Market Segmentation and Product Technology Selection for Remanufacturable Products
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- 1 August 2005
- journal article
- Published by Institute for Operations Research and the Management Sciences (INFORMS) in Management Science
- Vol. 51 (8), 1193-1205
- https://doi.org/10.1287/mnsc.1050.0369
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.Keywords
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