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: | Wassenhove Luk N. Van, Toktay L. Beril, Debo Laurens G. |
Keywords: | remanufacturing |
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.