An optimization approach of product design with consumer preference uncertainty

Product design optimization has traditionally been dealt with consumer preference as a deterministic process, such as conjoint analysis and multi-dimensional scaling. Actually, the hypothesis in those methods that consumer needs and preference are static and insulated is questioned by many marketing researchers. Preference dynamic and dependence suggest itself to be a challenging task. This paper reports an application of product design optimization capturing consumer preference uncertainty to laptop design. Preference dynamic character has been described as a Bayesian update process. Then, a generalized utility model is developed to facilitate the influence of preference dependence. To overcome the short of first-choice rule and probabilistic rule, a threshold-based choice rule is presented.