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Inventory control with product returns: the impact of (mis)information

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  • de Brito, M.P.
  • van der Laan, E.A.

Abstract

Product returns are often characterized by a dual uncertainty on time and quantity. In the literature on inventory management with product returns, best forecasts have been associated with methods that use the most informationregarding product return history. In practice however, data is often scarce and unreliable. In this paper we investigate the impact of (mis)information on inventory performance. An exact analysis shows that in case of misestimation the most informed method does not necessarily lead to best performance. Further we provide an extensive simulation study to investigate the impact of misinformation w.r.t. inventory costs.This has relevant implications regarding the investments to make on product return information systems.

Suggested Citation

  • de Brito, M.P. & van der Laan, E.A., 2002. "Inventory control with product returns: the impact of (mis)information," Econometric Institute Research Papers EI 2002-29, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    • Handle: RePEc:ems:eureir:554
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    References listed on IDEAS

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    1. de Brito, M.P. & Dekker, R., 2002. "Reverse logistics - a framework," Econometric Institute Research Papers EI 2002-38, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    2. de Brito, M.P. & Flapper, S.D.P. & Dekker, R., 2002. "Reverse logistics," Econometric Institute Research Papers EI 2002-21, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    3. Mostard, J. & Teunter, R.H., 2002. "The Newsboy Problem with Resalable Returns," ERIM Report Series Research in Management ERS-2002-89-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
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    1. de Brito, M.P. & van der Laan, E.A., 2003. "Inventory Management with product returns: the value of information," ERIM Report Series Research in Management ERS-2003-060-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    2. Marisa P. Brito & Rommert Dekker & Simme Douwe P. Flapper, 2005. "Reverse Logistics: A Review of Case Studies," Lecture Notes in Economics and Mathematical Systems, in: Bernhard Fleischmann & Andreas Klose (ed.), Distribution Logistics, pages 243-281, Springer.
    3. Ketzenberg, M.E. & van der Laan, E.A. & Teunter, R.H., 2004. "The Value of Information in Reverse Logistics," ERIM Report Series Research in Management ERS-2004-053-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    4. Toktay, B. & van der Laan, E.A. & de Brito, M.P., 2003. "Managing Product Returns: The Role of Forecasting," ERIM Report Series Research in Management ERS-2003-023-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

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