3D Printing-as-a-Service: An Economic Analysis of Pricing and Cocreation

Abstract

Three-dimensional (3D) printing technology has opened up possibilities for product design collaborations between device providers and customers. To enable an environment of cocreation, device providers are now renting 3D printers via the 3D-as-a-Service (3DaaS) model. Although prior research has examined pricing and quality issues in the traditional manufacturing setup, these studies have not analyzed such decisions in the 3D printing supply chain setting, where end users possess the ability to customize product designs. Therefore, several important questions remain unanswered from the perspective of the 3D printing device provider. For example, what is the appropriate pricing model for providing 3DaaS? How do factors such as the extent of design customization and the complexity influence the pricing strategy of the 3DaaS firm? Our analysis shows that if the customers’ impact on the product quality is relatively high or low, the pay-per-build pricing model generates a higher profit than the fixed-fee pricing model. Interestingly, we also find that if customers frequently print highly intricate product designs, the firm might choose the pay-per-build pricing model, only if the likelihood of design failure for these complex structures is low. Otherwise, the firm might opt for the fixed-fee pricing model.