Full citation

Booker, M. D., Drake, A. R., & Heitger, D. L. (2007). New Product Development: How Cost Information Precision Affects Designer Focus and Behavior in a Multiple Objective Setting. Behavioral Research in Accounting, 19, 19-41.

Format: Peer-reviewed article

Type: Research — Non-experimental

Experience level of reader: Fundamental

Annotation: This study simulates a portion of the new product development process with the use of engineering and business university students acting as the product designers. It investigates the effects of providing product designers with relative design cost information versus specific design cost information. It also looks at how different levels of cost information impacts development of different types of products; incremental (requiring minor changes to an existing product) or radical (requiring major changes such as a new technology to an existing product). Providing specific cost information (actual dollar amounts for various design component choices) resulted in more cost-effective designs for each product type.

Setting(s) to which the reported activities/findings are relevant: Large business, Small business (less than 500 employees)

Knowledge user(s) to whom the piece of literature may be relevant: Manufacturers, Researchers

Knowledge user level addressed by the literature: Organization

This article uses the Commercial Devices and Services version of the NtK Model

Primary Findings

Tip: When developing a new product that is a variation of an existing product, providing specific quantifiable design costs to the engineers will result in a more cost effective product.
Experimental study. ANOVA results F = 13.82, p < .001
Occurrence of finding within the model: Step 4.12

Secondary Findings

Tip:  It takes more time and effort for people to process information that is delivered through words instead of numbers. Consider this when developing implementation tools.
Occurrence of finding within the model: KTA Step 1.A