The platform configuration for product family production

The focus of manufacturing has been shifting from mass production to mass customization and producers are seeking ways to reduce production costs, still offering a competitive basket of products. One approach for implementing mass customization is to develop or produce products based on platform architecture. We propose a platform based approach for the production of a product family under demand uncertainty. Using this approach, every product variant in the family may either be assembled directly from its components, or from any platform whose component set resembles those required by the product. The methodology seeks to minimize the overall production costs of the products, which include the costs of production, and holding cost of unused platform inventory and shortage cost of lost demands of products, while considering the stochastic demand of each product type. The problem is formulated as a two stage stochastic programming model with recourse. The platform formation problem for the economic production of a product family with stochastic demand of each of the product is modeled as a general optimization problem.