When varying elements, one must take into account the number of elements and the number of possible repetitions.

For a better understanding, here is an example:

There are four empty fields. The letters A and B are to be placed into these fields in different variations. The possibilities range from A times four, through an arbitrary mix of A and B, to B times four.

You can try it yourself on a sheet of paper - you will see that there are 16 possibilities. There's an easy formula to calculate the number of combinations: The number of elements to the power of the number of the possible repetitions. In this case, it's 2 to the power of 4 = 16.

The deeper meaning behind this exercise is that the letters can be replaced by different shapes, e.g. shapes that correlate with the identity of the company for which you're designing a logo. These shapes can be varied, and this may give you good ideas or suggestions for a logo. Some good, renowned logos have emerged this way.