The impact of customer returns on supply chain decisions under various channel interactions

Jing Chen () and Peter Bell ()

Annals of Operations Research, 2013, vol. 206, issue 1, 59-74

Abstract: We examine a supply chain in which a manufacturer supplies a single product to a retailer who faces two forms of customer returns. We compare the impact of these two forms of customer returns on the decisions and profits of the manufacturer and the retailer under various types of channel interaction: Manufacturer Stackelberg (MS), Vertical Nash (VN), and Retailer Stackelberg (RS). We find that when the level of customer returns that are proportional to quantity sold is extremely high, the retailer prefers the MS rather than the RS channel interaction. We also examine the impact of the asymmetric customer returns information on the decisions of the manufacturer and the retailer and on profits under MS and VN channel interactions. We show that in the MS case, the retailer can decide whether or not to share customer returns information with its manufacturer without knowing the manufacturer’s estimates of customer returns and in the VN case, both the retailer and the manufacturer can decide whether or not to share/acquire the information based on observation of the other’s behavior. The issues of sharing this information are also discussed. Copyright Springer Science+Business Media New York 2013

Keywords: Managing customer returns; Channel interaction; Information sharing (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10479-013-1326-3 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:206:y:2013:i:1:p:59-74:10.1007/s10479-013-1326-3

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-013-1326-3

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().