Department of Mathematics

GM

Proposed Project for the MSU Industrial Math Students

Project : Understanding the cost evolution of a product

A new product can be very expensive. Following its introduction, a product's cost generally decreases over time. Choose two or more products, at least one with high technology and one with average-to-low technology, then determine their cost curves over time. Select, investigate, and analyze parameters that may predict their decline in cost. Examples for such parameters might be economies of scale, investment in R&D, competition, improvements in their manufacture, and size of market. Can curves approximating cost evolution be defined with respect to these parameters? Can some of these curves be compared under classifications by product, industry, or process differences? For some products price may be a necessary surrogate for cost.