EURO 2024 Copenhagen
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90. Optimal Policies for Handling Returned Products in the Reverse Supply Chain

Invited abstract in session TD-50: Omni-Channel Retailing , stream Retail Operations.

Tuesday, 14:30-16:00
Room: M2 (building: 101)

Authors (first author is the speaker)

1. Nizar Zaarour
Supply Chain And Information Management, Northeastern University
2. Emanuel Melachrinoudis
Mechanical and Industrial Engineering, Northeastern University
3. Sining Chai
Northeastern University

Abstract

Product returns are an essential part of conducting business today, due to the emergence of e-commerce and the proliferation of generous return policies. Such policies, however, can backfire due to their costly operations and unpredictability. To minimize the adverse impact, we develop and compare different collection policies to minimize the combined inventory and transportation costs in a three-echelon network consisting of (a) customers returning products to initial collection points (ICPs), (b) the ICPs, and (c) the centralized return centers (CRCs), that receive the products shipped from the ICPs after they are aggregated into larger shipments to leverage economies of scale. Collection policies are developed for the cases of a single product and a single ICP and CRC; multiple products and a single ICP and CRC; and multiple products with a single ICP and multiple CRCs, by using individual shipment policy where ICPs ship out products to individual CRCs and a combined shipment policy that allows shipping and routing from an ICP to multiple CRCs. Mathematical models are developed to determine the collection period at the ICPs to minimize the combined inventory and transportation costs for these policies. An efficient algorithm is developed, and results are presented with an experimental dataset.

Keywords

Status: accepted

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