The Material Composition of Product and New Materials

Document Type

Article

Publication Date

6-1992

Department

College of Business

Abstract

The material composition of product is defined as the quantity of a material used in the production of one unit of a product during a year. This ratio is computed by dividing the quantity of goods produced duting that year, and has shown steady declines over time for many metals. These declining trends could be the result of several interrelated effects: the substitution of other materials, continued improvements in product design, and improvements in manufacturing technology. This paper demonstrates that these effects can be classified into two categories. First, existing products and manufacturing processes can be improved and made more material efficient. This is a short-run adjustment because no major changes are made to capital equipment. This adjustment process can be modelled by the use of learning curves. The second category of changes that allow adjustments in materials manufacturing plant redesign. This requires major capital investment to re-tool the manufacturing process and is therefore a long-run adjustment that can be characterized by models of the diffusion of new technology. These two aspects (short-run learning curves and lon-run trends in the diffusion of technology) are demonstrated for the case of the materials used in manufacturing beer containers in the USA.

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© 1992

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