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A pricing model for Internet of Things-based fleet services to support equipment sales

Marttonen-Arola, Salla, Kärri, Timo, Sinkkonen, Tiina and Pirttilä, Miia (2019) A pricing model for Internet of Things-based fleet services to support equipment sales. Journal of the Operational Research Society. pp. 1-11. ISSN 1476-9360

Item Type: Article

Abstract

Servitisation and rapid technological development have made data-based services a feasible way for many manufacturing companies to increase their cash flow and support their core products. In this article, an analytical model is presented for studying the development costs and pricing of new Internet of Things-based services for especially populations, or fleets, of industrial production equipment and machines. The model suggests the optimal price of a fleet service as a function of the life cycle of the service, the required rate of return, the size of the fleet, and the extent of economies of scale in fleet research and development. This article contributes to the research on servitisation of manufacturing, and sheds light on the different natures of service and equipment sales. Also a numerical study is presented to bring forward the managerial implications of the model.

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Additional Information: ** From Crossref via Jisc Publications Router.
Uncontrolled Keywords: Marketing, Management Science and Operations Research, Strategy and Management, Management Information Systems
SWORD Depositor: Publication Router
Depositing User: Publication Router

Identifiers

Item ID: 10319
Identification Number: https://doi.org/10.1080/01605682.2018.1487815
ISSN: 1476-9360
URI: http://sure.sunderland.ac.uk/id/eprint/10319
Official URL: https://www.tandfonline.com/doi/abs/10.1080/016056...

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Catalogue record

Date Deposited: 10 Mar 2020 10:44
Last Modified: 10 Mar 2020 10:44

Contributors

Author: Salla Marttonen-Arola
Author: Timo Kärri
Author: Tiina Sinkkonen
Author: Miia Pirttilä

University Divisions

Faculty of Technology > School of Engineering

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