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With the development of communication and information technology, smart home security industry is facing a wide range of applications prospect and rapid development momentum. However, the intense competition among enterprises, low product profit, and changing customer demands require the improvement of product-related services and public services. Therefore, companies must make the product-service mix decisions scientifically, and meet consumer demand with low cost, high efficiency and fast speed.Based on the background of K Company, this thesis puts forward the engineering scheme of product and service portfolio problem. The main content of this thesis is as follows:1) Based on the smart home security market demand, competition, and the future development trend, this thesis analyses K Company’s current situation, and has carried on the SWOT analysis: the company’s opportunities, threats, advantages and disadvantages.2) This thesis investigates the K Company’s network cameras, surveillance cameras, engineering treasure and water supply’s historical sales data. On this basis, chapter three uses moving average, exponential smoothing, regression and other methods to predict the next year’s product demand, which is predicted to lay the foundation for the company’s product and service portfolio optimization.3) Under the idea of productization, this thesis proposes the integer linear programming model for the product and service portfolio with the objective to maximize the profit and the constraint of capacity. The solution of the model is the product and service portfolio of the company for next year, which provides the insights for the managers for optimizing the resource allocation.