Abstract: External variety and internal variety strategies for mass customization are expounded. The similarity, reusability and entirety of mass customization are studied. The various types of similarity are given. The relationship between similarity and reusability is illuminated. The similarity and reusability forming process and improving process from an overall point of view are analyzed. The total cost model for mass customization theory is built. The average cost principle for mass customization is presented through contrast research on customized production, mass production and mass customization. The terms of customization value, customization cost, critical customer order de-coupling point(CODP), external CODP, internal CODP are defined and explained. Furthermore CODP principle is presented on the basis of these terms.

Key words: Average cost, Customer order de-coupling point (CODP), Mass customization, Principle, Similarity