Optimal product service system configuration considering pairing utility and uncertain customer behavior

Yilun Zhang, Jianghang Chen and Zhibin Jiang ()
Additional contact information
Yilun Zhang: Shanghai Jiao Tong University
Jianghang Chen: Xi’an Jiaotong-Liverpool University
Zhibin Jiang: Shanghai Jiao Tong University

Flexible Services and Manufacturing Journal, 2023, vol. 35, issue 2, No 3, 343-375

Abstract: Abstract In the context of manufacturing servitization, manufacturing enterprises offer not only products but also associated services according to customer demands, which is the so-called Product Service System (PSS). In PSS configuration, enterprises need to jointly determine the selected modules with corresponding prices to improve sales profit and customer satisfaction. Better customer satisfaction can be achieved by lower price and larger module utility. Apart from most previous research, we consider not only the single module utility but also the pairing utility, which measures the additional value jointly created by a product module and a service module to illustrate the synergy effect of “product + service”. Furthermore, we take the uncertainty of service utility and customer behavior into account. The former is due to the heterogeneity and intangibility nature of service, and the latter is described by price sensitivity that varies among different customers. To realize the above two contributions, we first establish a multi-objective stochastic programming model to maximize expected customer satisfaction as well as sales profit. For a better trade-off between solution quality and computation efficiency, we develop an improved algorithm based on epsilon-constraint and sample average approximation, including the feasibility examination and accelerating strategy. Finally, numerical experiments are conducted to demonstrate our approach and validate the contributions.

Keywords: Product and service configuration; Pricing; Pairing utility; Uncertain behavior; Multi-objective stochastic optimization (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10696-021-09424-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:flsman:v:35:y:2023:i:2:d:10.1007_s10696-021-09424-9

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10696

DOI: 10.1007/s10696-021-09424-9

Access Statistics for this article

Flexible Services and Manufacturing Journal is currently edited by Hans Günther

More articles in Flexible Services and Manufacturing Journal from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().