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Comparing leasing and buying white goods for themanufacturer and consumer
RISE - Research Institutes of Sweden, ICT, Viktoria. INSEAD, France.
INSEAD, France.
INSEAD, France.
R&D Competence Centre Laundry Care, Slovenia.
2017 (English)Conference paper, Published paper (Refereed)
Abstract [en]

Remanufacturing, or other forms of recirculating products, can create opportunities forcompanies to become more sustainable while remaining profitable. However, not allcompanies will profit from a move towards a closed-loop business model and a thoroughassessment of the envisioned business models is therefore needed. This paper investigatesthe profitability of leasing and remanufacturing washing machines for a large white goodsproducer.An analytical model is built to simultaneously estimate the total cost of ownership(TCO) of consumers and costs and profit for the manufacturer. The results are comparedagainst the TCO and profitability of the linear system where high, medium and low endwashing machines are sold to the consumers. A sensitivity analysis is conducted onimportant factors such as repair, administration and transport costs.Using the replacement chain method, it was found that the TCO of low-end washingmachines in the sales system are significantly higher than for high-end washing machinesand consequently those consumers would benefit the most from a circular system in whichhigh-end washing machines are leased against acceptable prices. However, due toadditional costs for the manufacturer it remains challenging to make the same level of profitas in the linear system. The research shows important cost components which companieswill have to address when considering a move towards a circular business model that entailsleasing and remanufacturing.

Place, publisher, year, edition, pages
2017.
National Category
Computer and Information Sciences
Identifiers
URN: urn:nbn:se:ri:diva-33102OAI: oai:DiVA.org:ri-33102DiVA, id: diva2:1174700
Conference
ICoR 2017. 3rd International Conference on. Remanufacturing (ICoR-17) 24-26 October 2017 in Linköping, Sweden.
Available from: 2018-01-16 Created: 2018-01-16 Last updated: 2018-01-16Bibliographically approved

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  • apa
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  • en-US
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Output format
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