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Matching Demand and Supply to Maximize Profits from Remanufacturing

Author

Listed:
  • V. Daniel R. Guide, Jr.

    () (Department of Supply Chain and Information Systems, Smeal College of Business Administration, The Pennsylvania State University, University Park, Pennsylvania 16802-3005)

  • Ruud H. Teunter

    () (Faculty of Economics, Erasmus University, Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands)

  • Luk N. Van Wassenhove

    () (INSEAD, Boulevard de Constance, 77305 Fontainebleau cedex, France)

Abstract

The profitability of remanufacturing depends on the quantity and quality of product returns and on the demand for remanufactured products. The quantity and quality of product returns can be influenced by varying quality-dependent acquisition prices, i.e., by using product acquisition management. Demand can be influenced by varying the selling price. We develop a simple framework for determining the optimal prices and the corresponding profitability. We motivate and illustrate our framework using an application from the cellular telephone industry.

Suggested Citation

  • V. Daniel R. Guide, Jr. & Ruud H. Teunter & Luk N. Van Wassenhove, 2003. "Matching Demand and Supply to Maximize Profits from Remanufacturing," Manufacturing & Service Operations Management, INFORMS, vol. 5(4), pages 303-316, October.
  • Handle: RePEc:inm:ormsom:v:5:y:2003:i:4:p:303-316
    DOI: 10.1287/msom.5.4.303.24883
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    File URL: http://dx.doi.org/10.1287/msom.5.4.303.24883
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    References listed on IDEAS

    as
    1. L. Beril Toktay & Lawrence M. Wein & Stefanos A. Zenios, 2000. "Inventory Management of Remanufacturable Products," Management Science, INFORMS, vol. 46(11), pages 1412-1426, November.
    2. Fleischmann, Moritz & Bloemhof-Ruwaard, Jacqueline M. & Dekker, Rommert & van der Laan, Erwin & van Nunen, Jo A. E. E. & Van Wassenhove, Luk N., 1997. "Quantitative models for reverse logistics: A review," European Journal of Operational Research, Elsevier, vol. 103(1), pages 1-17, November.
    3. Erwin van der Laan & Marc Salomon & Rommert Dekker & Luk Van Wassenhove, 1999. "Inventory Control in Hybrid Systems with Remanufacturing," Management Science, INFORMS, vol. 45(5), pages 733-747, May.
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