Please use this identifier to cite or link to this item: https://doi.org/10.1016/j.ijpe.2006.11.020
Title: The implications of pooled returns policies
Authors: Brown, A.
Chou, M.C. 
Tang, C.S.
Keywords: Multi-product pooled returns policies
Returns policies
Stochastic inventory models
Issue Date: 2008
Source: Brown, A., Chou, M.C., Tang, C.S. (2008). The implications of pooled returns policies. International Journal of Production Economics 111 (1) : 129-146. ScholarBank@NUS Repository. https://doi.org/10.1016/j.ijpe.2006.11.020
Abstract: When selling products with highly uncertain demands and short life cycles, it is common for a manufacturer to offer some form of returns policy to entice the distributors to increase their order quantities. In this paper we consider a multi-item returns policy called "pooled" (or joint) returns policy under which the distributor can return any combination of the products up to R percent of the total purchases across all products. We analyze the distributor's optimal profit and order quantity under the pooled returns policy, and compare these operating characteristics to the case when a single-item "non-pooled" returns policy is instituted. Under the non-pooled returns policy, the distributor can only return on individual items using item-specific return limits. We show an intuitive result that the distributor will always achieve a higher profit under the pooled policy. However, the manufacturer could actually obtain a lower profit under the pooled policy due to a counter-intuitive result: the distributor may order less under the pooled policy even though the pooled policy offers more flexibility. This counter-intuitive result motivates us to determine the conditions under which the distributor would order less under the pooled policy. Finally, we develop a heuristic for determining the distributor's optimal order quantities associated with the n-product case under the pooled policy. © 2007 Elsevier B.V. All rights reserved.
Source Title: International Journal of Production Economics
URI: http://scholarbank.nus.edu.sg/handle/10635/44081
ISSN: 09255273
DOI: 10.1016/j.ijpe.2006.11.020
Appears in Collections:Staff Publications

Show full item record
Files in This Item:
There are no files associated with this item.

SCOPUSTM   
Citations

8
checked on Dec 13, 2017

WEB OF SCIENCETM
Citations

7
checked on Nov 16, 2017

Page view(s)

54
checked on Dec 10, 2017

Google ScholarTM

Check

Altmetric


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.