Matching Demand and Supply to Maximize Profits from Remanufacturing

The profitability of remanufacturing depends on the quantity and quality of product returns and on the demand for remanufactured products. The quantity and quality of product returns can be influenced by varying quality dependent acquisition prices, i.e., by using product acquisition management. Demand can be influenced by varying the selling price. The authors develop a simple framework for determining the optimal prices and the corresponding profitability. They motivate and illustrate their framework using an application from the cellular telephone industry.