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Since the era of Henry Ford’s legendary Model T, all attempts to sell a standard world car have proven to be unsuccessful. Paying tribute to customers individualism and heterogeneous preferences, car producers have substantially increased their product variety in the last twenty years. Technology advances have made manufacturing tools and processes more flexible to allow for a quick response to changing demand. Through early integration of the three C’s Computer Aided Design (CAD), Engineering (CAE) and Manufacturing (CAM), the development time for a new car model has been cut down to under four years. Dense dealer networks and advanced logistics have shortened customer order lead time to approximately two weeks. Therefore, a car producer can afford to vary the standard equipment of one car model depending on the socio-cultural, geographic or climatic needs of different target markets. Moreover, the manufacturer has to meet country specific legal and environmental requirements, such as emission, noise or lighting standards. The customization of a car model is achieved by additionally offering a set of customer-determined options, so-called free-flow options, such as air-conditioning, sun-roof, metallic exterior colors, leather trim, alloy wheels and so forth, in line with entire equipment packages. The extent of free-flow option and package supply should depend on the target market and its customers budget constraints.
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