(245d) Teaching Product Design Using Microeconomics

At the University of Oklahoma, we teach product design in the capstone class. To do that, we identify different interesting products. Some examples are: lotions, insect repellents, wine, carpet deodorizers, oxygen generators, artificial nose, medical diagnostic devices, vaccines, beer, etc.

Many of these project results were presented in AIChE meetings as oral presentations. They use a methodology rooted in connecting product properties (compositions, structure, functionalities) with consumer preferences and production costs. In addition, we use pricing models to assess what is the demand price (hedonic) relationship.

Students learn to build models in which product properties are manipulated to maximize consumer preference or to maximize profit. Both give different results.

WE also touch on competition, uncertainty and financial risk considerations.

Illustrations will be made.