Pricing strategy for product reuse at three quality levels when demand is sensitive to price and availability  

Oleh:

Yu, Jonas C.P.

Jenis: Article from Proceeding
Dalam koleksi: The 14th Asia Pacific Industrial Engineering and Management Systems Conference (APIEMS), 3-6 December 2013 Cebu, Philippines, page 1-8.
Topik: Product reuse; Optimal pricing model; Price and availability sensitive demand; Exact closed-form solution
Fulltext: 1006.pdf (360.75KB)

Isi artikel

This study develops an optimal pricing model for recycling products, which are returned, recovered, and shipped into a secondary market for resale. The probability of selling of recycling products is sensitive to their price and availability. This assumption is rational because price and availability often influence customer demand. The study also assumes that the three quality levels of collected returns exist, which affect the price they are sold for. This paper determines optimal selling prices for re-manufacturers. The exact closed-form solution is then derived and total profit is maximized to create the remanufacturing model. A numerical example and sensitivity analysis are conducted to demonstrate the model. The study provides managerial insights on the benefits of revenue management for product reuse.

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