From Used to New: Committing to Product Refresh Services

In practice, we see examples of firms offering product refresh services across different industries. Refresh promote sustainable reuse and are distinct from typical refurbished-product sales which imply a change in ownership. This study is the first to use an analytic model derive optimal prices quantities for firm product-refresh tandem with new products. Using two-period framework, establish that can service align its second-period decisions overall profitability objective. We show by committing at pre-established price, enjoy higher selling period. Thus, find even if direct profit contribution refresh-service negative, it possible their impact on profits be positive. Therefore, managers must view holistically, considering indirect price effects, account full potential value.