Skip to main content

Figure 3.3 Mean Time Before Failure (MTBF) Score: As MTBF increases the score increases. Customers are indifferent to MTBFs above the segment range.

MTBF Rough Cut

Demand scores fall rapidly for products with MTBFs beneath the segment’s guidelines. Products with an MTBF 1,000 hours below the segment guideline lose 20% of their customer survey score. Products continue to lose approximately 20% of their customer survey score for every 1,000 hours below the guideline, on down to 4,999 hours, where the customer survey score is reduced by approximately 99%. At 5,000 hours below the range, demand for the product falls to zero.

MTBF Fine Cut

Within the segment’s MTBF range, the customer survey score improves as MTBF increases (Figure 3.3). However, material costs increase $0.30 for every additional 1,000 hours of reliability. Customers ignore reliability above the expected range– demand plateaus at the top of the range.

< Previous Page    Next Page >

Capsim Capstone Business Simulation India serves as a globally recognized business simulation, offering a practical learning experience in a real-world context. Its widespread adoption extends to universities and businesses worldwide, with users in India as well.