Michael Riesener

Risk aversion vs. individualism: what drives risk taking in household finance?

Despite a considerable premium on equity with respect to risk-free assets, many households do not own stocks. We ask why the prevalence of stockholding is so limited. We focus on individuals’ attitudes toward risk and identify relevant factors that affect the willingness to take financial risks. Our empirical evidence contradicts standard portfolio theory, as it does not indicate a significant relationship between risk aversion and financial risk taking. However, our analysis supports the behavioral view that psychological factors rooted in national culture affect portfolio choice. Individualism, which is linked to overconfidence and overoptimism, has a significantly positive effect on financial risk taking. In microdata from Germany and Singapore, as well as in cross-country data, we find evidence consistent with low levels of individualism being an important factor in explaining the limited participation puzzle.

Structuring highly iterative product development projects by Using HIP-indicators

Nowadays, manufacturing companies are faced with the challenge of meeting heterogeneous customer requirements in short product life cycles with a variety of product functions. So far, some of the functional requirements remain unknown until late stages of the product development. This is mainly caused by an increasing market dynamic in combination with the continuously changing customer expectations. A way to handle these uncertainties is the highly iterative product development (HIP) approach. By structuring the development project as a highly iterative process, this method provides customer oriented and marketable products. Therefore, it is necessary to structure each development into empiric-adaptive or deterministic-normative scopes. Recently first approaches for the combination of deterministic-normative methods like Stage-Gate and empirical-adaptive methods like SCRUM on a project management basis have emerged. Accordingly, this paper aims at the presentation of a methodology which enables the classification of each development scope by using a HIP-Indicator. This indicator reveals optimum suitability of every development scope for the realization with either empiric-adaptive or deterministic-normative approaches.

Concept for development project management by aid of predictive analytics

Manufacturing companies in high wage countries strive towards shortened development and innovation cycles at decreased costs in order to strengthen their competitive advantage. These goals can be achieved by efficient development projects. However, approaches aiming at designing efficient development processes such as the value stream analysis only analyze development projects retrospectively as well as periodically and therefore do not continuously improve the efficiency of the respective projects themselves. Therefore, a concept is needed to anticipate deviations from the target process and thus inefficiencies within development projects by aid of predictive analytics. To derive a predictive analytics model, neural networks are applied to identify the impact of deviation indicators on the efficiency dimensions time, costs and quality of an activity. Upon reversion, it is possible to monitor the deviation indicators and use the respective indicator values as input for the neural networks. Based on the identified impact of the indicator on the efficiency dimensions, the neural network is able to predict the final values of an activity in terms of time, cost and quality. By comparing the predicted values with the defined target values, the deviation can be determined and preventive measures can be implemented to eliminate inefficiencies.

Preventive controlling of product development projects by aid of predictive analytics - identifying hot spots within the deviation probability map

This paper presents a concept to anticipate deviations from the target process and thus inefficiencies within development projects by aid of predictive analytics. It is stated that predictive analytics approaches can be adapted to predict deviations in development projects, comparable to the anticipation of crimes. Deviations in terms of time, costs and quality are seen as a result of waste and therefore a dimension for inefficiencies. In this context the deviation probability map is introduced as a part model of the superordinate methodology allowing the intuitive identification of deviation hot spots and enhancing preventive controlling of development projects.

Smart Product Variety

Kurzfassung Produzierende Unternehmen stehen zunehmend vor der Herausforderung, der marktseitigen Forderung nach immer kundenindividuelleren Produktvarianten gerecht zu werden. Indirekte Mehrkosten für die Einführung neuer Varianten werden jedoch oft nicht verursachungsgerecht verrechnet und führen zur Quersubventionierung „exotischer“ Varianten. Am Werkzeugmaschinenlabor WZL der RWTH Aachen wurde daher eine Methodik entwickelt, welche die Minimierung und die verursachungsgerechte Ermittlung indirekter Kosten für neue Produktvarianten vereint. Diese ganzheitliche Methodik ermöglicht eine verbesserte Zusammenarbeit zwischen Vertrieb, Produktmanagement und Entwicklung bei der Preis- und Kostengestaltung. In einer frühen Phase der Auftragsabwicklung können die tatsächlich anfallenden indirekten Kosten einer neuen Produktvariante mit deutlich geringerem Aufwand als bisher bestimmt werden. Kernelement der Methodik ist der Rückschluss von der Produktähnlichkeit auf die anfallenden indirekten Kosten.

