Analysis of Mass Customization

This chapter analyzes the relationships between product variety and mass customization business models. The goal of mass customization is to increase customer’s value of a product by adding a range of product variations that fit specific customer’s taste and needs while maintaining low prices. Any business model for mass customization must offer solutions to two basic issues: variety management; and rapid response time. The chapter discusses four business strategies for mass customization. They yield different levels of the upper boundary of product variety. The two major inputs for manufacturing plants are product volume and product mix (i.e., variety) that have to be produced on a given manufacturing system at any given time. The chapter offers a simple mathematical analysis of the relationships between cost and the number of product variations that are needed to expand a company’s sales. Controlled Vocabulary Terms business model; Business strategy; mass customization