Quantifying the Cannibalization Effect of Hybrid Manufacturing/Remanufacturing System in Closed-Loop Supply Chain

In this study, we investigate a hybrid manufacturing/remanufacturing model, encompassing the simultaneous production of manufactured new products and remanufactured products, is designed to investigate the profitability. Two-stage scenarios with varying collection ratios, remanufacturing ratios, and refurbishing ratios are made and analyzed using the proposed model. In the first stage, only new products are sold and the end-of-use products are collected. In the second stage, both new and remanufactured products are sold at the same time and the end-of-use products are collected simultaneously. Numerical experiments are conducted in order to confirm the profitability of the hybrid manufacturing/remanufacturing system. We analyze the price elasticity relationship between a change in the price and a change in the demand for remanufactured products. From the results, it can be concluded that the proposed hybrid manufacturing/remanufacturing model is more profitable.