Article
Performance Implications of Product Life Cycle Extension: the Case of the A‐10 Aircraft
Journal of Business Logistics
(2008)
Abstract
Firms are faced with challenging decisions when capital equipment reaches the end of its designed service life. This research examines the risks of deciding to extend the retirement date of a capital asset in terms of performance and cost and offers recommended actions to mitigate this risk. Through study of the United States Air Force's A‐10 aircraft, the authors analyze one example of decreased performance and increased costs experienced when supply chain implications are not explicitly considered when making service life extension decisions. In this case, the Air Force's efforts to save money through life extension of existing aircraft actually exceeded the seemingly enormous initial investment of acquiring new aircraft. Arguments are presented suggesting the Air Force, in particular, may reap benefits from forming supply chain relationships and creating continuity plans to manage problems such as parts shortages and cost increases when extending the use of capital assets beyond its intended service life.
Keywords
- Capital equipment acquisition,
- Life cycle management,
- Supplier relationships,
- Transaction cost economics
Disciplines
Publication Date
September 1, 2008
DOI
10.1002/j.2158-1592.2008.tb00092.x
Citation Information
Shawn R. Jones and George A. Zsidisin. "Performance Implications of Product Life Cycle Extension: the Case of the A‐10 Aircraft" Journal of Business Logistics Vol. 29 Iss. 2 (2008) p. 189 - 214 Available at: http://works.bepress.com/george-zsidisin/15/