Note. The Role of Returns Policies in Pricing and Inventory Decisions for Catalogue Goods

Abstract

Manufacturers often use returns policies to encourage retailers to stock and price items more aggressively. We focus on the effect that such policies have on both a retailer's and a manufacturer's profits when the retailer must commit prior to the selling season to both a stocking quantity and a price at which to sell an item. Such a commitment is often necessary for retailers who sell primarily through catalogues.Pricing, Returns Policies, Newsboy, Manufacturing/Marketing Interface, Supply Chain

Quantitative Models for Reverse Logistics

“…In particular, commercial returns between retailers and manufacturers have been investigated. For example, Emmons and Gilbert (1998) present a game theoretic model for analysing the impact of commercial returns between retailers and manufacturers. It is show that return policies may be beneficial to both the manufacturer and the retailer.…”

Optimal Decisions in a Single-Period Supply Chain with Price-Sensitive Random Demand under a Buy-Back Contract

“…Particularly, the decision-making problems of each supply chain member in decentralized case, especially under Stackelberg framework, have generated a great deal of interest. Emmons and Gilbert [9] investigate the properties of each member's optimal decision in a single-period supply chain under a buy-back contract, by assuming that the demand has a linear and multiplicative form and follows uniform distribution. They suggest that there exists a domain of wholesale price where both the supplier and the retailer can earn more profits with a buy-back contract than with a wholesale price contract.…”

The impact of manufacturer rebates on supply chain profits

“…In particular, the use of quantity discounts [46], return policies [12], channel rebates [41], consignment contracts [44], and so forth, to achieve channel coordination has been studied extensively in the supply chain contracting literature. To the best of our knowledge, none of these supply chain management publications has explicitly analyzed the impact of a consumer rebate on different parties in a supply chain; see Lariviere [27], Tsay et al [42], and Cachon [7] for recent surveys of analyses on supply contracts.…”