An efficient solution method to design the cost-minimizing platform portfolio

Maud Van den Broeke, Robert Boute, Brecht Cardoen and Behzad Samii

European Journal of Operational Research, 2017, vol. 259, issue 1, 236-250

Abstract: To offer a wide product variety to customers in a cost-efficient way, companies have introduced platforms, defined as a base from which different products can be derived. We consider a product portfolio, consisting of a set of end products, where each product has a set of attributes (features), which can have different levels requested by the customers. We present a model to support companies in designing the cost-minimizing platform portfolio, consisting of a set of platforms, from which these products can be derived. Each platform has a set of technical design parameters, which can have different levels. The required parameter levels in the platform’s design depend on the attribute needs of the products derived from the platform. Our model gives guidance to what extent the platforms should be under-designed, over-designed or the same with regard to the products (and its attribute levels) derived from them. The model quantifies the impact of these platform portfolio decisions on the relevant operational costs. Given the complexity of this problem for large-scale instances, we develop two fathoming rules to improve computational efficiency. These fathoming rules can be used in different solution algorithms. We illustrate their applicability in a branch-and-bound, simulated annealing and genetic algorithm. We demonstrate the value of our model and solution method with a practical case of a high-tech screen manufacturing company, that wants to design the cost-minimizing platform portfolio from which their product portfolio can be derived.

Keywords: OR in Research & Development; Platform design; Metaheuristic; Fathoming rules (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221716308165
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:259:y:2017:i:1:p:236-250

DOI: 10.1016/j.ejor.2016.10.003

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().