Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
The role of second-hand markets in circular business: a simple model for leasing versus selling consumer products
RISE - Research Institutes of Sweden, ICT, Viktoria. INSEAD, France.
INSEAD, France.
INSEAD, France.
2018 (English)In: International Journal of Production Research, ISSN 0020-7543, E-ISSN 1366-588X, Vol. 56, no 1-2, p. 960-973Article in journal (Refereed) Published
Abstract [en]

This paper explores the role of the second-hand market when transitioning to a closed-loop system where products are leased multiple times. The total cost of ownership for consumers and profitability for manufacturers are compared in circular and linear business cases. We find that while second-hand markets were beneficial for manufacturers of durable goods in a linear system, since they increased the consumers’ willingness-to-pay for new products, the same second-hand markets might restrict the profitability of a closed-loop business model. A high resale value results in a relatively low cost of ownership in the sales system and additional activities in the closed-loop model (such as managing the lease contracts and refurbishment) add significant costs to the supply chain. Consequently, the economic (and environmental) benefits of leasing products already traded on second-hand markets in the linear system are often limited. Our simple analytical model allows a quick and dirty analysis of multiple scenarios with a minimum of inputs. We argue that manufacturers lack these kinds of models to guide them in navigating circular economy business models.

Place, publisher, year, edition, pages
2018. Vol. 56, no 1-2, p. 960-973
Keywords [en]
circular economy, closed-loop supply chains, profitability, remanufacturing, total cost of ownership, Closed loop systems, Consumer products, Costs, Economics, Linear systems, Manufacture, Sales, Supply chains, Business modeling, Closed loop models, Closed-loop supply chain, Second-hand markets, Willingness to pay, Commerce
National Category
Computer and Information Sciences
Identifiers
URN: urn:nbn:se:ri:diva-32807DOI: 10.1080/00207543.2017.1398429Scopus ID: 2-s2.0-85033385252OAI: oai:DiVA.org:ri-32807DiVA, id: diva2:1161793
Available from: 2017-12-01 Created: 2017-12-01 Last updated: 2018-05-04Bibliographically approved

Open Access in DiVA

No full text in DiVA

Other links

Publisher's full textScopus
By organisation
Viktoria
In the same journal
International Journal of Production Research
Computer and Information Sciences

Search outside of DiVA

GoogleGoogle Scholar

doi
urn-nbn

Altmetric score

doi
urn-nbn
Total: 23 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
v. 2.35.4