Postponed Production Optimization for Mass Customization Manufacturer

Production cost for mass customization manufacturers with postponed strategies adopted or not is addressed in this paper. Models are established for both cases. Then, an extending M/M/1 queuing model is applied to minimize the total cost of production. Through simulation and sensitivity analysis, it is shown that the customers’ waiting time and the number of product categories have significant effect on the total cost for the manufacturers. This provides a theoretical support for the manufacturers to correctly determine customer order decoupling point (CODP). Thus, it is a basis for a manufacturer to make decision in implementing a postponed strategy.