Design of Common Components Considering Implications of Inventory Costs and Forecasting

Abstract

This paper is related to component (or module) design decisions. It deals with instances in which non-substitutable components of a similar nature are used in different product lines. The question addressed is whether one should invest in efforts to redesign so that several similar (but not the same) components may be replaced by a common one. Reduction of the standard error of forecast and its implications to inventory systems are utilized toward decisions for commonality. Clustering algorithms are presented.