Supply Chain Coordination for False Failure Returns (ed.2)

False failure returns are products that are returned by consumers to retailers with no functional cosmetic defect. The cost of a false failure return includes the processing actions of testing, refurbishing if necessary, repackaging, the loss in value during the time the product spends in reverse supply chain (a time that can exceed several months for many firms), and the loss in revenue because the product is sold at a discounted price. This cost is significant, and is incurred primarily by the manufacturer. Reducing false failure returns, however, requires effort primarily by the retailer, for example informing consumers about the exact product that best fits their needs. We address the problem of reducing false failure returns via supply chain coordination methods. Specifically, we propose a target rebate contract that pays the retailer a specific dollar amount per each unit of false failure returns below a target. This target rebate provides an incentive to the retailer to increase her effort, thus decreasing the number of false failures and (potentially) increasing net sales. We show that this contract is Pareto–improving in the majority of cases. Our results also indicate that the profit improvement to both parties, and the supply chain, is substantial

Time Value of Commercial Product Returns

Once lightly regarded, the flow of product returns has become a significant concern for many manufacturers. For products, such as PCs, whose value deteriorates rapidly with time, the increasing rates of return from on-line sales have elevated the need for effective reverse supply chain designs. Products lose value in the return stream in two important ways: first, their value diminishes during time delays while awaiting evaluation, repair or refurbishing; second, losses can be incurred through erroneous disposition decisions due to incorrect assessments of the product’s value over time. Using field data for several consumer electronics products, we build analytical models to capture the economic value of a time-sensitive product over its life cycle and then use these models to develop supply chain designs that maximize value recovered from the return steam. We show that the returned product’s "time value" is a critical design parameter

Supply Chain Coordination for False Failure Returns (ed.1)

False failure returns are products that are returned by consumers to retailers with no functional or cosmetic defect. The cost of a false failure return includes the processing actions of testing, refurbishing if necessary, repackaging, the loss in value during the time the product spends in the reverse supply chain (a time that can exceed several months for many firms), and the loss in revenue because the product is sold at a discounted price. This cost is significant, and is incurred primarily by manufacturer. Reducing false failure returns, however, requires effort primarily by the retailer, for example informing consumers about the exact product that best fits their needs. We address the problem of reducing false failure returns via supply chain coordination methods. Specifically, we propose a target rebate contract that pays the retailer a specific dollar amount per each unit of false failure returns below a target. This target rebate provides an incentive to the retailer to increase her effort, thus decreasing the number of false failures and (potentially)increasing net sales. We show that this contract is Pareto-improving in the majority of cases. Our results also indicate that the profit improvement to both parties, and the supply chain, is substantial

Supply Chain Coordination for False Failure Returns (ed.2)

False failure returns are products that are returned by consumers to retailers with no functional cosmetic defect. The cost of a false failure return includes the processing actions of testing, refurbishing if necessary, repackaging, the loss in value during the time the product spends in reverse supply chain (a time that can exceed several months for many firms), and the loss in revenue because the product is sold at a discounted price. This cost is significant, and is incurred primarily by the manufacturer. Reducing false failure returns, however, requires effort primarily by the retailer, for example informing consumers about the exact product that best fits their needs. We address the problem of reducing false failure returns via supply chain coordination methods. Specifically, we propose a target rebate contract that pays the retailer a specific dollar amount per each unit of false failure returns below a target. This target rebate provides an incentive to the retailer to increase her effort, thus decreasing the number of false failures and (potentially) increasing net sales. We show that this contract is Pareto–improving in the majority of cases. Our results also indicate that the profit improvement to both parties, and the supply chain, is substantial

Matching Demand and Supply to Maximize Profits from Remanufacturing

The profitability of remanufacturing depends on the quantity and quality of product returns and on the demand for remanufactured products. The quantity and quality of product returns can be influenced by varying quality-dependent acquisition prices, i.e., by using product acquisition management. Demand can be influenced by varying the selling price. We develop a simple framework for determining the optimal prices and the corresponding profitability. We motivate and illustrate our framework using an application from the cellular telephone industry.Remanufacturing, Product Acquisition, Econometric Models

Logística reversa numa empresa de laminação de vidros: um estudo de caso Reverse logistics in a glass lamination industry: a case study

Este trabalho apresenta uma aplicação da Logística Reversa numa empresa multinacional que atua na área de laminação de vidros no Brasil. Na empresa estudada, a sucata gerada pelos seus clientes pode ser usada para realimentar o seu processo de produção. Inicialmente, são discutidos os principais aspectos relacionados ao tema, tais como, definição de Logística Reversa, ciclo de vida do produto, motivos e destinos do retorno, além dos fatores que influenciam a eficiência de um processo de Logística Reversa. A seguir, ilustradas pelo estudo de caso, são apresentadas e comentadas as etapas para uma implementação de um sistema de Logística Reversa ser bem sucedida. Finalmente, comentam-se as dificuldades, ganhos e vantagens competitivas obtidas por empresas que adotaram soluções da Logística Reversa, em particular na empresa em que o estudo de caso foi desenvolvido.<br>This paper introduces a Reverse Logistics application in a multinational plastic film industry in Brazil, where the waste generated by its customers can reload the production process. Firstly, the main features concerning the theme and the factors that influence an efficient process of Reverse Logistics are discussed. Afterwards, using a case study, the steps focusing on the implementation of Reverse Logistics, which were successful in a company, are introduced and discussed. Finally, the difficulties, gains and competitive advantages obtained by the companies that have adopted Reverse Logistic solutions, particularly the company where the case study was developed, are commented upon