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ABSTRACTCentering around anticipative and reactive capabilities of firms, accurate response is an important supply‐side strategy to deal with demand uncertainty. Clearly, the structure of the possible reaction will crucially influence the optimal anticipative decision making. In this article, we extend the existing literature in this area by including a new reactive capability, namely the utilization of refurbished consumer returns from early sales to react to demand later in the selling season. Because consumer returns depend on previous sales, there is also a direct link to the anticipative supply decision. We capture this effect in a newsvendor‐type model and provide both analytical and numerical insights into the optimal anticipative and reactive decisions as well as the value of refurbishing in terms of the retailer's expected profitability.

Reprocessing of used products is a growing field, with respect to both scientific and practical approaches. In this context, we present an in-depth case study dealing with the reverse logistics processes at Repair- and Service Center R.U.S.Z, an Austrian Work Integration Social Enterprise (WISE) located in Vienna, Austria. The main business segments of R.U.S.Z are reprocessing, repairing, and servicing of (used) products and repair services. The reverse logistics activities include relevant processes like acquisition, testing and grading, and disposition/reprocessing of used goods. Based upon the case study, we present the gained insights and furthermore identify research opportunities. Our main findings are: (1) the reverse logistics activities of this non-profit-organization are equivalent compared with the profit-driven approaches used in literature; (2) the business of R.U.S.Z is not solely profit- or cost-driven but the company is based on the triple bottom line and pursues environmental and social goals, too; (3) in spite of legislation aiming at the reuse of used products, there is lack of collaboration between manufacturers and reprocessors.

Abstract Reprocessing of used products is a growing field, with respect to both scientific and practical approaches. In this context, we present an in-depth case study dealing with the reverse logistics processes at Repair- and Service Center R.U.S.Z, an Austrian Work Integration Social Enterprise (WISE) located in Vienna, Austria. The main business segments of R.U.S.Z are reprocessing, repairing, and servicing of (used) products and repair services. The reverse logistics activities include relevant processes like acquisition, testing and grading, and disposition/reprocessing of used goods. Based upon the case study, we present the gained insights and furthermore identify research opportunities. Our main findings are: (1) the reverse logistics activities of this non-profit-organization are equivalent compared with the profit-driven approaches used in literature; (2) the business of R.U.S.Z is not solely profit- or cost-driven but the company is based on the triple bottom line and pursues environmental and social goals, too; (3) in spite of legislation aiming at the reuse of used products, there is lack of collaboration between manufacturers and reprocessors.

AbstractServitizing business models can provide economic benefits in a supply chain by utilizing products more efficiently. However, the transfer of the burden to keep the product operable from the user to the servitizing provider may cause issues. As a result of no longer owning the product, a user may be less inclined to taking care of it thereby increasing the maintenance effort for the servitizing provider. This may induce additional financial stress on the latter, specifically if it is a small company with lack of budget to begin with. In this study we analyze whether direct finance within a supply chain, where the user lends money to the servitizing provider, can alleviate this problem, when compared with a more traditional bank finance option. We find that improved access to finance indeed enables the servitizing provider to induce high effort by the user through lower servitizing fees. This also makes the servitizing model economically more attractive for both firms involved. Besides those economic implications, direct finance increases consumer demand and surplus, while at the same time resource consumption for satisfying this increased demand increases.

Repair is a central component of a circular economy to extend the operational phase of products. Yet, the number of repair service providers as well as demand for repair have declined over the last decades, while more products than ever before were sold. Thus, for a successful transition from a linear to a circular economy the demand for repair services must be boosted to promote repair business. A starting point to achieve this goal is to increase knowledge about the end consumers' intention whether to repair broken products or not. An extensive literature research revealed a comprehensive set of drivers of the repair intention covering aspects related to environmental protection, social acceptance, and economic considerations as well as socio-demographic variables, past behaviour, and perceived repair difficulty. Those factors are not only relevant for a specific product category but for repairs of consumer goods in general. The aim is to evaluate the relevance of those drivers for three different repair intentions: (1) to make use of repair service providers, (2) to self-repair broken items, and (3) to use repair service providers incorporated in a repair network. A quantitative online survey was designed, and distributed in Styria, Austria. By means of a structural equation model the acquired data of 900 respondents was analysed. The results emphasise the trade-off between acting environmentally-friendly and economic aspects like repair cost and time, but also highlight the effect of government intervention – in the form of setting up a network and financial support for repair – on shaping this trade-off. Furthermore, past behaviour is found to strongly drive repair intention. Our research contributes to scientific literature by shedding light on the influence of diverse drivers on different repair intentions. It is also relevant for supporting repair companies' decision making with respect to repair service design, as well as public authorities interested in promoting repair.

Introducing proprietary parts to gain a competitive edge is a well-known, yet poorly understood strategy original equipment manufacturers (OEMs) adopt. In this paper, we consider an OEM which sells new products and competes with an independent remanufacturer (IR) selling remanufactured products. The OEM considers using proprietary parts to manage the secondary market for remanufactured products. Thereby, the OEM designs its product to balance the trade-off between the cost of proprietariness and the extra income from selling the proprietary parts to the IR. We observe that the OEM always chooses the smallest possible proportion of proprietary parts. This allows it to control the secondary market without the need to overly adjust the price charged for new products. Deterring market entry by the IR by pricing the proprietary parts prohibitively, an OEM strategy observed in several industries, is only optimal when the willingness-to-pay for remanufactured products is low. Otherwise, the OEM benefits more from sharing the secondary market profits with the IR through the use of proprietary parts. Finally, we find that the OEM can also use proprietary parts to strategically deter entry by the IR and discourage it from collecting the cores. This can support the OEM's decision to engage in remanufacturing even in the case of a collection cost disadvantage. We show that – counterintuitively – the OEM may take up remanufacturing in situations where the IR would not. While the introduction of proprietary parts is detrimental to both IRs and consumers, OEM remanufacturing softens this loss for the consumers.

We study the competition between two remanufacturers in the acquisition of used products and the sales of remanufactured products. One firm has a market advantage; we consider two separate cases where either firm could have an acquisition advantage. The problem is formulated as a simultaneous game on a market that is vertically differentiated in both acquisition and sales, where both firms decide on their respective acquisition prices for used products, and selling prices for remanufactured products. A key finding is that a market advantage is significantly more powerful than an acquisition advantage. The firm with a market advantage can preempt the entry of the other firm, even if that firm has a significant acquisition advantage, but not the other way around. This is accomplished through an aggressive acquisition strategy, where the firm with a market advantage sets significantly higher acquisition prices.

Repair is an essential part of the transition towards a circular economy by recovering full functionality of faulty products or components, and thus, extending the product usage phase. This is seen as a core strategy to obtain desired environmental impact like waste reduction and resource conservation. Beyond that, repair services also affect societal and economic aspects like the number of local jobs. To realize the potential, supply with as well as demand for repair services has to be ensured. In this study we report on how the city of Graz, Austria deals with challenges related to this by introducing a public funding scheme for repair services to increase demand, and funding and organizing a repair network to strengthen the suppliers. By means of a case study, we explore success factors and critical aspects related to setting up a repair network, and provide insights into the interplay of a financial incentive scheme for promoting repair. Key findings show that: (1) having the local government as the network organizer facilitates the integration of multiple sectors but might jeopardize the network's sustainability due to political reasons; (2) the interplay between public funding and the repair network is effective, but network heterogeneity induces risk; (3) cooperation within the network can improve price and service quality and thus, affect customer demand, but lacking awareness of repair in general and the repair network constrains demand. These insights and the related discussion result in the identification of future research opportunities and related questions.