Coproduct Technologies: Product Line Design and Process Innovation

• 成果类型: Article
• 署名作者: Chen, Ying-Ju; Tomlin, Brian; Wang, Yimin
• 署名单位: University of California System; University of California Berkeley; Dartmouth College; Arizona State University; Arizona State University-Tempe
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2013.1738
• 发表日期: 2013
• 页码: 2772-2789
• 关键词: quality segmentation; process technology; pricing

摘要

The simultaneous production of different outputs (coproducts) is observed in the chemical, material, mineral, and semiconductor industries among others. Often, as with microprocessors, the outputs differ in quality in the vertical sense and firms classify the output into different grades (products). We analyze product line design and production for a firm operating a vertical coproduct technology. We examine how the product line and profit are influenced by the production cost and output distribution of the technology. We prove that production cost influences product line design in a fundamentally different manner for coproduct technologies than for uniproduct technologies where the firm can produce products independently. For example, with coproducts, the size and length of the product line can both increase in the production cost. Contrary to the oft-held view that variability is bad, we prove the firm benefits from a more variable output distribution if the production or classification cost is low enough.