Impact of cannibalization in a remanufacturing supply chain
Abstract
Using a Bass Diffusion model we investigate the effect of cannibalization within a hybrid manufacturing /remanufacturing/refurbishing system. The hybrid system consists of newly manufactured products, remanufactured products, and refurbished products. The impact of the collection, remanufacturing, and refurbishing ratios on economic performance are simulated and analyzed. We numerically calculate profit and investigate the relationship between the demand for manufactured and remanufactured products. We conclude that the proposed hybrid manufacturing/remanufacturing/refurbishing model can evaluate the cannibalization effect quantitatively and that the hybrid manufacturing/remanufacturing/refurbishing system is more profitable than a non-remanufacturing system, even when cannibalization is present.