Tooling choices and product performance

One of the dilemmas that manufacturers face involves the tradeoff between t he cost of maintaining a variety of production processes, and the cost of n ot having the ideal process for every product that they produce. This issue is continuing to become more of a problem as manufacturers are forced by m arket conditions to offer a wider selection of products. We study an instan ce of this problem in the manufacture of sheet metal parts. We model the pr oblem of selecting and/or designing tools to punch holes in these parts. Th e cost of not having an "ideal process" is the cost of not having a tool th at precisely matches a hole's design diameter. We consider both general "pr ocess deviation" costs as well as the Taguchi loss function. Solution proce dures are provided for several versions of the problem.