A STUDY ON THE EFFECTS OF CONSUMER PREFERENCE ON PROFITABILITY IN A MASS CUSTOMIZATION SUPPLY CHAIN MODEL

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Date

2006

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Japan Joint Automation Control Conference, Kobe University, Japan

Abstract

In a bid to improve their competitiveness, there is a rapid growth in the number of firms adopting the “customer-is-king” philosophy by embedding mass-customization into their goods and services delivery network. The adaptation of essentially generic products to suit customer needs results in goods passing through the same production line having varying prices depending on the specificity of the products. In this paper, we discuss a model for studying the effects of consumer behaviour as indicated by their preference indices on the available products and variation in their purchasing power, on the profitability of a firm. This market-based framework gives a monetary-based insight into some issues like innovation, competitive advantage window, customer disposition to premium prices, etc, which planners consider during mass-customization of products. Results from simulations based on Market-Oriented Programming are presented.

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Keywords

Supply Chain, Profitability, Market-Oriented Programming, Mass-customization, Multi-Agent Simulation

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