EURO 2024 Copenhagen
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3337. Inventory Management for an Omnichannel Retailer under Product Returns

Invited abstract in session MB-23: Managing product returns, stream Circular Economy, Remanufacturing and Recycling .

Monday, 10:30-12:00
Room: 82 (building: 116)

Authors (first author is the speaker)

1. Esra Gokbayrak
Industrial Engineering, Ozyegin University
2. Berk Deniz
Industrial Engineering, Ozyegin University
3. Enis Kayis
Industrial Engineering Department, Ozyegin University
4. Refik Gullu
Industrial Engineering Department, Bogazici University

Abstract

Fast fashion brands seamlessly integrate various sales channels to create a cohesive shopping experience. This seamless integration extends to the handling of product returns, ensuring that customers experience consistent policies across all channels, thereby enhancing overall satisfaction and retention. Particularly during peak shopping seasons and special occasions, consumers value the convenience of returning products to any store within the brand's network. However, the growth of applying omnichannel retailing has also led to an increase in product returns, posing challenges for inventory management and environmental sustainability due to unsold merchandise. This paper presents a solution for inventory management, considering the complex dynamics of omnichannel systems and the unique challenges generated by high return rates. Using dynamic programming, we formulate a model that optimizes pre-season order quantities for online warehouses and transshipment quantities to brick-and-mortar stores during the selling season. Our sensitivity analysis offers valuable insights for retailers seeking to balance profitability with environmental responsibility in the face of evolving consumer preferences and market dynamics.

Keywords

Status: accepted

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