Assessing Product Architecture Costing: Product Life Cycles, Allocation Rules, and Cost Models

Abstract

Product families and product platforms have been suggested as design strategies to serve heterogeneous markets via mass customization. Numerous, individual cost advantages of these strategies have been identified for various life cycle processes such as product design, manufacturing, or inventory. However, these advantages do not always occur simultaneously, and sometimes even counteract each other. To develop a better understanding of these phenomena, this paper investigates the cost implications of the underlying design decision: the product architecture choice. The investigation includes factors such as product life cycle phases, allocation rules, and cost models, all of which impact the cost analysis results. Based on this investigation, directions for future research on product architecture costing are provided.