Date on Master's Thesis/Doctoral Dissertation


Document Type

Master's Thesis

Degree Name



Industrial Engineering

Committee Chair

Heragu, Sunderesh S.


Industrial efficiency; Industrial management; New products--Economic aspects


In today's market customers are increasingly demanding a greater number of options in the products they purchase. Offering products in greater variety helps industries cater to a wider range of customers. However, at the same time, this product proliferation is creating new problems for manufacturers. The effect of an increase in the variants of a product on the supply chain and production operations is largely unknown. Understanding this affect along with the benefits of increased product variety on the company's market share would greatly assist industries in making a return on investment analysis. In this thesis, we develop a simulation model of the production operations of a typical manufacturing company, and study the effect of changing product variety on these operations. This is done by determining the variation in the key performance indicators (KPIs) such as product cycle time, work-in-process (WIP) and resource utilization when changes are made to the variety of the products manufactured. This thesis consists of three simulation models representing three different scenarios in a manufacturing environment. The models built using the simulation software-ARENA, compare the three production strategies employed to cater to the current variety and when new variety is added to the current mix. The first model represents the current manufacturing design. The model parameters and outputs were compared with the real manufacturing setting to make sure it is consistent. The second model represents a scenario where changes and additions are made to the initial design, to meet the production requirements of the new product mix. No changes are made to accommodate the takt time requirements of the customer. In the third simulation model design changes are made so as to meet takt time requirements and thus satisfy the required throughput rules. The three models are then compared to see which one performs the best in terms of meeting customer requirements and KPIs. Based on the results we believe that changing product variety can have a significant impact on an industry's manufacturing operations and significant investments might be required to mitigate these effects.