Browsing by Subject "Marketing-operations interface"

Now showing 1 - 3 of 3

Open Access
Diffusion control of successive product generations with recycling potential
(2021-06) Uzunlar, Nilsu
In this thesis, we study the sales planning problem of a producer who sells two successive generations of a durable good with recycling potential. Certain ex-pensive materials can be recovered from consumer returns of the early-generation product and can be used in manufacturing of the new-generation product. De-mands for the successive product generations arrive as a generalized Norton-Bass diﬀusion process and the recycling operations for the new-generation product are constrained by the early-generation product returns. In this setting, we inves-tigate whether slowing down the new-generation product diﬀusion by partially satisfying its demand might be proﬁtable for the producer who aims to maximize its total proﬁt from the entire product line. Such manipulation of the diﬀusion process may improve the use of recycled content in production as well as the cross-generation repeat purchases over a suﬃciently long selling horizon. The optimal sales plan involves partial demand fulﬁllment when the diﬀusion curves of the early- and new-generation products overlap substantially and the release of the new-generation product only moderately increases the customer base. How-ever, partial demand fulﬁllment is less likely to be desirable if the product returns mostly arrive through trade-up programs rather than recycling programs such as free mail-back and physical drop-oﬀ options oﬀered to consumers. Finally, partial demand fulﬁllment, if initiated too late, may escalate the overall consumption of virgin raw materials, making it environmentally undesirable.
Open Access
New product diffusion in closed-loop supply chains
(2017-02) Kaya, Barış Emre
In this thesis, we develop a dynamic model for sales planning of a manufacturer who sells new and remanufactured versions of a product. Demand arrives over a finite life cycle according to the slightly modified Bass diffusion process. End-ofuse product returns required for remanufacturing are constrained by the earlier sales. In this setting the manufacturer may simultaneously improve its economic and environmental performance by partially satisfying the initial demand. This can indeed occur when innovators contribute more heavily than imitators to the diffusion process, remanufacturing has a significantly large profit margin, or an unmet demand is very likely to be backlogged to be satisfied with a remanufactured product. But a very large backlogging rate may in ate the future demand if the initial sales volume is low, making it difficult to ensure a sufficient returns volume for remanufacturing. The manufacturer thus sells more under a very large backlogging rate, and a poorer environmental performance results. The optimal sales plans also differ across product types: The manufacturer of a search good has the advantage of keeping the future demand intact regardless of the initial sales, compared to the manufacturer of an experience good. Partially satisfying the demand can thus be desirable for search goods under a greater number of imitators, a lower margin from remanufacturing, or a lower backlogging rate. However, if partially satisfying the demand is desirable for both product types, the manufacturer of a search good sells more to enable a sufficient returns volume for the larger future demand.
Open Access
New-product diffusion in closed-loop supply chains
(INFORMS, 2021) Nadar, Emre; Kaya, B. E.; Güler, K.
Problem definition: We study the sales planning problem of a producer who sells new and remanufactured versions of a durable good over a finite life cycle. We investigate whether slowing down product diffusion by choosing to partially satisfy demand might be profitable for the producer. Academic/practical relevance: We provide new insights into sales management in closed-loop supply chains by uncovering the role key market characteristics play in profitability of partial demand fulfillment as well as its optimal timing and magnitude. Methodology: We develop a dynamic model in which demand arrives as a slightly modified Bass diffusion process, and end-of-use products required for remanufacturing are constrained by earlier sales. Results: The optimal sales plan involves partial demand fulfillment when the product diffusion rate is high, the profit margin from remanufacturing is large, and the remanufactured item is in limited demand. Partial demand fulfillment extends to earlier stages of the life cycle as the diffusion rate grows, the demand for remanufactured items shrinks, or the number of consumers who return their end-of-use items increases. It is profitable to backlog more customers when the word-of-mouth effect dominates the diffusion process or when the demand for remanufactured items is lower. Finally, the benefit of delaying product diffusion tends to increase with diffusion rate. Managerial implications: Our findings suggest that deliberately backlogging some customers may be an effective lever (in the absence of flexibility to dynamically adjust prices) for durable-good producers in fast-clockspeed industries to improve their total profits from the jointly optimized sales of new and remanufactured items.