The profitability of remanufacturing systems for different cost, technology, and logistics structures has been extensively investigated in the literature. We provide an alternative somewhat complementary approach that considers demand-related issues, such as existence green segments, original equipment manufacturer competition, product life-cycle effects. a system strongly depends on these issues well their interactions. For monopolist, we show there exist thresholds cost savings, segment...

This paper provides a critical review of analytic research on the business economics product reuse inspired by industrial practice. Insights and assumptions are provided for each paper. We further classify into four streams: engineering/operations research, design, strategy, behavioral, present framework linking these streams. find that some modeling risk being institutionalized, suggest renewed exploration Future should also include empirical work consumer behavior, diffusion, valuation returns.

Product and waste take‐back is becoming more regulated by countries to protect the environment. Such regulation puts an economic burden on firms, while creating fairness concerns potentially even missing its primary target: environmental benefits. This research discusses impacts of extended producer responsibility type legislation identifies efficiency conditions. It shown that right policy would (i) make producers responsible for their own avoid (ii) favor eco‐design create stronger...

This paper models and quantifies the cost-savings potential of production systems that collect, remanufacture, remarket end-of-use products as perfect substitutes while facing fundamental supply-loop constraints limited component durability finite product life cycles. The results demonstrate need to carefully coordinate cost structure, collection rate, cycle, create or maximize savings from remanufacturing.

Remanufactured products do not always cannibalize new product sales. To minimize cannibalization and create additional profits, managers need to understand how consumers value remanufactured products. This is a static decision should be re-evaluated over the entire life cycle. While have responsibility maximize profits for firm, this necessarily equivalent maximizing A portfolio that includes can enable firms reach market segments help block competition from low-end or third-party remanufacturers.

In this paper, we investigate whether and how the presence of remanufactured products identity remanufacturer influence perceived value new through a series behavioral experiments. Our results demonstrate that sold by original equipment manufacturer (OEM) can reduce up to 8%. However, third-party-remanufactured increase 7%. These suggest deterring third-party competition via preemptive remanufacturing may profits, whereas actually be beneficial for an OEM. This paper was accepted Serguei...

We study the impact of product recovery on a firm's quality choice, where is defined as an observable performance measure that increases consumer's valuation for product. consider three general forms recovery: (i) when reuses (after reprocessing) inducing components or material (e.g., remanufacturing), (ii) does not reuse but it overall profitable cell phone recycling), and (iii) costly (but mandated by legislation, e.g., recycling small appliances in European Union). Using stylized economic...

We investigate the implications of collective and individual producer responsibility ( CPR IPR, respectively) models product take‐back laws for e‐waste on manufacturers’ design recovery (DfR) choices profits, consumer surplus in presence competition. show that IPR offers superior DfR incentives as compared to CPR, provides a level competitive ground. may distort competition allow free‐riding efforts reduce costs. Thus, manufacturer preferences or differ because under with even high‐end...

This note discusses the impact of collection cost structure on optimal reverse channel choice manufacturers who remanufacture their own products. Using functions that capture rate and volume dependency, we show (retailer‐ vs. manufacturer‐managed collection) is driven by how moderates manufacturer's ability to shape retailer's sales quantity decisions.

Agrowing stream of environmental legislation enforces collection and recycling used electrical electronics products. Based on our experiences with producers coping e‐waste legislation, we find that there is a strong need for research the implications such from an operations perspective. In particular, as discipline at interface systems design economic modeling, focused can be extremely useful in identifying appropriate take‐back implementations different business environments how should...

In this study, we compare two common forms of product take‐back legislation implementation: (i) manufacturer‐operated systems, where the state imposes certain objectives on manufacturers, and (ii) state‐operated manufacturers or consumers finance through recovery fees. We show that their impacts different stakeholders, is, social welfare, consumers, environment, can be significantly stakeholder preferences for these models vary depending operating environments (e.g., production costs,...

Operations management (OM) research has made several important contributions to environmental sustainability over the last two decades. In this article, we point a new opportunity on horizon—the circular economy movement, which is gaining significant traction in practice. We introduce concept and highlight building blocks behind it. also explain why trend practice can provide an for OM community. To do so, describe four companies that have been positioned as prime examples of implementing...

