Manufacturing vs. remanufacturing: Study and analysis of a green supply chain in Japan and Europe

In this study, we analyse the side effects of the remanufacturing process, which are the cannibalisation effect, negative, and the market expansion, positive, when both new and remanufactured goods are sold in the market. This research is conducted analysing a manufacturing Japanese firm which produces printers and whose production process is a hybrid system of manufacturing and remanufacturing. In the first part of our study, we give a quantitative evaluation of both cannibalisation effect and market expansion, in order to estimate which one impacts more on the performance of the firm. Next, through the implementation of a mathematical formulation of the problem by means of a commercial solver, we were able to determine the price of remanufactured items which guarantees the maximum profit to the company, with the aim to compare the latter to the profit gained when only new items are sold. By the experiments conducted, it emerges that the remanufacturing process is more profitable than the model with only new goods sold. Therefore, it is worthwhile to investigate such kind of practices in supply chain management policies.