Accurately reported product costs are essential for many managerial decisions, such as product and resource planning, pricing, product mix decisions, and cost management. Balakrishnan et al. (Manag Sci 57(3):520–541, 2011) offered valuable managerial guidance on how costing system design heuristics affect the accuracy of reported product costs. This paper tests the internal and external validity of their numerical experiments and recommendations. Our replication results show that we are able to reproduce most of the findings, thereby confirming the results’ internal validity. To test external validity and assess the robustness of their findings, we modify a key model element by implementing a resource consumption pattern that follows a four-tier Activity-Based Costing (ABC) cost hierarchy, with which we repeat the numerical experiments. Although the design heuristics are mostly robust in this modified environment, the benefits of improving the costing system design are less straightforward and less linear. For instance, single plant-wide cost drivers outperform more information-demanding costing systems with few (2–4) cost pools. Consequently, given a four-tier ABC cost hierarchy, refining the costing system incrementally can reduce accuracy, leaving costing system designers stuck in the middle. Overall, our study supports Balakrishnan et al. (2011) results’ robustness but also identifies reasons why firms may still use simple costing systems.

Cost information is critical to ease managers' decisions in daily business, but its provision is informationally demanding and error prone. Effective design choices for costing systems that can reduce errors are the subject of a growing body of research. The computational model by Anand, Balakrishnan, and Labro (2019) collates previous research in a unifying framework, turning it into a potential standard for future studies. This paper uses this framework and aims to investigate the mechanism behind the well-documented empirical pattern of product cost cross-subsidization in a large-scale simulation experiment. According to this pattern, volume-based costing systems bias the costs of high-volume products upward and of low-volume products downward. Although this pattern has important implications for firms and is discussed extensively in the literature, it has not yet been investigated with computational models. As the first objective of this paper, we replicate the original model by following a pattern-oriented model replication approach. The second objective is to study the mechanism behind the pattern of product cost cross-subsidization. We are unable to reproduce it systematically with the original model. However, the pattern emerges when we extend the model to include a simple cost hierarchy with distinct resource consumption types and volume-based cost drivers. This allows us to specify the likely mechanism behind it. Building on these results, we further extend the model with empirical and theory-based ABC cost hierarchies and assess their effect on product cost cross-subsidization. Our results suggest that production environments underpin more diverse cost hierarchies in practice than previously implemented in the model. Overall, we argue that our extension provides relevant insights into the pattern of product cost cross-subsidization, while our replication and extension strengthen the models' credibility and usability for future research.

AbstractProduct concept generation and evaluation are critical for the success of new product developments (NPD) because managers need to select the most profitable product concepts. However, current approaches can be restricted to single products and do not cover product families' effects. Similarly, they do not necessarily capture all requirements and usually lack extensive cost analyses. Thus, this paper proposes a framework supporting product concept generation and evaluation by providing an accessible conceptualization to overcome the limitations. Using the so-called Extended Axiomatic Design (EAD) supports designers and managers to configure the requirements across product concepts' various domains while concurrently evaluating their economic consequences. The study applies the framework on a simplified case of a bottle manufacturer to conceptualize four product concepts. The case illustrates how the EAD can be used as a virtual testbed to generate and evaluate new product concepts. Finally, designers and managers can make more informed decisions about product concepts by considering their economic and engineering selection criteria to select the most profitable NPD project configuration.

The Bundeswehr Command and Staff College (BCSC) facilitated the Gamification of Strategic Thinking seminar from 11. Nov 2020 - 24. March 2021 with students from the Hamburg University of Technology (TUHH) and Staff Officers from the Bundeswehr Office for Defence Planning. This paper describes the seminar from construction to end, the sophisticated online facilitation, and the results and evaluation. Thereby, it contributes to discussing how to implement commercial of the shelf (COTS) conflict simulations (wargames) to education, particularly for political science and management. The seminar used the COTS board game 'Scythe' as the strategy development and strategy implementation environment. Seminar goals were applying management tools like SWOT-Analysis, Kanban Board, and the OODA-Loop (Observe, Orient, Decide, Act) to strategy development and strategy implementation in a competitive environment characterised by volatility, uncertainty, complexity, and ambiguity (VUCA). Six Teams consisting of five players each competed at the end of the seminar for three days, had to use the decision-making process several times, and faced the consequences of past decisions. Furthermore, four team members had to Red-Team other competitors and learned how to implement this (business) Wargaming technique into the decision-making cycle. Finally, all participants had to develop a strategy, either their own or their adversary's strategy. The seminar was conducted in eight sprints, following the Scrum framework for agile project management in an agile education approach. Students had to practice an agile mindset, followed the scrum events Sprint Planning, Daily Scrums, Sprint Review and Sprint Retrospective, taking care of the Project Backlog, honouring the Scrum Values courage, focus, commitment, respect, and openness. The lead author planned the seminar as a distributed learning experience with an onpremises final. However, due to COVID-19, the TUHH and the BCSC cancelled the on-premises final. As a result, the lead author had to facilitate the complete seminar entirely distributed using various web 2.0 collaboration tools like Slack, Trello, Zoom and, of course, WhatsApp. The seminar was evaluated regarding the Learning Objective-Game Design framework and the Agile Education approach. This paper provides a new perspective on combining agile education, using a Scrum framework as the organisational overlay over the curriculum, and explicit gamification, using a COTS wargame. It is an update to the ECGBL 2020's paper. In comparison to serious games, explicit gamification is supposed to provide the element of fun by design.