Optimal product replacement: The dark sides of technological progress and the circular economy

Abstract

The intersection of the circular economy and technological obsolescence is pivotal for understanding sustainable consumption and innovation’s impacts on product lifecycle management. Prevailing literature emphasizes producer-driven obsolescence and often overlooks the consumer’s role in product replacement decisions, particularly in a circular economic context. This study bridges this gap by exploring consumer-driven economic obsolescence and the resulting implications for product longevity and replacement strategies. Employing a composite methodology that integrates economic modeling with net present value analysis, this article investigates the timing of optimal product replacement from the consumer perspective. It challenges the conventional minimum cost per unit time methods by introducing a profit-equating replacement strategy tailored to circular economy principles. Key findings reveal a paradoxical dynamic wherein increased technological advancement can inversely affect optimal replacement timing, underscoring a consumer-centric view of obsolescence. Conclusively, this research refines our understanding of obsolescence by reconstructing its economic rationale within the circular economy, thus offering nuanced insights for sustainable product lifecycle management and policy-making.