Combining fuzzy AHP and fuzzy Kano to optimize product varieties for smart cameras: A zero-one integer programming perspective

In an era of global customization, dominating the majority market with a single product has become increasingly difficult and almost impossible for most companies. In contrast, they must provide various product varieties that attract diverse customers, particularly when acquiring distinct market segments. In practice, however, most companies cannot effectively reduce the gap between customer requirements and design characteristics, although this impacts the profitability and future growth of companies. Meanwhile, companies often get stuck in the trade-offs between enhancing product varieties and controlling manufacturing costs. Accordingly, this paper proposes a hybrid framework that combines fuzzy analytical hierarchy process (AHP), fuzzy Kano model with zero-one integer programming (ZOIP) to incorporate customer preferences and customer perceptions into the decision-making process of product configuration. Specifically, fuzzy AHP is used to extract customer preferences for core attributes while fuzzy Kano model is utilized to elicit customer perceptions of optional attributes. Finally, by virtue of ZOIP, the optimal product varieties ( smart cameras) for distinct segments are determined by maximizing overall customer utility (OCU) and taking a firm's pricing policy into account. (C) 2014 Elsevier B.V. All rights reserved.