IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v129y2011i1p86-101.html
   My bibliography  Save this article

A Markov model of liquidity effects in reverse logistics processes: The effects of random volume and passage

Author

Listed:
  • Wilcox, William
  • Horvath, Philip A.
  • Griffis, Stanley E.
  • Autry, Chad W.

Abstract

Firms at various levels of the supply chain are implementing reverse logistics systems to maximize the value captured from products flowing backwards from customers to suppliers. However, due to the sporadic and unpredictable cash outflows associated with returns, firms must take care to avoid liquidity problems. Previous work addressing reverse logistics liquidity issues has considered long-term expectations, uncertainty, and shock potential inherent in the retail reverse logistics process, but the impact of the expected returns volumes and random return quantities within fixed-scale systems has yet to be explored. The current paper addresses these concerns.

Suggested Citation

  • Wilcox, William & Horvath, Philip A. & Griffis, Stanley E. & Autry, Chad W., 2011. "A Markov model of liquidity effects in reverse logistics processes: The effects of random volume and passage," International Journal of Production Economics, Elsevier, vol. 129(1), pages 86-101, January.
    • Handle: RePEc:eee:proeco:v:129:y:2011:i:1:p:86-101
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(10)00327-0
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dobos, Imre, 2003. "Optimal production-inventory strategies for a HMMS-type reverse logistics system," International Journal of Production Economics, Elsevier, vol. 81(1), pages 351-360, January.
    2. Gentry, James A & De La Garza, Jesus M, 1990. "Monitoring Accounts Payables," The Financial Review, Eastern Finance Association, vol. 25(4), pages 559-576, November.
    3. V. Daniel R. Guide , Jr. & Gilvan C. Souza & Luk N. Van Wassenhove & Joseph D. Blackburn, 2006. "Time Value of Commercial Product Returns," Management Science, INFORMS, vol. 52(8), pages 1200-1214, August.
    4. Anil K Kashyap & Owen A. Lamont & Jeremy C. Stein, 1994. "Credit Conditions and the Cyclical Behavior of Inventories," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 565-592.
    5. Daugherty, Patricia J. & Richey, R. Glenn & Genchev, Stefan E. & Chen, Haozhe, 2005. "Reverse logistics: superior performance through focused resource commitments to information technology," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(2), pages 77-92, March.
    6. Amini, M. Mehdi & Retzlaff-Roberts, Donna & Bienstock, Carol C., 2005. "Designing a reverse logistics operation for short cycle time repair services," International Journal of Production Economics, Elsevier, vol. 96(3), pages 367-380, June.
    7. Minner, Stefan, 2001. "Strategic safety stocks in reverse logistics supply chains," International Journal of Production Economics, Elsevier, vol. 71(1-3), pages 417-428, May.
    8. Badell, M. & Romero, J. & Puigjaner, L., 2005. "Optimal budget and cash flows during retrofitting periods in batch chemical process industries," International Journal of Production Economics, Elsevier, vol. 95(3), pages 359-372, March.
    9. Tribo, Josep A., 2007. "Ownership structure and inventory policy," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 213-220, July.
    10. Pirttila, Timo & Virolainen, Veli-Matti, 1992. "An overview of the state and problems of inventory management in Finland," International Journal of Production Economics, Elsevier, vol. 26(1-3), pages 217-220, February.
    11. Calomiris, Charles W. & Himmelberg, Charles P. & Wachtel, Paul, 1995. "Commercial paper, corporate finance, and the business cycle: a microeconomic perspective," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 42(1), pages 203-250, June.
    12. Heese, Hans S. & Cattani, Kyle & Ferrer, Geraldo & Gilland, Wendell & Roth, Aleda V., 2005. "Competitive advantage through take-back of used products," European Journal of Operational Research, Elsevier, vol. 164(1), pages 143-157, July.
    13. Robert E. Carpenter & Steven M. Fazzari & Bruce C. Petersen, 1998. "Financing Constraints And Inventory Investment: A Comparative Study With High-Frequency Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 513-519, November.
    14. Sodhi, ManMohan S. & Tang, Christopher S., 2009. "Modeling supply-chain planning under demand uncertainty using stochastic programming: A survey motivated by asset-liability management," International Journal of Production Economics, Elsevier, vol. 121(2), pages 728-738, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Govindan, Kannan & Soleimani, Hamed & Kannan, Devika, 2015. "Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future," European Journal of Operational Research, Elsevier, vol. 240(3), pages 603-626.
