Managing new and differentiated remanufactured products
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Authors
Ferrer, Geraldo
Swaminathan, Jayashankar M.
Subjects
Remanufacturing
Differentiated products
Monopoly
Product portfolio
Multi-period horizon
Differentiated products
Monopoly
Product portfolio
Multi-period horizon
Advisors
Date of Issue
2010
Date
Publisher
Elsevier
Language
Abstract
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.
Type
Article
Description
The article of record as published may be located at http://dx.doi.org/10.1016/j.ejor.2009.08.007
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NPS Report Number
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Funding
The authors thank the associate editor and three anonymous referees for the comments and recommendations that helped improve this paper. Geraldo Ferrer gratefully thanks the financial support of the Acquisitions Research Program of the Naval Postgraduate School.
Format
Citation
European Journal of Operational Research, 203, (2010), pp. 370–379
Distribution Statement
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This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.