Research On The Price Policy Of Reverse Logistics In E-business With Time Value

E-Business is emerging and developing with the globalization of the market. In an E-Business environment, the customers buy commodities directly from an E-tailer, sacrificing the benefit of physical inspection of the product. This increases the likelihood that customers will have some dissatisfaction with the product and would like to return it. At the same time, because time value exists in products and product returns, price and return price will have a descending trend with time. A clearly explained and generous return policy, then, will be welcome by the customers and therefore will enhance demand. From the E-tailer's point of view, this will increase revenue, but will also increase cost due to increased likelihood of return. Thus, how to make sure the E-tailer gain maximum profit through appropriate price and return price policy, is a most important problem in the research field of reverse logistics. This paper takes time value factor into account, conducts research on the price and return policy of the E-tailer.This paper takes the different continuous time price decay parameter and the period of market validity into account, defines the initial price and initial return price as decision variables, and develops a period-profit-maximization model for the E-tailer in the period of market validity, to obtain optimal policies for initial price and initial return price in terms of certain market reaction parameters. This paper employs optimization theory and method to derive the optimal initial price and initial return price, thereby, derives the optimal period-profit for the E-tailer. Then compare and analyze the results of this paper with two extreme return policies namely no return and full return in early researches, find that this model will get more period-profit for the E-tailer.Based on theory analysis, this paper conducts sensitivity analysis and numerical experimentation of two types of parameters, which are market response parameters and product feature parameters. This paper present the influence of each. parameter to the period-profit for the E-tailer, in terms of theorems, corollaries, tables and figures derived from the sensitivity analysis and numerical experimentation above. Based on the analysis above, it obtains jointly a number of managerial guidelines for the E-tailer to use marketing and reverse logistics strategy variables in order to influence the parameters, so as to develop feasible solutions for marketing and reverse logistics management as two pivotal problems in E-business. These guidelines not only help the E-tailer to gain the maximum period-profit from the Internet market, but also build up the total competition advantages for the enterprise and products. In the end, the paper mentions several future research possibilities.