    2. García-Rodríguez, Francisco J. & Castilla-Gutiérrez, Carlos & Bustos-Flores, Carlos, 2013. "Implementation of reverse logistics as a sustainable tool for raw material purchasing in developing countries: The case of Venezuela," International Journal of Production Economics, Elsevier, vol. 141(2), pages 582-592.
    3. Agrawal, Saurabh & Singh, Rajesh K. & Murtaza, Qasim, 2015. "A literature review and perspectives in reverse logistics," Resources, Conservation & Recycling, Elsevier, vol. 97(C), pages 76-92.
    4. Sanni, S. & Jovanoski, Z. & Sidhu, H.S., 2020. "An economic order quantity model with reverse logistics program," Operations Research Perspectives, Elsevier, vol. 7(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tribo, Josep A., 2007. "Ownership structure and inventory policy," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 213-220, July.
    2. García-Rodríguez, Francisco J. & Castilla-Gutiérrez, Carlos & Bustos-Flores, Carlos, 2013. "Implementation of reverse logistics as a sustainable tool for raw material purchasing in developing countries: The case of Venezuela," International Journal of Production Economics, Elsevier, vol. 141(2), pages 582-592.
    3. Tribó, Josep A., 2009. "Firms' stock market flotation: Effects on inventory policy," International Journal of Production Economics, Elsevier, vol. 118(1), pages 10-18, March.
    4. Guariglia, Alessandra & Mateut, Simona, 2006. "Credit channel, trade credit channel, and inventory investment: Evidence from a panel of UK firms," Journal of Banking & Finance, Elsevier, vol. 30(10), pages 2835-2856, October.
    5. Simona Mateut, 2005. "Trade Credit and Monetary Policy Transmission," Journal of Economic Surveys, Wiley Blackwell, vol. 19(4), pages 655-670, September.
    6. Simon Gilchrist & Raphael Schoenle & Jae Sim & Egon Zakrajšek, 2017. "Inflation Dynamics during the Financial Crisis," American Economic Review, American Economic Association, vol. 107(3), pages 785-823, March.
    7. Guariglia, Alessandra, 2008. "Internal financial constraints, external financial constraints, and investment choice: Evidence from a panel of UK firms," Journal of Banking & Finance, Elsevier, vol. 32(9), pages 1795-1809, September.
    8. Pokharel, Shaligram & Mutha, Akshay, 2009. "Perspectives in reverse logistics: A review," Resources, Conservation & Recycling, Elsevier, vol. 53(4), pages 175-182.
    9. Claudia Custodio & Bernardo Mendes & Diogo Mendes, 2021. "Firm responses to violent conflicts," NOVAFRICA Working Paper Series wp2106, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    10. Paul Mizen & Cihan Yalcin, 2006. "Monetary Policy, Corporate Financial Composition and Real Activity," CESifo Economic Studies, CESifo Group, vol. 52(1), pages 177-213, March.
    11. Caggese, Andrea, 2007. "Testing financing constraints on firm investment using variable capital," Journal of Financial Economics, Elsevier, vol. 86(3), pages 683-723, December.
    12. Bustos, Emil, 2023. "The Effect of Financial Constraints on Inventory Holdings," Working Paper Series 1463, Research Institute of Industrial Economics.
    13. Rahman, Shams & Subramanian, Nachiappan, 2012. "Factors for implementing end-of-life computer recycling operations in reverse supply chains," International Journal of Production Economics, Elsevier, vol. 140(1), pages 239-248.
    14. Lou, Zhaohui & Xie, Qizhuo & Shen, Jim Huangnan & Lee, Chien-Chiang, 2024. "Does Supply Chain Finance (SCF) alleviate funding constraints of SMEs? Evidence from China," Research in International Business and Finance, Elsevier, vol. 67(PA).
    15. Zhang, Abraham & Wang, Jason X. & Farooque, Muhammad & Wang, Yulan & Choi, Tsan-Ming, 2021. "Multi-dimensional circular supply chain management: A comparative review of the state-of-the-art practices and research," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    16. Christopher F Baum & Mustafa Caglayan & Neslihan Ozkan, 2004. "The second moments matter: The response of bank lending behavior to macroeconomic uncertainty," Computing in Economics and Finance 2004 172, Society for Computational Economics.
    17. Muhammad Farid Alfarisy & Nopirin & Iswardono Sardjono Permono & Tri Widodo, 2011. "Balance sheet channel of monetary policy in Indonesian manufacturing firms," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 3(3), pages 225-233, April.
    18. Simon Gilchrist & Charles Himmelberg, 1999. "Investment: Fundamentals and Finance," NBER Chapters, in: NBER Macroeconomics Annual 1998, volume 13, pages 223-274, National Bureau of Economic Research, Inc.
    19. Caglayan, Mustafa & Maioli, Sara & Mateut, Simona, 2012. "Inventories, sales uncertainty, and financial strength," Journal of Banking & Finance, Elsevier, vol. 36(9), pages 2512-2521.
    20. Dinithi Ranasinghe, 2021. "Managerial entrenchment, financial constraints, and investment choice in unlisted firms," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 258-270, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:129:y:2011:i:1:p:86-101. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.