Supporting sustainable product service systems: A product selling and leasing design model

Abstract Prior studies are lacking on a combined product selling and leasing model design and absent on the life cycle cost analysis and the product design model. To address these shortcomings, this study analyzes a leasing model on the profit and cost variables in comparison to a selling model to evaluate a proposed sustainable product-service system. The trade-off is the cost of additional durability and residual value of the product at end of the lease period. To increase the performance of sustainable supply chain management, this study is essential to comply with customer requirements and to align the product design and to track both product design integration and life-cycle cost analysis when developing an analytical model to effectively implement the sustainable product service system. Multiple regression is utilized to screen the variables that influence both product design and the firm’s profits. A heat-pump water heater case study is conducted and analyzed using the proposed method to generate product selling and leasing model design suggestions that facilitate sustainable product-service systems servitization with development considerations. The method proposed in this study could be a reference decision making model for different business model based on different decision strategies.

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