Managing component reuse in remanufacturing under product diffusion dynamics

Rapid changes in technology have precipitated the disposal of increasing amounts of used products and components. To mitigate the side effects of product disposal and decrease the associated costs in the overall value chain, remanufacturing has been advocated as an important approach given its formation of a closed-loop value chain. The key to fully achieving the benefits of remanufacturing lies in the efficient and cost-effective reuse of components from end-of-life products. In this paper, we attempt to model the economic benefits of component reuse in the remanufacturing supply chain and examine how product diffusion dynamics in the market affect the volume of components reused in the single-generation life cycle of a product. We use the Bass model to model the product diffusion process and facilitate analysis of the economic benefits of component reuse and remanufacturing. We then derive the optimal component reuse volume and the corresponding acquisition costs. We present analytical results and case study to show the merits of the proposed methodology and gain insights that can be applied to component reuse decisions in remanufacturing. Copyright © 2016 Elsevier B.V. All rights reserved.