Matching Demand and Supply to Maximize Profits from Remanufacturing

V. Daniel R. Guide; Ruud H. Teunter; Luk N. Van Wassenhove

doi:10.1287/msom.5.4.303.24883

Matching Demand and Supply to Maximize Profits from Remanufacturing

V. Daniel R. Guide¹; Ruud H. Teunter²; Luk N. Van Wassenhove³

¹ Department of Supply Chain and Information Systems, Smeal College of Business Administration, The Pennsylvania State University, University Park, Pennsylvania 16802-3005 · ² Faculty of Economics, Erasmus University, Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands · ³ INSEAD, Boulevard de Constance, 77305, Fontainebleau Cedex, France.

Manufacturing and Service Operations Management 2003

The profitability of remanufacturing depends on the quantity and quality of product returns and on the demand for remanufactured products. The quantity and quality of product returns can be influenced by varying quality-dependent acquisition prices, i.e., by using product acquisition management. Demand can be influenced by varying the selling price. We develop a simple framework for determining the optimal prices and the corresponding profitability. We motivate and illustrate our framework using an application from the cellular telephone industry.

DOI: 10.1287/msom.5.4.303.24883
Volume: 5 (4)
Pages: 303-316
Language: en
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