Facing a competitive environment, companies tend to increasingly rely on the high-variety approaches. Among them, Mass Customization demonstrates several promising excellences. The actual adoption of Mass Customization by the industries, however, has not been seen on a large scale. Though sounds simple and alluring, Mass Customization poses great operation challenges and uncertain profitability with comparison to the traditional production system....[ Read more ]

Facing a competitive environment, companies tend to increasingly rely on the high-variety approaches. Among them, Mass Customization demonstrates several promising excellences. The actual adoption of Mass Customization by the industries, however, has not been seen on a large scale. Though sounds simple and alluring, Mass Customization poses great operation challenges and uncertain profitability with comparison to the traditional production system.

Fundamental questions for practitioners in Mass Customization are which attributes should be customized and to what extent those attributes should be customized. However, a couple of related problems, such as product platform investment and product pricing etc, need to be considered to solve the problem in a cohesive way. Therefore, this thesis proposes an integrated model to determine the product choices for Mass Customization with the objective to maximize the expected profit for manufacturers. Some fundamental issues are discussed in order to build the model. A metric to measure the degree of customization is constructed from customer preference and product design perspectives. Value proposition for manufacturers in Mass Customization is examined with identification of benefit and cost drivers. As integral parts in the model, the disutilities of decision complexity for customers resulting from increased customization degree and lengthened delivery time, as well as pricing constraints for vertically differentiated attributes are considered. This framework enables practitioners to evaluate the profitability for a Mass Customization strategy so as to determine the optimal set of product choices.

Finally, an industrial case, Customized Apartment, is presented to demonstrate how this model can be adapted to a specific business context.