Market Segmentation and Product Technology Selection for Remanufacturable Products

Laurens G. Debo (), L. Beril Toktay () and Luk N. Van Wassenhove ()
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Laurens G. Debo: Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213
L. Beril Toktay: College of Management, Georgia Institute of Technology, Atlanta, Georgia 30308
Luk N. Van Wassenhove: Technology and Operations Management, INSEAD, 77305 Fontainebleau, France

Management Science, 2005, vol. 51, issue 8, 1193-1205

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: product remanufacturing; market segmentation; technology management (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (213)

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