Quantifying the Costs and Benefits of Product Variety on KeyPerformance Measures

摘要

In today’s market, customers constantly demand greater product variety. Producing goods in greater variety allowscompanies to cater to a wider range of customers. However, this increase in product mix creates production andscheduling difficulties for the company. In this paper, we develop simulation models that quantify the costs ofchanging product mix for a tire and wheel assembly company. This is done by determining the variation in the keyperformance indicators (KPIs) such as product cycle time, work-in-process (WIP) and resource utilization whenchanges are made to the product variety manufactured.