Research On The Return Policy And The Performance Of The Supply Chain Based On The Type Of The Customers

Fierce market competition and potential risk leads to the prevalence of returning of goods which is an issue almost threatening each retailer. The attitude to dealing with returning of goods as well as relevant policies and their effectiveness inevitably will tend to be the key scale in determining whether the retailer is able to earn profits or further survive in the long run. Therefore, to make itself advantageous of relatively steady customers and low operating cost in the market competition, the retailer must actively make research on returning management crucial to the modernization of supply chain management, and then devise an efficient refund system involving a simple and efficient refund institution to make quick responsiveness to returning of goods required by customers, so that its image in the customers can be improved and with the reduction of management cost, the purpose of minimizing returning cost will be achieved. Nowadays more and more retailers have joined the"returning with no reason"action, while relevant analysis indicates that it's the products not meeting customers'need rather than fault in products leads to the majority of goods returning.A model on returning is developed in the article. In the model, customers are divided into two categories: non-rational customers and strategic customers, the premise is that to customers'product value is of uncertainty, namely that they cannot measure their value until purchasing. Similar to the traditional newsvendor model, aggregate demand is also a random variable., the point is that the price, quantity as well as refund amounts are determined by retailers, but to purchase or not and whether it's necessary to return goods after purchasing is totally up to customers.In the first place, on the base of the model, the focus of the analysis is on the effect of both full refund policy and partial refund policy to the performance of supply chain, also the relationship between the structure of customers as well as product price offered by distributors and refund amount is discussed.In the following place, the model demonstration analysis shows that on some occasion the returning policy changes the stimulating measures provided by the general supply chain contract, which actually exists in the repurchase contract. What's more, after getting rid of bi-marginal effect, some strategies are given to coordinate the supply chain when returning of goods happen. Most importantly, the refund time limit as a new variable is particularly adopted to make the model more realistic.At the end, to demonstrate the conclusions'generality, the model is extended with the parameters'flexible adjustment.