Product Line Design With Schedule And Price Considerations Under Asymmetric Customer Valuation

As the development of social economics, the customers’ demands are more and moreindividualization, because of their different nationalities, different social stratum, differentlife styles, their demands for products are different. So, they do not satisfied with “have”,but hoping to show self-style by the products they bought, this is a huge challenge to firms,they can no longer provide few products to most of customers or even the whole market,their decisions not only refers to production and pricing, but also refers to product linedesign.The thesis first discusses the definition and importance of product line, and thengives a review about product line design at home and abroad, also we discuss theinsufficient of the research now. The innovation of the thesis is comparing with currentresearch, we consider production decision, price decision and product line design decisionsimultaneously. On demand side, the thesis focuses on asymmetric information andcustomers belong to different styles under which the firm is unable to observe thepreferences of individual customers, this will lead to cannibalization problems. So the firmshould consider this problem when she makes decisions. On the supply side, we bringproduction process in product line design with classic EPQ model, because the firm facesthe capacity of her product line, she can not design her product line without limit. At last,the thesis will compare different product line design, we analyze under differentproduction technology (in this paper, production technology is characterized by fixedsetup cost, unit holding cost and unit production cost), the firm’s optimal decision ofproduct line design, production planning and price decision. In last section of this thesis,we discuss the limitation and give a preview of some possible directions.