Abstract

Mass customization provides customers with the ability to design products and services according to their individual needs through highly flexible processes. In the context of services, this approach calls for the effective allocation of limited service capacity in order to meet customer requirements, thereby increases customers’ value on a product in terms of its available options, price, and schedule. In this thesis, we introduce a web-based auction design for the mass customization of services under capacity constraints. The proposed system design integrates customers’ decision making with a decentralized service customization process through a web-based auction model. This web-based auction system is implemented using an iterative bidding procedure in order to maximize the overall customer value given limited capacity. Experimental results indicate that the solutions obtained from our web-based auction closely approximate those of the optimal outcome. Moreover, it was found that reductions to services customizability significantly decreased customer overall value and auction revenue.