Price to win through value modelling for service offering
conference contributionposted on 2015-03-23, 14:18 authored by Linda B. Newnes, Yee GohYee Goh, Benjamin D. Lee, William R. Binder, Christiaan J.J. Paredis
a contract to deliver product service systems, and make a profit. Design/methodology/approach: Industrial case studies are used as the test bed. Combinations of subjective probability and value modelling have been used in this research. Findings: Current approaches to determine the price to win for a product oriented service contract have mainly focussed on the cost of the physical asset and its’ specification. There is little research, where the ‘value’ of the tangible and intangible aspects of a product service system to the customer is considered. The proposed approach provides the decision-maker with information on the value of their/and their competitors offering, assisting in selecting the price to bid for the service contract. Practical implications: Our approach can be used by industry to model the key value drivers for their customers and provide information on the probability of winning and probability of making a profit. This research provides a step-by-step approach for identifying uncertainties eliciting the value of the service being offered to the customer and modelling these to estimate the probability of winning. Social implications: This research provides practical guidance to decision makers and bid teams. Originality/value: Highlights how the tangible and intangible aspects of a Product Service System can be quantified in monetary terms to assist in decision-making.
- Mechanical, Electrical and Manufacturing Engineering