Optimal product service system configuration considering pairing utility and uncertain customer behavior

Yilun Zhang, Jianghang Chen, Zhibin Jiang*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

In the context of manufacturing servitization, manufacturing enterprises offer not only products but also associated services according to customer demands, which is the so-called Product Service System (PSS). In PSS configuration, enterprises need to jointly determine the selected modules with corresponding prices to improve sales profit and customer satisfaction. Better customer satisfaction can be achieved by lower price and larger module utility. Apart from most previous research, we consider not only the single module utility but also the pairing utility, which measures the additional value jointly created by a product module and a service module to illustrate the synergy effect of “product + service”. Furthermore, we take the uncertainty of service utility and customer behavior into account. The former is due to the heterogeneity and intangibility nature of service, and the latter is described by price sensitivity that varies among different customers. To realize the above two contributions, we first establish a multi-objective stochastic programming model to maximize expected customer satisfaction as well as sales profit. For a better trade-off between solution quality and computation efficiency, we develop an improved algorithm based on epsilon-constraint and sample average approximation, including the feasibility examination and accelerating strategy. Finally, numerical experiments are conducted to demonstrate our approach and validate the contributions.

Original languageEnglish
Pages (from-to)343-375
Number of pages33
JournalFlexible Services and Manufacturing Journal
Volume35
Issue number2
DOIs
Publication statusPublished - Jun 2023

Keywords

  • Multi-objective stochastic optimization
  • Pairing utility
  • Pricing
  • Product and service configuration
  • Uncertain behavior

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