Pricing Decision for Unsold New and Remanufactured Products With Optimal Production Planning

Abstract

New generation of high-technology products are lunched with an intensive innovation rate before the early generation is sold out. While in the market of remanufactured products, upgrading is necessary to keep pace with the technology development. Additionally, the supply of the remanufactured products is restricted by the returned cores. Hence, a problem surfaces because of the unattractive new products belonging to the early generation stock, while the attractive refurbished products belonging to the updated technology are in short supply. Returning number of unsold products for upgrading provides a possible solution. This paper provides a method to price the new and the remanufactured products. How many unsold new products would be returned to remanufacture and how many used products would be acquired are in the scope of this paper. A profit maximization model associated with discrete choice demand function is provided.