Product design with consideration of contingent costs: A design function and variation risk management perspective

This paper proposes an optimization model simultaneously deals with the tolerance allocation and visible manufacturing and contingent cost to satisfy the product design functions. The constrained optimization of product variation allocation (identifying of self-make process and purchasing quality/specification level) minimize the main costs, i.e. self-make manufacturing cost and purchasing cost, and contingent costs, such as rework, replace, reverse logistics, and damage on reputation under above conditions.