Optimal Pricing of Mass Customized Products for Logistics Outsourcing

Recently, with increasingly fierce market competition, manufacturers have to introduce mass customization production. Under the guidance of the core competence theory, many manufacturers will outsource their logistics activities to a professional third-party logistics companies which are good at supply chain management. This paper constructs an objective function on profit maximization of manufacturer, so that it discusses how the costs of third-party logistics service influence the income of manufacturers. Also, the article determines the best price which is expected to maximize the benefits of manufacturers.