A bilevel-optimization approach to determine product specifications during the early phases of product development: Increase customer value and reduce design risks

•Product specifications’ definition needs iterations and tradeoffs.•An iterative decision-making process integrated with PLM factors is constructed.•A bilevel-optimization model to clarify the tradeoffs is presented.•A customer perceived value model is constructed based on customer value components.•A cost-based concept FMEA is constructed.