Product Decision in a Flexible Production System: Pure Standard Product or Mixed Mass Customization

This research examines the effectiveness of mass customization strategies in a production system with unlimited flexible production capacity. The manufacturing firm produces standard products in a flexible factory where mass customization is technologically feasible. We explore whether the manufacturing firm should adopt mass customization. We find that the mixed mass customization strategy dominates the pure standard product strategy when the setup cost for mass customization is negligible in the production system. We identify the parameters that would impact superiority of each product strategy.