Simulating second-hand product procurement in use-oriented PSS: The case of PC rentals

Use-oriented product-service systems (PSS) are a promising business model for advancing the circular economy (CE), but successfully incorporating second-hand products into such services remains challenging. Success depends on interrelated decisions about which products to procure (Procurement), to whom they are offered (Targeting), and at what price (Pricing). Existing evaluation methods, however, treat these decisions separately; they cannot capture their interactions and therefore fail to systematically evaluate effective strategies. To fill this gap, this study proposes a data-driven discrete-event and agent-based (DE–AB) hybrid simulation framework that integrates the three decisions (Procurement, Pricing, and Targeting) into a single model. The framework was applied to a case study of a business-to-business (B2B) PC rental service to verify its effectiveness. Results show that these decisions interact with one another and that integrated evaluation reveals effective strategies overlooked by separate evaluations. Specifically, a hybrid approach combining Targeting toward specific consumer segments with a flexible stock allocation (Upgrade) strategy for cost-conscious consumers simultaneously improved profitability and environmental performance by matching second-hand product conditions to consumer segments with higher acceptance of those conditions. Compared with the current baseline strategy, this strategy improved the profit margin by 6.57% while reducing Greenhouse Gas (GHG) emissions by 4.34%. This study contributes a simulation framework that enables integrated evaluation of the Procurement, Pricing, and Targeting decisions, together with their interactions, and offers practical insights for service providers designing second-hand product procurement strategies that simultaneously improve profitability and environmental performance.