Technical Brief

An Approach to Evaluate the Profitability of Component Commonality

[+] Author and Article Information
Shun Takai

Department of Technology,
Northern Illinois University,
DeKalb, IL 60115
e-mail: stakai@niu.edu

Sankar Sengupta

Department of Industrial and Systems Engineering,
Oakland University,
Rochester, MI 48309
e-mail: sengupta@oakland.edu

1Corresponding author.

Contributed by the Design Automation Committee of ASME for publication in the JOURNAL OF MECHANICAL DESIGN. Manuscript received May 25, 2016; final manuscript received April 5, 2017; published online May 18, 2017. Assoc. Editor: Gul E. Okudan Kremer.

J. Mech. Des 139(7), 074501 (May 18, 2017) (6 pages) Paper No: MD-16-1388; doi: 10.1115/1.4036644 History: Received May 25, 2016; Revised April 05, 2017

Commonality or the use of same components (parts, assemblies, or subsystems) among multiple products can reduce component inventory and simplify processes and logistics while accommodating variations in product demand. Excessive commonality, however, causes some products to use high-performance components and increase product cost. This paper presents an approach for evaluating profitability of component commonality by integrating commonality and supply chain decisions. The proposed approach is demonstrated using commonality of electric-bicycle motors as an illustrative example. This paper presents a sensitivity analysis of the optimum commonality with respect to motor cost, demand variability, inventory-tracking cost, and inventory-ordering cost.

Copyright © 2017 by ASME
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Grahic Jump Location
Fig. 1

Commonality-related decisions, parameters, and uncertainties

Grahic Jump Location
Fig. 2

Optimization results

Grahic Jump Location
Fig. 3

Sensitivity analysis




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