THE COST OF INTERNAL VARIETY: A NON-LINEAR OPTIMIZATION MODEL
Manufacturing oriented design methodologies (e.g. Design for Manufacturing and Assembly, Design to Cost) enable engineers to create product designs which can be manufactured at low cost and with better quality. But applying such as theories only to a single product is not efficient since, the product families are usually produced. In this paper the economic aspects of internal variety in product design and manufacturing are analyzed and non-linear decision model for designing the cost effective product family is presented. The proposed calculation method enables product managers to estimate and reduce the cost of introducing differentiation into their product family by optimizing the internal product variety.