Extended producer responsibility (EPR) is a policy tool that holds producers financially responsible for the post-use collection, recycling, and disposal of their products. Many EPR implementations are collective—a large collection recycling network (CRN) handles multiple producers’ products in order to benefit from scale scope economies. The total cost then allocated based on metrics such as return shares by weight. Such weight-based proportional allocation mechanisms criticized practice...

We analyze product design implications of extended producer responsibility (EPR)-based take-back legislation on durable goods. In particular, we observe that incentives under EPR may involve an inherent trade-off has not been explored to date: Durable goods producers can respond by making their products more recyclable or durable, where the former decreases unit recycling cost and latter reduces volume recycle. When these two attributes do go hand in hand, as is case for many categories, be...

We review the sustainable operations management research published in first 20 years of Manufacturing & Service Operations Management (M&SOM), and we outline our hopes for next years. This provides a “big picture” overview trends M&SOM, along with an impact assessment both inside outside boundaries research. provide brief chronological survey publications as well high-level citation analysis. Together, these analyses indicate that topics studied M&SOM have largely followed...

Problem definition: We study how extended producer responsibility (EPR) legislation implementations for durable products should differ from those nondurable products. Academic/practical relevance: Certain unique characteristics of markets products, which make designing EPR more challenging, have not been explored to date in academia and practice. fill this void by investigating the effect on durable-goods markets. Methodology: develop a game-theoretic model analyze producers’ secondary...

A key goal of Extended Producer Responsibility (EPR) legislation is to provide incentives for producers design their products recyclability. EPR typically implemented in a collective system, where network recycling resources are coordinated fulfill the obligations set producers, and resulting system cost allocated among these producers. Collective prevalent because its efficiency advantages. However, it considered inferior compared an individual implementation (where individually). In this...

Extended Producer Responsibility (EPR)-based product take-back regulation holds OEMs (Original Equipment Manufacturers) of electronics responsible for the collection and recovery (e.g., recycling) electronic waste (e-waste). This is because assumption that recycling these products has a net cost, unless regulated they end up in landfills harm environment. However, last decade, advances design technologies have allowed profitable recycling. change challenges basic behind such creates...

We investigate the economic and environmental implications of jointly implementing leasing modularity, two prominent circular economy strategies, their interaction. develop a durable goods model to obtain insights for firms considering use these strategies. first analyze effect adopting on firm’s product architecture choice. find that modular is more attractive under only if off-lease products depreciate greater extent. next business can cause firm switch selling but will not lead leasing....

Many firms delegate pricing decisions to sales agents that directly interact with customers. A premise behind this practice is can gather informative signals about the customer’s valuation for good of interest. The information acquired through interaction customer then be used make better decisions. We study underlying principal-agent problem arises in such situations. In setting, agent exert costly effort learn a and decide on price quote customer, whereas firm needs offer contract induce...

We consider a newsvendor who dynamically updates her forecast of the market demand over finite planning horizon. The evolves according to martingale model evolution (MMFE). can place multiple orders with increasing ordering cost time satisfy that realizes at end In this context, we explore trade-off between improving and cost. show optimal policy is state-dependent base-stock analytically characterize level depends on information state in linear (log-linear) fashion for additive...

Summary The goal of this article is to contribute the understanding how multiple, and sometimes conflicting, stakeholder perspectives prevailing conditions (economic, geographic, etc.) in implementation locality shape extended producer responsibility (EPR) “on ground.” We provide an in‐depth examination dimension EPR a specific case study by examining concrete activities at operational front collection recycling system, probing varying preferences that have driven system its status quo. To...

We analyze how salesforce incentives influence a firm's remanufacturing strategy and profitability. first consider incentive model based on the practice of North American consumer products firm, which offers commissions total revenue generated from new remanufactured product sales. then with differentiated linear for products. show that offered to induce effort can create conditions where firm should not sell products, even if cost is negligible. demonstrate this result holds compensation...