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The Economics of Remanufacturing Under Limited Component Durability and Finite Product Life Cycles

Donald Bren School of Environmental Science & Management, University of California, Bren Hall 3426, Santa Barbara, California 93016
Technology Management, INSEAD, Boulevard de Constance, 77305 Fontainebleau, France
Technology Management, INSEAD, Boulevard de Constance, 77305 Fontainebleau, France
geyer{at}bren.ucsb.edu
luk.van-wassenhove{at}insead.edu
atalay.atasu{at}insead.edu

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

Key Words: remanufacturing; life cycle; durability; economic model
History: Received: July 1, 2003;

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