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Product customization has become an important approach to meet individual customers’ needs. One of major challenges in product customization is to assist customers making informed decisions in terms of the company capability and the value-added by customization. The ramification is not only helping customers selecting the most appropriate products but also helping the company to decide what to design and produce. In this paper, taking into consideration of its diversity, customer value can be measured as the quality utility per unit cost, or the ratio of marginal utility and marginal cost. Customer Value Oriented Product Customization (CVOPC) is developed as a systematic process to quantify the quality utility through guiding customers to make customization choices that reflect the balance of customer-valued quality and cost. A modified conjoint analysis is applied to capture the customer’s utility function of quality in terms of specific product features. A case study of designing module power supplies for a telecommunication system is presented.
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Du et al. (1999) studied this question.