Abstract: A system and method for collaborative product configuration optimization model. A plurality of product families and corresponding one or more product sub-families, a plurality of options families associated with each of the sub-product families is obtained. The option family includes one or more option variants. A first product family from the plurality of product families is selected and the one or more option variants of the first product family is associated with a reference value and is selected based on availability of the one or more option variants. A feasible configuration set for the selected first product family is generated by iteratively performing, for each of a unit of demand, a multi-constrained longest path search traversing across the plurality of option families in an non-increasing order of an average of the reference value of the plurality of the option families and a list of configurations is optimized based on the generated feasible configuration.