Parallel and Sequential Testing of Design Alternatives

Christoph Loch (), Christian Terwiesch () and Stefan Thomke ()
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Christian Terwiesch: The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104
Stefan Thomke: Harvard Business School, Soldiers Field, Boston, Massachusetts 02163

Management Science, 2001, vol. 47, issue 5, 663-678

Abstract: An important managerial problem in product design in the extent to which testing activities are carried out in parallel or in series. Parallel testing has the advantage of proceeding more rapidly than serial testing but does not take advantage of the potential for learning between tests, thus resulting in a larger number of tests. We model this trade-off in the form of a dynamic program and derive the optimal testing strategy (or mix of parallel and serial testing) that minimizes both the total cost and time of testing. We derive the optimal testing strategy as a function of testing cost, prior knowledge, and testing lead time. Using information theory to measure the test efficiency, we further show that in the case of imperfect testing (due to noise or simulated test conditions), the attractiveness of parallel strategies decreases. Finally, we analyze the relationship between testing strategies and the structure of design hierarchy. We show that a key benefit of modular product architecture lies in the reduction of testing cost.

Keywords: Testing; Prototyping; Learning; Optimal Search; Modularity (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (50)

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