Incremental or Derivative Products Operations Management Assignment Help

Incremental or Derivative Products

On one end of the spectrum are those products that have the least amount of innovation.These are often referred to as incremental or derivative products and are typically hybrids-or enhancements of existing products. These products are often cost-reduced versions of existing products or simply similar products with added features or functions. For example
the minor model-year changes made in the automobile industry can be seen as derivative or incremental products. Such new products require minimal changes in both product design and the manufacturing process. The resource requirements to develop these products are significantly less·than those for products that break entirely new ground because they
tend to leverage off of existing products by extending their applicability. Products in this category are crucial to the firm in that they ensure continuing near-term cash flows. They also allow a firm to containment market share in the short term by continually improving and refining existing product lines. As mentioned earlier the yearly model changes in automobiles
(when there are minor changes) provide a good example of this type of product. Companies usually can bring incremental or derivative products to market quickly. However  this does not occur automatically. A minor design change in a product sometimes can significantly impact a firm's production process. Decisions on proceeding with such' changes in a product therefore must be made with careful considerations. (This issue will be presented later in the chapter when we consider the  interaction between product and process design.)

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