Market segmentation and product technology selection for remanufacturable products

Market segmentation and product technology selection for remanufacturable products

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Article ID: iaor2008685
Country: United States
Volume: 51
Issue: 8
Start Page Number: 1193
End Page Number: 1205
Publication Date: Aug 2005
Journal: Management Science
Authors: , ,
Keywords: remanufacturing
Abstract:

Remanufacturing is a production strategy whose goal is to recover the residual value of used products. Used products can be remanufactured at a lower cost than the initial production cost, but consumers value remanufactured products less than new products. The choice of production technology influences the value that can be recovered from a used product. In this paper, we solve the joint pricing and production technology selection problem faced by a manufacturer that considers introducing a remanufacturable product in a market that consists of heterogeneous consumers. Our analysis discusses the market and technology drivers of product remanufacturability and identifies some phenomena of managerial importance that are typical of a remanufacturing environment.

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