Title: Determining the optimal collection period for returned products in a stochastic environment

Authors: Nizar Zaarour; Emanuel Melachrinoudis; Shashank Kapadia; Hokey Min

Addresses: Supply Chain and Information Management, D'Amore-McKim School of Business, Northeastern University, 360 Huntington Avenue, Boston, MA 02115, USA ' Department of Mechanical and Industrial Engineering, Northeastern University, Boston, MA 02115, USA ' Department of Mechanical and Industrial Engineering, Northeastern University, Boston, MA 02115, USA ' Department of Management, College of Business Administration, Bowling Green State University, Bowling Green, OH 43404, USA

Abstract: As the customer centricity has become a norm for today's business practices, a growing number of firms adopted liberal product return policies. Such policies, however, can backfire due to their costly operations and unpredictability associated with product returns. To minimise the adverse impact of product returns on the firm's bottom line and enhance customer satisfaction with hassle-free handling of product returns processes, we develop and propose a mathematical model that determines the optimal collection period at an initial collection point (ICP) before transshipping the returned products to a centralised return centre (CRC) while taking into account the uncertain rate of returns for these products. To reflect the complexity and uncertainty of the product return processes, we formulate a general model for daily returns following a discrete probability distribution and analyse the case for Poisson distribution.

Keywords: stochastic; product returns; collection time period; close-loop supply chain.

DOI: 10.1504/IJLSM.2019.099660

International Journal of Logistics Systems and Management, 2019 Vol.33 No.1, pp.42 - 58

Received: 18 May 2017
Accepted: 13 Sep 2017
Published online: 20 May 2019 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article