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The impact of sharing customer returns information in a supply chain with and without a buyback policy

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  • Chen, Jing

Abstract

In this paper, we examine a single period problem in a supply chain in which a Stackelberg manufacturer supplies a product to a retailer who faces customer returns and demand uncertainty. We show that the manufacturer incurs a significant profit loss with and without a buyback policy if it fails to account for customer returns in the wholesale price decision. Under the assumption that the retailer is better informed than the manufacturer on customer returns information, we show that without a buyback policy, the retailer prefers not to share if the manufacturer overestimates while it prefers to share customer returns information if the manufacturer underestimates this information. If the manufacturer offers a buyback policy, we have the opposite results. We also discuss incentives to share the customer returns information and some of the issues that are raised in sharing this information.

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  • Chen, Jing, 2011. "The impact of sharing customer returns information in a supply chain with and without a buyback policy," European Journal of Operational Research, Elsevier, vol. 213(3), pages 478-488, September.
    • Handle: RePEc:eee:ejores:v:213:y:2011:i:3:p:478-488
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    6. Sun, Zhengwei & Hupman, Andrea C. & Abbas, Ali E., 2021. "The value of information for price dependent demand," European Journal of Operational Research, Elsevier, vol. 288(2), pages 511-522.
    7. Pietro Giovanni & Georges Zaccour, 2019. "A selective survey of game-theoretic models of closed-loop supply chains," 4OR, Springer, vol. 17(1), pages 1-44, March.
    8. Ilkka Ritola & Harold Krikke & Marjolein C.J. Caniëls, 2020. "Learning from Returned Products in a Closed Loop Supply Chain: A Systematic Literature Review," Logistics, MDPI, vol. 4(2), pages 1-13, April.
    9. Gaidi Tian & Chunfa Li, 2023. "How Can We Promote Smartphone Leasing via a Buyback Program?," Sustainability, MDPI, vol. 15(14), pages 1-29, July.
    10. Wen, Xin & Choi, Tsan-Ming & Chung, Sai-Ho, 2019. "Fashion retail supply chain management: A review of operational models," International Journal of Production Economics, Elsevier, vol. 207(C), pages 34-55.
    11. Zhang, Qiao & Chen, Jing & Chen, Bintong, 2021. "Information strategy in a supply chain under asymmetric customer returns information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    12. Ali, Mohammad M. & Babai, Mohamed Zied & Boylan, John E. & Syntetos, A.A., 2017. "Supply chain forecasting when information is not shared," European Journal of Operational Research, Elsevier, vol. 260(3), pages 984-994.
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    15. Duong, Quang Huy & Zhou, Li & Meng, Meng & Nguyen, Truong Van & Ieromonachou, Petros & Nguyen, Duy Tiep, 2022. "Understanding product returns: A systematic literature review using machine learning and bibliometric analysis," International Journal of Production Economics, Elsevier, vol. 243(C).
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