Managing new and differentiated remanufactured products
We study a firm that makes new products in the first period and uses returned cores to make remanufactured products (along with new products) in future periods. The remanufactured product is differentiated from the new product, so the firm needs to choose differentiated prices. We analyze the monopo...
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Published in | European journal of operational research Vol. 203; no. 2; pp. 370 - 379 |
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Main Authors | , |
Format | Journal Article |
Language | English |
Published |
Amsterdam
Elsevier B.V
01.06.2010
Elsevier Elsevier Sequoia S.A |
Series | European Journal of Operational Research |
Subjects | |
Online Access | Get full text |
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Summary: | We study a firm that makes new products in the first period and uses returned cores to make remanufactured products (along with new products) in future periods. The remanufactured product is differentiated from the new product, so the firm needs to choose differentiated prices. We analyze the monopoly environment in two-period, multi-period (three, four and five) and infinite planning horizons, and characterize the optimal remanufacturing and pricing strategy for the firm. In the process, we identify remanufacturing savings thresholds that determine the production and pricing strategy for the firm. Among other results, we find—counter to intuition—that in a finite-horizon, multi-period setting, the optimal policy is not necessarily monotone in remanufacturing savings. |
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ISSN: | 0377-2217 1872-6860 |
DOI: | 10.1016/j.ejor.2009.08.007 |