Essays on Sustainable Operations: Revisiting Remanufacturing Strategy in the Context of Current Industry Practices

Abstract

Remanufacturing has long been defined as “the process in which used components (modules) are processed to satisfy exactly the same quality and other standards as new components.” We refer to this classical mode of remanufacturing as like-to-like remanufacturing, which brings the product to its original condition and configuration. This mode has retained its attractiveness in academia for decades, and much research has been conducted regarding the process and strategy from both the remanufacturer’s and the customer’s perspectives.

However, current industry practices have slightly drifted from this rigid mode of remanufacturing like-to-like. On one hand, some remanufacturers and retailers are offering remanufactured products that are working properly but may have cosmetic defects. Some even offer remanufactured products that are differentiated in cosmetic quality. On the other hand, the industry calls for more flexible manufacturing/remanufacturing to adapt to fast-changing technology and reduce electronic waste.

This dissertation puts forth three essays that contribute to the remanufacturing strategies literature about the aforementioned new industry practices. The first essay explores the conditions under which remanufacturers should make items upgradable to the current technology or restore them to their original configuration based on the industry innovation rate (which causes value depreciation), the product’s initial value relative to its incremental remanufacturing cost, and the cores’ acquisition times. The second and third essays provide the first assessment of quality differentiated remanufacturing and fill the gap between practice and academia. In particular, the second essay analytically examines remanufacturers’ decisions on quality-differentiated remanufactured products when supply is constrained by the number of returns in each quality category. The third essay investigates the offering of differentiated remanufactured products from the consumer’s perspective using randomized experiments.