Design for Variety: A Methodology for Understanding the Costs of Product Proliferation

Abstract

Abstract This paper further develops the previously introduced concept of Design for Variety (DFV). Our study seeks a tool that enables product managers to estimate the cost of introducing variety into their product line. This will help them to maximize market coverage while maintaining required profit margins. Variety incurs many indirect costs that are not always well understood or are difficult to capture. These costs are often not considered by people making the decision about introducing variety. Our DFV model attempts to capture these indirect costs through the measurement of three indices: commonality, differentiation point, and set-up cost. These indices will allow the decision makers to estimate some of the generally unmeasurable costs of providing variety. We conclude this paper by discussing our validation plans for testing the model in industry.