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Lifecycle Pricing For Installed Base Management With Constrained Capacity And Remanufacturing, Andreas Robotis, Shantanu Bhattacharya, Luk N. Van Wassenhove

Research Collection Lee Kong Chian School Of Business

Installed base management is the policy in which the manufacturer leases the product to consumers, and bundles repair and maintenance services along with the product. In this article, we investigate for the optimal leasing price and leasing duration decisions by a monopolist when the production and servicing capacity are constrained. The effect of diffusion of consumers in the installed base is considered, with the ownership of the product resting with the monopolist during the product lifecycle. The monopolist operating the installed base jointly optimizes the profits from leasing the product/service bundle along with maintenance revenues and remanufacturing savings. We formulate …