Abstract
This study develops a method to capture the broadest customer preference in a product line while minimizing the life-cycle cost of providing variety. The paper begins with an overview of product variety and its importance in overhead costs: supply chain, equipment and tooling, service, and recycling. After defining the product structure graph as a representation of variety, the paper introduces an approximate measure for the customer importance and life-cycle cost of product variety The cost measure utilizes the concept of late point identification which urges standardization early in the manufacturing process and differentiation at the end of the process. The variety importance-cost map allows engineers to identify cost drivers in the design of the product or the manufacturing system and seek improvements. The refrigerator door example illustrates the concept. On-going work seeks to validate and enhance the method with several companies from different industries.
