Melding Marketing and Engineering: Product Line Design Optimization and Improving Power Train Deployment across Automotive Models



This talk will be somewhat unusual, in that it will start by summarizing work done over the last decade in conjunction with the University of Michigan’s Design Science Program, culminating in a recent article in IJRM and commentaries by Roberts, by Hauser, and by Liberali (included in the readings). The latter part of the talk will discuss research now under way in conjunction with a multi-year grant from the Ford Motor Company.
The main idea are that marketers and engineers need to make their models intercommunicate, to avoid the costly, time-consuming back-and-forth when engineers cannot build what marketers say consumers want, or marketers cannot sell what engineers want to build. We propose a novel method, Analytical Target Cascading (ATC), to accomplish this “disintermediated intercommunication”, illustrating it with an application to optimal product line design for a relatively simply durable. The Ford-based project will address optimizing how power trains (e.g., V4 vs. V6 engines) are apportioned across car models, a decision made years in advance and potentially entailing billions in losses for even modest forecasting errors. The problem involves planning a production schedule when there is flexibility in terms of which cars specific engines can be put into (the “engineering” portion) and in pricing, advertising, promotional incentives (“marketing”), but not in terms of increasing total demand for a particular kind of engine, which involves building new production facilities.
Contact information:
Dr. G. Liberali