| Article ID: | iaor201113132 |
| Volume: | 20 |
| Issue: | 6 |
| Start Page Number: | 889 |
| End Page Number: | 904 |
| Publication Date: | Nov 2011 |
| Journal: | Production and Operations Management |
| Authors: | Kumar Subodha, Ji Yonghua, Mookerjee Vijay S, Sethi Suresh P, Yeh Denny |
| Keywords: | management, production, optimization, simulation, simulation: applications |
We develop an optimal control model to maximize the net value provided by a software system over its useful life. The model determines the initial number of features in the system, the level of dynamic enhancement effort, and the lifetime of the system. The various factors affecting these optimal choices are systems characteristics (e.g., complexity, age, quality), user learning, and process maturity. We also consider that there is a time lag between the addition of a feature and the realization of its benefit to users. The basic model is extended to consider the decision of replacing the existing system by a new one.