A Decision Method to Maximize Service Quality under Budget Constraints: The Kano Study of a Chinese Machinery Manufacturer

Abstract

Manufacturers are increasingly facing keen competition and improving customers’ position in the value chain. Many of them have made efforts to promote service quality and enhance customer satisfaction. Research is lacking in considering the trade-off between service costs and customer satisfaction when tackling service quality issues in the machinery industry. A decision method is proposed for maximizing service quality in machinery industry under budget constraints, from the perspective of enterprise capacity and customer satisfaction. Due to the strength of the Kano model in acknowledging the nonlinear impacts of quality elements on customer satisfaction, we formalize the relationship between customer satisfaction and sufficiency of service quality elements quantitatively. And then we develop a novel nonlinear programming model to maximize service quality under budget constraints. In particular, we implement our model at Xuzhou Construction Machinery Group Co., Ltd., one of the largest Chinese construction machinery companies, to validate the efficacy of the method.