QFD utilizes House of Quality(HOQ) to provide a conceptual map for design process, as a construction for understanding Customer Requirements (CRs) and establishing priorities of Engineering Characteristics(ECs) to satisfy customer wants. Some methodological problems in the conventional HOQ were discussed. Taking account of the effects of correlation matrix, a nonlinear programming model for selecting an optimal set of ECs was presented by introducing a new concept of modified relation matrix. The proposed model was applied to the quality improvement problem of emulsion dynamite packing-machine as an illustrative example. The model can help design team make full use of information of every part in HOQ, tradeoff various conflicts, set target values of ECs,use same resource to achieve multi-goals and maximize customer satisfaction with limited recourses.