 What is the right production strategy for horizontally differentiated product: Standardization or mass customization?Xiao-Feng Shao International Journal of Production Economics, 2020, vol. 223, issue C Abstract: In response to growing individualization of demand in the increasingly competitive market, more and more companies are considering mass customization (MC) as a new production strategy to enhance competitive advantage. This study develops an analytical model to investigate production strategy in a market where customers have heterogeneous preferences for product types. We analyze the assortment and pricing decisions under two different production strategies: standardization and mass customization. For the mass customization model, we address two kinds of production systems: a low level mass customization system (LMC) offering a limited product types and a high level mass customization system (HMC) with the capability of offering all product types. Our results reveal that HMC may not necessarily improve payoffs. With small disutility of type mismatch, LMC is preferred to HMC. We develop two effective decision policies based on operating cost and product value to identify an optimal production strategy. Keywords: Production strategy; Mass customization; Standardization; Type mismatch; Product value (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:223:y:2020:i:c:s0925527319303548 DOI: 10.1016/j.ijpe.2019.107527 Access Statistics for this article International Journal of Production Economics is currently edited by Stefan Minner More articles in International Journal of Production Economics from Elsevier |
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