Managing New and Remanufactured Products

Geraldo Ferrer () and Jayashankar M. Swaminathan ()
Additional contact information
Geraldo Ferrer: Graduate School of Business and Public Policy, Naval Postgraduate School, Monterey, California 93943-5103
Jayashankar M. Swaminathan: Kenan-Flagler Business School, University of North Carolina at Chapel Hill, Chapel Hill, North Carolina 27599-3490

Management Science, 2006, vol. 52, issue 1, 15-26

Abstract: We study a firm that makes new products in the first period and uses returned cores to offer remanufactured products, along with new products, in future periods. We introduce the monopoly environment in two-period and multiperiod scenarios to identify thresholds in remanufacturing operations. Next, we focus our attention on the duopoly environment where an independent operator (IO) may intercept cores of products made by the original equipment manufacturer (OEM) to sell remanufactured products in future periods. We characterize the production quantities associated with self-selection and explore the effect of various parameters in the Nash equilibrium. Among other results, we find that if remanufacturing is very profitable, the original-equipment manufacturer may forgo some of the first-period margin by lowering the price and selling additional units to increase the number of cores available for remanufacturing in future periods. Further, as the threat of competition increases, the OEM is more likely to completely utilize all available cores, offering the remanufactured products at a lower price.

Keywords: remanufacturing; duopoly; self-selection; product-line pricing (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (242)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.1050.0465 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:52:y:2006:i:1:p:15-26

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().