Remanufacturing in developing countries concentrated at leasing or selling - a case study of Indonesia

This paper presents models for remanufacturing that are applicable in both developed and developing countries. The evaluation function is the total life cycle cost of the product and the scenario considered is product take-back for remanufacturing in leasing or selling conditions. Uncertainty in return of products is incorporated in the model for selling. The model further incorporates a repairing system that is available at low cost in most of the developing countries. In order to reflect the customer behavior towards remanufactured products, the demand for old and new products is considered separately. Simulation has been carried out based on the model and the behavior of the decision related to leasing or selling has been discussed. It has been found that with high demand of old products, common in developing countries, leasing becomes more cost effective than selling.