The reserch for flexible product family manufacturing based on real options

This paper studies the product family on the basis of product platform and producing the product family for large-scale production after the modular. In order to meet customer diverse demand and respond to the market's growth, this article build model of the product portfolio based on the flexible product platform, using binary real option pricing method and 0-1 mathematical programming. The goal of this model is to find the best production strategy for product portfolio, which means the largest value of the options. Finally, give a case and find the solution of the optimal production strategy for product portfolio. © 2014, Academic Association for Manufacturing Engineering. All rights reserved.