Approach To Evaluate Complexity In New Product Development Projects

Manufacturing companies respond to the customers’ demand for more individualized products and enhanced functionality by increasing product variety and integrating multiple technologies in their products. Consequently, complexity in new product development (NPD) projects increases as more and more interdependencies and framework conditions have to be considered. A systematic evaluation of the parameters that drive the complexity of an NPD project prior to project kick-off would enable project management to identify critical issues up-front and adjust the project setup accordingly. There are several recent studies that analyze project complexity and identify complexity drivers. However, there is still a lack of a holistic approach that helps project managers to analyze the complexity of NPD projects and at the same time derive specific measures in order to adjust project complexity. This paper presents an approach for complexity evaluation of NPD projects during project preparation. The approach is based on complexity drivers that have been determined through literature research, classified according to their impact on the complexity of NPD projects and influenceability by project management as well as on the analysis in terms of their interdependencies. Through individual assessment of the complexity drivers and through portfolio analysis, the focal points of complexity in an NPD project can be identified. Measures to level complexity according to the company’s positioning can be derived from studying the portfolio of complexity drivers taking into account their impact on first order interactions between complexity drivers.

Determining the Application Suitability of Agile Methods for Highly Interdependent Products

Meeting heterogeneous customer requirements in short product life cycles with a variety of product functions is a significant challenge for manufacturing companies nowadays. So far, some of the requirements remain unknown until late stages of the product development project, which makes it more difficult to generate the right product features. This is mainly caused by volatilely changing customer expectations. One promising approach to address these challenges is the application of agile methods from the software industry to the development of physical products. Nevertheless, most companies are not able to adapt this approach and therefore adhere to plan-driven development methods. This is due to a lack of profound knowledge in transferring agile methods to the development of highly interdependent physical products. This paper aims at the presentation of a methodology, which determines the application suitability of agile methods for the development of highly interdependent products. Therefore, the type and degree of interdependencies between individual product scopes are analyzed. Based on this investigation and the application of Agile Indicators, an evaluation of development scopes regarding their suitability for agile development is derived. The developed methodology can be used to ensure the right degree of agility in physical product development. The applicability of the proposed methodology is shown with the practical case of a small manufacturer of electric cars.

Evaluation of the Effects of Activity Deviations onto a Development Project's Target Dimensions

Manufacturing companies in high wage countries strive towards shortened development and innovation cycles at decreased costs in order to strengthen their competitive position. These goals can be achieved by efficient and lean development projects. Approaches aiming at designing efficient development processes such as the value stream analysis only analyze development projects retrospectively as well as periodically and therefore do not continuously improve the efficiency of the respective projects themselves. Furthermore, existing approaches for project management mainly evaluate the target dimensions time, cost and quality on a superior project level although steering measures have to be implemented on an activity level. Therefore, a concept is needed allowing the determination of an activitys contribution to the time, cost and quality goals of a project. Based on the determined contribution it is possible to assess the effects of a deviation on activity level onto the project goals comparable to a sensitivity analysis allowing a focused implementation of measures. The methodology introduces an approach to partition overall project time, cost and quality goals among the different project activities. In a second step it is derived, how deviations within the target dimensions on activity level can be rated in terms of their effect onto the project comparable. Depending on the effect of the activity-deviation onto the project goals, the implementation of measures is decided. To support this decision, a logic is derived to rate the respective impact of a deviation.

Cost-Orientated Product Variant Evaluation Using Similarity Analysis

Engineer-to-order-companies in the field of mechanical engineering are particularly facing the challenge of providing customized products at competitive prices while the market is increasingly fragmented into small niches. Striving to fulfill this demand, companies underestimate the negative financial effect of a higher product variety. Therefore, complexity costs for new product variants with small volumes are often only roughly estimated. This leaves a severe risk for crosssubsidization of exotic variants and a loss in the companys competitive market position. Previous research does not provide a holistic approach that considers the integration of complexity costs related to a new variant and the existing variants in the offer process. This paper introduces a methodology facing these challenges. Adjustments of product configurations during the configuration process are analyzed and taken into account in order to increase the transparency during this work-flow. Complexity costs of new customer specific product variants can be determined at an early stage of the offer process. By using similarity analysis, they are clustered and distributed to the causative department. Customers can thus be managed through the offer process and the pricing of the product can be optimized as the complexity costs are considered as well.

Agile-waterfall hybrid product development in the manufacturing industry — Introducing guidelines for implementation of parallel use of the two models

Agile development methods received a lot of attention throughout research and industry in recent years. Hybrid agile-waterfall models become increasingly prominent, mostly building one process model by combining elements of the two systems. We propose that there is reason to use the two of them parallel within the same product development project. Based on this assumption we present potential challenges faced in designing and managing such a project. We introduce a framework to categorize these, and suggest matching approaches to overcome them aimed for use by practitioners in the field.