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On the effect of upgradable products design on circular economy

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  • Zikopoulos, Christos

Abstract

In the current paper, we develop a quantitative model that examines the impact of upgradable product design on each of the three pillars of sustainability as well as on newly manufactured and remanufactured products' sales. Our model takes into consideration technological innovation, as well as the positioning of heterogeneous consumers towards alternative types, versions and prices of products and related social and cultural issues. Our analysis examines three alternative system settings and it is conducted in two stages; first, we evaluate the quantities of product types and versions available in the market and sequentially, we configure and compare sustainability indices for the alternative systems. Our findings verify that remanufacturing provides improved social, environmental and financial performance compared to the case where only manufacturing is allowed. Product update also outperforms manufacturing, but when compared to remanufacturing it is not always preferable. Interestingly, we find that under some circumstances the system with product update results in the best overall financial performance. Therefore, there can be enough motivation for manufacturers to engage in product update, without necessitating government intervention. This financial motive can be helpful in aligning R&D objectives with Circular Economy principles and in promoting sustainability and Circular Economy in general.

Suggested Citation

  • Zikopoulos, Christos, 2022. "On the effect of upgradable products design on circular economy," International Journal of Production Economics, Elsevier, vol. 254(C).
    • Handle: RePEc:eee:proeco:v:254:y:2022:i:c:s0925527322002110
    DOI: 10.1016/j.ijpe.2022.108629
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    References listed on IDEAS

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    2. Chowdhury, Sayan & Verma, Nishant K., 2024. "Walking a tightrope: Impact of adopting voluntary right-to-repair policy on firm profit and consumer welfare," International Journal of Production Economics, Elsevier, vol. 272(C).

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