Incorporating customer indifference into the design of flexible options for customized products

This paper introduces flexible option to address the challenge of customer indifference within a product customization context. A flexible option is a predefined set of alternatives for configuring a customizable attribute, and allows a manufacturer to assign one out of the set to fulfil orders. It could be offered with price discount as an incentive to influence demand in a favourable manner. Therefore, alternative set and discount are two most essential parameters in designing option features. In this paper, customer indifference is explicitly characterized and incorporated into a holistic modelling framework to valuate flexible options and optimize the design. (C) 2015 CIRP.