Development of a Production Cost Estimation Framework for Product Family Design

Abstract The main task of a product family designer is to decide the right variables and/or components to share among products to maintain economies of scale with minimum sacrifice in the performance of each product in the family. The decisions are usually based on several criteria but production cost is of primary concern. In this paper, we propose to develop a production cost estimation framework for a product family based on Activity-Based Costing (ABC) and a production information structure that includes the relationships of components within a product and its corresponding product family. The production costs are estimated by allocating a set of the production activities that are required to produce the product family to the production information structure.