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Auction-based variety formation and steering for mass customization

: Blecker, Thorsten; Abdelkafi, Nizar; Kreutler, Gerold; Kaluza, Bernd

Electronic markets : EM 14 (2004), No.3, pp.232-242
ISSN: 1019-6781 (Print)
ISSN: 1422-8890 (Online)
Journal Article
Fraunhofer MOEZ ( IMW) ()

Large product variety in mass customization induces a high internal complexity level inside a company's operations, as well as a high external complexity level from a customer's perspective. Both complexity problems should be addressed respectively within the scope of variety formation and variety steering tasks. To support these tasks, an information system based on an electronic market is identified as a suitable solution approach. Therefore, we consider the main product building blocks as autonomous rational agents participating in an auction market where they compete by bidding to form product variants with the best chances to suit customers' requirements. In this market, the agents with the best bidding strategies are capable of ensuring their self‐preservation. Thus, a framework for supporting the auction market, the main agents in this market, as well as an appropriate coordination mechanism are proposed in order to support variety formation and variety steering tasks.