In Pursuit of Product Modularity: Impediments and Stimulants

This article develops a framework, including a 2 × 2 matrix, to help guide firms in deciding when to design their products to be integral, modular-in-production, modular-in-use with a focus on selling “cartridges,” or modular-in-use with a focus on promoting numerous apps. Three key factors are as follows: the level of user heterogeneity, the disparity across components in frequency of updating, and the modularity/integrality penalty.

Value of Reliability for Road Freight Transportation

This paper presents the findings of a study recently conducted in Florida to quantify freight users’ willingness to pay (WTP) for the improvement of transportation-related attributes, particularly reliability. A stated preference survey was developed and administered between January and May 2016. The survey collected responses from 150 shippers, carriers, and forwarders. Econometric models, including mixed and multinomial logit models, were developed to estimate the users’ WTP and to investigate the presence of user heterogeneity. The value of time and the value of reliability were estimated separately for the various user groups. The results indicated that carriers showed the lowest WTP when their WTP was compared with that of other freight users. Shippers without transportation—that is, shippers who contracted out their shipping— exhibited more interest in reducing travel time savings, whereas shippers with transportation showed more sensitivity to reliability. Preference heterogeneity was also explored by commodity group and product type. The results confirmed the findings from past studies and showed significant differences in WTP values when the sources of heterogeneity were considered. This paper contributes to the literature by providing empirical evidence of the quantification of the value of reliability in road freight transportation and the impacts of user heterogeneity. The study results will help advance understanding of the impacts of the performance of transportation systems on the freight industry.