Abstract
Although the analysis of remanufactured durable products dominates the environmentally conscious manufacturing research, more and more researchers try to focus on modelling short-life cycle products remanufacturing decisions. High-technology products, such as smartphones and laptops are the cases in point. Smartphone companies are opening remanufacturing facilities in third world countries to attract middle-level customers. Remanufacturing of high technology short life products can have a positive impact on the profits as well as the environment.A common strategy for the technology-intensive companies is to update their products continuously to maintain market share as well as customers’ appetites for latest technologies. This creates a multiple-generational product line. When a new generation is released, the market value of the previous generation is reduced, and the price of the generation before last is decreased even more. Meanwhile, remanufactured products of each generation also come to market when they are available. This can result in complex cannibalization among various generational product lines as well as new and remanufactured products.In this study, we develop a model that addresses the issue of pricing the latest generation remanufactured products and old generation new products. The demands are time-dependent and price sensitive. The market is separated from that of the brand new product of latest generation. The system consists of a retailer and a manufacturer. Two scenarios are evaluated in the system. First, each party tries to optimize profit independently. Second, the joint profit is optimized. The results provide optimal pricing decisions in different selling periods.
Published Version
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