Joint effects of remanufacturing channel design and after-sales service pricing: an analytical study

Li, Kunpeng; Li, Yang; Gu, Qi; Ingersoll, Alicia R.

doi:10.1080/00207543.2018.1500722

Cited by 34 publications

(13 citation statements)

References 14 publications

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“…Shi [21] Studied the spare parts inventory control problem under such a setting, where remanufacturing parts from product returns are adopted as the main approach to ensure a sufficient supply, and found that the inventory control target increases with the installed base size and part failure rate. Meanwhile, Li et al [22] conducted an analytical study on remanufacturing channel design and after-sales service pricing, which jointly affect the sustainability and profitability of the supply chain, and revealed that it is most efficient for the retailer to collect the used product for remanufacturing and to offer an after-sales service. Han et al [23] then considered an OEM who can handle used products by using different recovery strategies and found that when the government subsidy increases, the possible cannibalization leads to OEM adopting both recycling materials and a remanufacturing product strategy.…”

Section: Literature Reviewmentioning

confidence: 99%

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Revenue and Cannibalization: The Effect of Interchangeable Design Confronted Remanufacturing Processing

Chen

Sun

2021

Processes

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Traditional wisdom suggests that the interchangeable design in process system engineering, such as modularity or commonality design, can lower the manufacturing cost and act as a revenue driver. Moreover, the interchangeable design will be efficient in both assembling for new production and disassembling for remanufacturing. As such, interchangeable design confronted remanufacturing processing often involves a balance of revenue from cost drivers and cannibalization effects from remanufacturing. Therefore, this paper studies how the original equipment manufacturers’ (OEMs’) interchangeable design impacts the remanufacturing decisions, as well as the economy and environment. Specifically, we develop two theoretical models, in which an OEM makes a strategic choice relating to design interchangeability when the remanufacturing operations are undertaken by itself (Model O) or outsourced to third-party remanufacturers (Model T). This study finds that, although the optimal level of interchangeability related to the product design in Model T is lower than that in Model O, the optimal quantity of remanufactured products in the latter scenario is always higher. This suggests that remanufacturing outsourcing deters the OEM’s strategic choice on design interchangeability, which may be consistent with the fact that Lexmark makes its products less interchangeable to avoid remanufacturing from third-party remanufacturers (TPRs). Conversely, although the OEM is always less likely to outsource its remanufacturing operations to independent remanufacturers, remanufacturing outsourcing may be more beneficial for the environment, industry, and society. These key insights on the environmental groups or agencies suggest that remanufacturing outsourcing may be more beneficial for the environment, industry, and society and depends on the OEMs’ attitudes towards its profitability loss. Furthermore, to eliminate the above contrasting effects between the OEMs’ profitability and other issues, two possible remedies, including a revenue-sharing contract and subsidy-incentive mechanism, are provided to achieve a “win-win” situation.

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Section: Literature Reviewmentioning

confidence: 99%

“…[5], Stanton et al[17]，Joshi et al[18], Afrin et al[13] √ ✗ Majumder and Groenevelt[20], Shi[21], Li et al[22], Han et al[23], Zhang et al[15], Geda and Kwong[16] …”

mentioning

confidence: 99%

Revenue and Cannibalization: The Effect of Interchangeable Design Confronted Remanufacturing Processing

Chen

Sun

2021

Processes

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“…The ASS is often provided by manufacturer or retailer freely during usage, 17,18 especially when the customer experiences any problem. 19,20 Thus, the SC for ASS provides supporting tangibles to customers economically and timely in the products’ usage. The maintenance consists of more service items than the ASS, like online-inspection.…”

Section: Comparison Of the Pssc Applicationsmentioning

confidence: 99%

Status review and research strategies on product-service supply chain

Elomri

Zhang

et al. 2020

Proceedings of the Institution of Mechanical Engineers, Part B:

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This study draws a holistic view of the supply chain with three service strategies – namely, after-sales service; maintenance, repair and operations; and the product-service system – by analysing over 71 articles in this field. In this investigation, the content analysis is used to scrutinize the research to establish the knowledge, reveal the research opportunities and propose research strategies. The supply chain for product-service system depends more heavily on the implementation of the cooperation, collaboration and integration principles in operation. However, a complete analysis reveals that those crucial principles did not embody in current literature. Current research also failed to discuss the service operation decisions by modelling the intricate relations among them in a broad product-service supply chain context. Thus, the future research directions include developing service demand forecasting models; combining the time-series methods and the causal methods; establishing service resource planning models; addressing the relations between service deliverables, service capacity and the service resource; and strengthening the quantitative evaluation of the product-service supply chain performance with a systemic view. Moreover, by addressing the principles of cooperation, collaboration and integration, the added values of this review are the proposed research strategies for integrated forecasting of product services, integrated product-service resource allocation and scheduling, and systematic performance evaluation of the product-service supply chain. The findings and the proposed research strategies develop an in-depth understanding of product-service supply chain applications and serve as a basis for future research.

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“…After-sale service is an integrable part of marketing activities [5]- [9]. The after-sale service experience of each buyer about a product forms a part of the WOM of the product.…”

Section: Introductionmentioning

confidence: 99%

Dynamic Maintenance Strategy for Word-of-Mouth Marketing

et al. 2020

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After-sale service is an integrable part of marketing activities. The after-sale service experience of a consumer can be measured by the dynamic maintenance (DM) strategy used by the merchant, i.e., the instantaneous fractions of the maintenance cost paid by the merchant in the total maintenance cost at all time. This paper aims to develop an optimal DM strategy for a word-of-mouth (WOM) marketing campaign. First, we propose an individual-based WOM propagation model in which the effect of the DM strategy is accounted for. Second, we convert the original problem into an optimal control problem, where the objective functional stands for the expected marketing profit, each optimal control stands for an optimal DM strategy. Third, we derive the optimality system for the optimal control problem. By solving the optimality system, we get a potential optimal control. Next, through comparative experiments we conclude that the DM strategy associated with the potential optimal control outperforms most DM strategies in terms of the expected marketing profit. Therefore, we recommend this potential DM strategy. Finally, we examine the effect of some factors on the expected marketing profit for the potential DM strategy. Our findings help to enhance the marketing profit of a WOM marketing campaign.

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Joint effects of remanufacturing channel design and after-sales service pricing: an analytical study

Cited by 34 publications

References 14 publications

Revenue and Cannibalization: The Effect of Interchangeable Design Confronted Remanufacturing Processing

Revenue and Cannibalization: The Effect of Interchangeable Design Confronted Remanufacturing Processing

Status review and research strategies on product-service supply chain

Dynamic Maintenance Strategy for Word-of-Mouth Marketing

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