Remanufacturing and the Component Commonality Decision

Ravi Subramanian · Mark E. Ferguson · L. Beril Toktay

137 citations0/0 files storedProduction and Operations Management

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Sustainable Supply Chain Management Supply Chain and Inventory Management Product Development and Customization

Abstract

Firms often determine whether or not to make components common across products by focusing on the manufacturing and sales of new products only. However, component commonality decisions that ignore remanufacturing can adversely affect the profitability of the firm. In this article we analyze how remanufacturing could reverse the OEM's commonality decision that is based on the manufacturing and sales of new products only. Specifically, we determine the conditions under which the OEM's optimal decision on commonality may be reversed and illustrate how her profit can be significantly higher if remanufacturing is taken into account ex ante . We illustrate the implementation of our model for two products in the Apple iPad TM family.

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References

1978Monopoly and product quality 2004Closed-Loop Supply Chain Models with Product Remanufacturing 2008Remanufacturing as a Marketing Strategy 1995Global Sensitivity Analysis 1998Planning for Product Platforms 2001THE IMPACT OF PRODUCT RECOVERY ON LOGISTICS NETWORK DESIGN 2006The Effect of Competition on Recovery Strategies 2006Managing New and Remanufactured Products

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