A Determination Method of Optimal Customization Degree of Logistics Service Supply Chain with Mass Customization Service

Table 1

Model notations.

Notations	Description
𝛾	Customization degree
𝑡	Customization degree factor
𝑎	Potential demand of customer
𝑏	The price sensitive parameter of customer
𝜇	The change rate of demand
𝐶1	The unit cost of complete large-scale logistics service that the LSI provides to customer
𝐶2	The unit increased cost, compared with complete large-scale logistics service that the LSI provides to customer
𝐶	The total unit cost of MCLS that the LSI provides to customer
𝑃	The unit price of MCLS that the LSI provides to customer
𝑃0	Besides the cost of MCLS, the production cost of the customer’s products
𝑃1	The unit price of the product, when the customer accepted MCLS
𝑄	The total demand of customer for MCLS
𝑄0	The increased demand caused by customization
𝑄1	The demand of customer when the LSI provides complete large-scale logistics service to customer
𝜔	Marginal profit ratio that the LSI provides complete large-scale logistics service to customer
𝛽	The proportion that borne by customer for increased cost of customization
𝜋1	The total profit of LSI
𝜋2	The total profit of customer
𝜋𝑇	The total profit of LSI and customer
𝜋1^′	The optimal total profit of LSI
𝜋2^′	The optimal total profit of customer
𝜋𝑇^′	The optimal total profit of LSI and customer
Δ𝜋1	The profit-loss when customization degree decided by concentrated supply chain, compared with customization degree dominated by LSI
Δ𝜋2	The profit-loss when customization degree decided by concentrated supply chain, compared with customization degree dominated by customer
𝜋final1	The final profit of LSI after profits secondary distribution
𝜋final2	The final profit of customer after profits secondary distribution
𝑀1	The profit paid to LSI in profits secondary distribution
𝑀2	The profit paid to customer in profits secondary distribution
𝜋^case𝑖1(𝑖=A,B,C)	The profit of LSI in the three different decision modes of A, B, C
𝜋^case𝑖2(𝑖=A,B,C)	The profit of customer in the three different decision modes of A, B, C
𝜋^case𝑖𝑇(𝑖=A,B,C)	The total profit of LSI and customer in the three different decision modes of A, B, C
𝑡^caseA	The customization degree factor that can make the profit of the LSI is maximum, when the customization degree dominated by LSI
𝑡^caseB	The customization degree factor that can make the profit of the customer is maximum, when the customization degree dominated by customer
𝑡^caseC	The customization degree factor that can make the profit of the LSI and the customer is maximum, when the customization degree decided by concentrated supply chain