences on the pricing decision

Fission possible: understanding the cost of nuclear power

The cost of nuclear power has been debated ever since the build of the first plant at Calder Hall. Despite crippling construction delays in the 1970s and 80s, nuclear new build is again considered to meet both future demand growth and CO2 reduction targets. UK suppliers could produce around 45% of the high value components, with the potential to enter international export markets. Initially estimated at £9bn, to £16bn after Fukushima, with the most recent estimate at £24.5bn, Hinkley Point C will be the pilot build for new nuclear. The question remains, can the UK build a nuclear power station economically? The research aims to provide a methodology for estimating the cost of future nuclear build projects. This paper will review cost drivers for historic nuclear build, prior to and after their construction. Based on this analysis the paper will critique the current methodology and provide direction for the research