The impact of customer returns in a supply chain with a common retailer

Hui, Yang; Chen, Jing; Chen, Xu; Chen, Bintong

doi:10.1016/j.ejor.2016.06.011

Cited by 76 publications

(33 citation statements)

References 44 publications

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“…One set of papers on consumer returns considers money-back guarantees or very lenient (very small fees for returning items) return policies in retailing. Pinçe et al (2016), Yang et al (2017), Li et al (2012), Chen and Chen (2016) consider various aspect of consumer returns, from optimal pricing and order quantities to selecting clearing channels for returned goods, some even considering competition from other retailers. The main difference between the papers in retail return policies and that presented here is that in our paper, not all consumers are allowed to return an item.…”

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confidence: 99%

“…Valuation uncertainty is used to describe the idea that consumers do not know their true value of a product until they have a chance to experience the product. Various researchers argue that offering returns increases the market size for a product when consumers have valuation uncertainty by giving such consumers the option of partially, or fully, recouping their purchase costs (Akçay et al 2013, Yang et al 2017, Altug and Aydinliyim 2016, Su 2009. In our paper we do not consider valuation uncertainty, we assume that each consumer will value the product the amount each initially prescribes to the product.…”

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confidence: 99%

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Optimal inventory decisions when offering layaway

Dimitrov

Ceryan

2018

International Journal of Production Research

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This paper presents an inventory management policy for a retailer offering a layaway program. Layaway is a service provided by retailers that allows budget constrained consumers who have sufficiently high valuations to pay for a product in several installments rather than at once and obtain the product that has been reserved for them at the end of the payment period. If a consumer defaults on payments, then the reserved item is released back into store inventory. In this paper, we first determine the retailer's optimal order decisions when layaway is offered. We find that the order quantity under a layaway program decreases with the likelihood of consumers not finishing their layaway plans and that it is not always profitable for a retailer to offer a layaway program. We then identify the market conditions under which the retailer would benefit from a layaway program. Lastly, we consider an extension to capture the influence of the timing of consumer defaults.

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confidence: 99%

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confidence: 99%

Optimal inventory decisions when offering layaway

Dimitrov

Ceryan

2018

International Journal of Production Research

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“…For example, such a situation can occur if the product is no longer needed by the time the product is received. Using this approach, Hess, Chu, and Gerstner (), Chu, Gerstner, and Hess (), and Ülkü, Dailey, and Yayla‐Küllü () assume that product valuation follows a general uniform distribution, whereas Chen and Bell (), McWilliams (), Chen and Chen (), Chen and Chen (), and Yang, Chen, Chen, and Chen () assume a standard uniform distribution.…”

Section: Analytical Researchmentioning

confidence: 99%

“…Research addressing product assortment considers how the assortment decision is affected by the return policy decision and vice‐versa. We are, however, aware of only four such contributions (Alptekinoğlu & Grasas, ; Shulman et al, , ; Yang et al, ). Note that the key findings of the most recent contribution are already discussed in the context of scope leniency in Section 4.2.4.…”

Section: Analytical Researchmentioning

confidence: 99%

Taking stock of consumer returns: A review and classification of the literature

Abdulla

Ketzenberg

Abbey

2019

J of Ops Management

101

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Coincident with the rapid growth of consumer returns and their corresponding importance in the retail marketplace, academic interest in the area of consumer return policy design has significantly increased. In fact, the growth in academic publications has been tremendous, with almost half of the published works appearing within the past 6 years. The influx of new and evolving research spans across multiple disciplines and various methodologies. To provide clarity for the continued evolution of the field, we provide a comprehensive review and classification of the literature predicated on a holistic conceptual framework. The scope of the review includes all peer reviewed journal articles published prior to the end of 2018, along with any working papers cited therefrom, that specifically address (a) managerial decision‐making related to return policies or (b) consumer behavior in response to such decision‐making. Examining the state of the literature and practice on return policy design through the lens of a unified conceptual framework—a framework that spans both analytical and empirical research—reveals numerous managerial and theoretical opportunities for future research.

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“…Yang et al. () studied the impact of customer returns in a manufacturer Stackelberg supply chain in which a retailer can sell either or both of two brands, a well‐known brand and a new brand, in a market supplied by two manufacturers. The customer's choice depended on the customer's valuation, which followed a uniform distribution over [0, 1] and other factors.…”

Section: Literature Reviewmentioning

confidence: 99%

Pricing decisions in a multiechelon supply chain under a bundling strategy

Eghbali-Zarch

Taleizadeh

Tavakkoli–Moghaddam

2019

Int Trans Operational Res

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Product pure bundling is an effective marketing strategy in real successful businesses, which has been extensively discussed in the economics and marketing areas. While investigating the theoretical and empirical aspects of operational and supply chain implications of pure bundling is essential, this paper determines the optimal pricing decisions in a centralized three‐level supply chain that consists of multiple raw material suppliers, a manufacturer and a retailer, and analyzes the impact of raw material suppliers and manufacturer operations and market characteristics on selecting the best pricing strategy. A general supply chain structure is considered, in which the manufacturer receives different raw materials from the suppliers, produces two different products, and then sells them separately, called no bundling strategy, and sells two products in a package, called pure bundling strategy, with uniformly distributed customer valuations. The proposed model finds the optimal pricing decisions of the mentioned supply chain under pure and no bundling strategies and derives the closed‐form solutions to explore the impact of each strategy on the performance of the chain due to its profit. Computational results and sensitivity analysis explain how pure bundling can be utilized as an operational strategy to improve the integrated supply chain profit through a case study. Accordingly, the final results indicate that small market size, low costs, and small amounts of required raw materials, bundling basic products with the premium ones makes the pure bundling strategy profitable even when the cost of the packages is more than the sum of the costs of two products.

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The impact of customer returns in a supply chain with a common retailer

Cited by 76 publications

References 44 publications

Optimal inventory decisions when offering layaway

Optimal inventory decisions when offering layaway

Taking stock of consumer returns: A review and classification of the literature

Pricing decisions in a multiechelon supply chain under a bundling strategy

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