Journal
EUROPEAN JOURNAL OF OPERATIONAL RESEARCH
Volume 203, Issue 2, Pages 370-379Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.ejor.2009.08.007
Keywords
Remanufacturing; Differentiated products; Monopoly; Product portfolio; Multi-period horizon
Funding
- Naval Postgraduate School
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We study a firm that makes new products in the first period and uses returned cores to make remanufactured products (along with new products) in future periods. The remanufactured product is differentiated from the new product, so the firm needs to choose differentiated prices. We analyze the monopoly environment in two-period, multi-period (three, four and five) and infinite planning horizons, and characterize the optimal remanufacturing and pricing strategy for the firm. In the process, we identify remanufacturing savings thresholds that determine the production and pricing strategy for the firm. Among other results, we find-counter to intuition-that in a finite-horizon, multi-period setting, the optimal policy is not necessarily monotone in remanufacturing savings. Published by Elsevier B.V.
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