SCM 470 Exam 1 Verified Solutions
atasu 2010 [1]: What do the authors note is a common belief that sales and marketing managers have
about the effect of remanufactured products on sales and profits? Why do they hold this belief?
Remanufacturing reduces profits because remanufactured products ...
atasu 2010 ✅[1]: What do the authors note is a common belief that sales and marketing managers have
about the effect of remanufactured products on sales and profits? Why do they hold this belief?
Remanufacturing reduces profits because remanufactured products cannibalize sales of new products.
Source of this justification: "gut feelings", "assumptions", "it is known".
[2]: What is a canonical example of a perfect substitute in a remanufactured product setting? In perfect
substitute settings, why would firms prefer remanufacturing?
Disposable cameras.
High end capital goods (especially military equipment). Owner of remanufactured item stays the same,
but the product is continually improved.
a. M1 Abrams battle tanks
b. B-52 bombers used by the USAF
c. Commercial aircraft
[3]: What are some strategic reasons for companies to offer remanufactured versions of their products?
Target cost-conscious consumers who won't pay full price.
Protect brand image because 3rd parties will remanufacture your product if there is a market for it and
could hurt your brand.
Prevent low-cost rivals from poaching existing customers.
Prevent intellectual property loss via 3rd parties.
Reduce environmental impact.
[4]: What part of the entire process of developing a supply chain for remanufactured products is most
distinct from the supply chain for new products? Why is this the case?
, "Sourcing" of material: for forward supply chain, just buy from vendors. For remanufacturing, we need
to obtain existing product which creates uncertainty regarding time of returns [leasing can reduce some
uncertainty] and condition of those returns.
[5]: What role can product development play in a company's remanufacturing strategy?
Make the product easy to disassemble.
[6]: Why is production planning, staffing, training, etc. more complex in a remanufacturing setti
blackburn 2004 ✅1. What is the product characteristic that is the most influential in shaping the design
of the reverse supply chain and why is this characteristic so important?
Marginal value of time (MVT): the rate a product decreases in value as it spends more time in the return
process.
High MVT: consumer electronics [technological obsolescence]; fashion [consumer tastes change]
Low MVT: power tools, disposable cameras
2. What are the five stages of product returns? Explain each one
1. Product Acquisition: product returned by the consumer, or leases expire (leasing cars)
2. Reverse Logistics: relocate (transport) product further upstream
3. Inspection and Disposition: decision about what to do with the item (sell as is; sell as is but in a new
box; remanufacture and resell at a discount; remanufacture and keep for warranty support; scrap
[salvage pieces of value and dispose of rest]; throw away/recycle directly)
4. Remanufacturing
5. Marketing: figure out distribution channels and price points for returned items
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