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Remanufacturing with innovative features: A strategic analysis.

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Bibliographic Details
Title: Remanufacturing with innovative features: A strategic analysis.
Authors: Cetin, Can Baris1 (AUTHOR) can-baris.cetin@hec.ca, Zaccour, Georges1,2 (AUTHOR) georges.zaccour@gerad.ca
Source: European Journal of Operational Research. Oct2023, Vol. 310 Issue 2, p655-669. 15p.
Subjects: Remanufacturing, Original equipment manufacturers, Newsvendor model, Consumers' surplus, Consumer goods, Young consumers, Product quality
Abstract: • We consider an innovative industry with an OEM and an independent remanufacturer. • We characterize when the OEM should remanufacture or leave it to the IR. • We study the effect of who remanufactures on the remanufactured quantity. • We assess the impact on the different strategies on the environment and consumers. In this study, we investigate the best remanufacturing strategy for the original equipment manufacturer (OEM) and independent remanufacturer (IR) in an innovative industry where the consumer valuation of the products increases with the level of innovation, and we characterize how the best strategy changes with the identity of the remanufacturer. Our work differs from existing articles that investigate the remanufacturing strategy in the presence of quality decisions, by actively including the innovative features in the remanufactured products, as opposed to passively carrying over product quality to the remanufactured products. We consider three remanufacturing strategies: (i) not remanufacturing, (ii) remanufacturing without adding innovative features, and (iii) remanufacturing adding innovative features (upgrading). To analyze the problem, we create a single-period model where the OEM determines the level of innovation and the quantity of new products, in both competitive settings, and either the OEM or IR determines the remanufacturing quantity depending on the competitive setting. We investigate how the firms' environmental impact and the consumer surplus are affected by the competition and the remanufacturing strategy. [ABSTRACT FROM AUTHOR]
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Database: Engineering Source
Description
Abstract:• We consider an innovative industry with an OEM and an independent remanufacturer. • We characterize when the OEM should remanufacture or leave it to the IR. • We study the effect of who remanufactures on the remanufactured quantity. • We assess the impact on the different strategies on the environment and consumers. In this study, we investigate the best remanufacturing strategy for the original equipment manufacturer (OEM) and independent remanufacturer (IR) in an innovative industry where the consumer valuation of the products increases with the level of innovation, and we characterize how the best strategy changes with the identity of the remanufacturer. Our work differs from existing articles that investigate the remanufacturing strategy in the presence of quality decisions, by actively including the innovative features in the remanufactured products, as opposed to passively carrying over product quality to the remanufactured products. We consider three remanufacturing strategies: (i) not remanufacturing, (ii) remanufacturing without adding innovative features, and (iii) remanufacturing adding innovative features (upgrading). To analyze the problem, we create a single-period model where the OEM determines the level of innovation and the quantity of new products, in both competitive settings, and either the OEM or IR determines the remanufacturing quantity depending on the competitive setting. We investigate how the firms' environmental impact and the consumer surplus are affected by the competition and the remanufacturing strategy. [ABSTRACT FROM AUTHOR]
ISSN:03772217
DOI:10.1016/j.ejor.2023.03.027