Resource title

Remanufacturing products with limited component durability and finite life cycles

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Resource description

Remanufacturing recovers value from end-of-life products by reusing their durable components for the manufacturing of a product with the original functionality. The examples of remanufacturing in industry suggest that its economic success as a corporate strategy depends on the way the costs of all involved operations are matched with the collection rate of end-of-life products, the component durability and the market demand for remanufactured products. The authors assess the economic impact of these interdependencies when the remanufactured product is a perfect substitute for the all-new one, i.e. market demand for the remanufactured product is only limited by the length of the product life cycle. The quantitative results of their systemic and non-linear modeling approach indeed show that remanufacturing is profitable only if component durability and length of the product life cycle are in tune with the costs and the efficiency of the production and collection system. The length of the product life cycle and the component durability also need to be coordinated with each other but the authors find that this can be done independently of the collection rate.

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Resource language

en

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application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2003/2003-54.pdf

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Copyright INSEAD. All rights reserved