Costs of complexity in Hewlett-Packard's inkjet printer business

This thesis deals with the cost of complexity at Hewlett-Packard's inkjet printer business. The term cost of complexity refers to the costs associated with offering a more diverse portfolio. The most basic example is to consider the situation of increasing the number of items for sale from one to two. As the second item is added setup costs will be incurred since there will now be changeovers from the production of one item to the other. If there are unique components in the added product then there will be additional suppliers to be managed etc. As more and more products are added in search of additional revenue the cost of complexity can rise dramatically. Eventually the costs associated with offering the additional end items can outweigh the incremental revenue earned. While it is easy to measure the revenue from these peripheral offerings it is difficult to determine the associated costs. This combination means that the number of end items offered can grow unabated. In this thesis we examine a framework for analyzing the trade-off between the costs and benefits of offering increased variety.

Department dc:contributor.department

Leaders for Manufacturing Program at MIT

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2007

Author dc:creator

• Naughton, Cassian

Advisor dc:contributor.advisor

• Stephen Graves and Pablo Parrilo.

• Sloan School of Management.
• Electrical Engineering and Computer Science.
• Leaders for Manufacturing Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/39690

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/39690