Resource title

Life cycle dynamics for portfolios with remanufactured products

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image for OpenScout resource :: Life cycle dynamics for portfolios with remanufactured products

Resource description

Many products considered for remanufacturing are durables that exhibit a well-pronounced product life cycle - they diffuse gradually through the market. The remanufactured product, which is a cheap substitute for the new product, is often put on the market during the life cycle of the new product, and affects its sales dynamics. In this paper, the authors study the integrated dynamics management of a portfolio of new and remanufactured products that progressively penetrate a potential market over the product life cycle. To this end, they extend the Bass diffusion model in a way that maintains the two essential features of remanufacturing settings: (a) substitution between new and remanufactured products and (b) a constraint on the diffusion of remanufactured products due to the limited supply of used products that can be remanufactured. Diffusion is controlled by the prices of new and remanufactured products and the level of remanufacturability of the new product. The authors identify characteristics of the optimal diffusion paths of new and remanufactured products. Finally, they analyze the impact of the diffusion phenomenon on the value and extent of remanufacturing.

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en

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application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2005/2005-19.pdf

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Copyright INSEAD. All rights reserved