When to Start Remanufacturing Using Adopter Categorization

Remanufacturing of goods involves taking the product back from the customer so as to use it as a feedstock for manufacturing new products. It provides double benefits of cost and environmental saving to the manufacturer and society, respectively. One of the major challenges faced by original equipment manufacturer (OEM) here is forecasting quantity returned by the customers and when to start remanufacturing. In this paper, we formulate a strategy for OEMs to optimize time to start remanufacturing using the adopter categorization approach as proposed by Roger. We propose an optimization model based on famous Bass diffusion model to depict not only the quantity returned in the remanufacturing process but also the amount of cost saving a manufacturer does with efficient remanufacturing. With data on 11 consumer durable products, we compare product returned under various adopter categorization time point. An application examining the diffusion of these products under remanufacturing scenario is documented to illustrate the usefulness of the proposed strategy.