(Product Liability Universal Software)
A financial exposure calculator was delivered, namely PLUS (Product Liability Universal Software), which can help companies righsizing their test process.
We intentionally constructed the tool and the data contained on the backend to be intuitive, user-friendly, and customizable. Using an Excel platform means that Omnicell and any other users can update or change the numbers that go into the calculation with very little effort. It is our hope that they will play with and adjust values and even restructure the tool so that it is useful to them.
The calculator would asks the user to input whether they prefer to perform the testing in-house or outsource it. In the case that they prefer to test themselves, they also have the option of renting or buying the equipment. Once the user selects one of these options, a corresponding cost is populated from the “database” behind the scenes.
The customer is also asked to input an estimate for the potential liability cost if the failure mode in question were to occur for their product. The cost that the user inputs here will be dependent on the environment in which the product might fail, potential lawsuits, recall costs, and warranty costs.
Our tool then performs a Monte Carlo analysis behind the scenes, where Test Costs, Financial Exposure, and Redesign Costs are all represented as normal distributions.
These distributions from database are then subject to the transfer functions that we developed below
Then a user-friendly output would show the benefit of investing in a particular test in terms of reduction in financial exposure is generated, as shown below.
Use Case Example:
For a given test type, should the company buy or outsource?
Case #1: Buying the Testing Equipment
The company select to buy testing equipment, press the “START PROCESS” button,
and the graphical output shows the comparison between average financial cost with testing for buying testing equipment and average financial cost without testing.
Case #2: Outsourcing the Testing Equipment
The company select to outsourcing testing equipment, press the “START PROCESS” button,
and the graphical output shows the comparison between average financial cost with testing for outsourcing testing equipment and average financial cost without testing.
Key Suggestions from the Tool
From above example, the tool gives the following 2 suggestions:
The final financial exposure cost with testing is much lower than the financial
exposure cost without testing, here it is suggested that the company should conduct testing for their product.
The final financial exposure testing cost of outsourcing is much lower than the testing
cost of buying, here it is suggested that the company should outsource testing equipment instead of buying.