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Time Value of Commercial Product Returns

Souza, Gilvan C. and Guide, Jr., Daniel R. and Van Wassenhove, Luk N. and Blackburn, Joseph D. (2004) Time Value of Commercial Product Returns. [Industry Studies Working Paper:2004-04]



Once lightly regarded, the flow of product returns has become a significant concern for many manufacturers. For products, such as PCs, whose value deteriorates rapidly with time, the increasing rates of return from on-line sales have elevated the need for effective reverse supply chain designs. Products lose value in the return stream in two important ways: first, their value diminishes during time delays while awaiting evaluation, repair or refurbishing; second, losses can be incurred through erroneous disposition decisions due to incorrect assessments of the product’s value over time. Using field data for several consumer electronics products, we build analytical models to capture the economic value of a time-sensitive product over its life cycle and then use these models to develop supply chain designs that maximize value recovered from the return steam. We show that the returned product’s "time value" is a critical design parameter.

Industry Studies Series #:2004-04
Item Type:Industry Studies Working Paper
Uncontrolled Keywords:industry studies, industry studies working paper, industry studies association, industry studies research
ID Code:46
Deposited By:Mr Robin Peterson
Deposited On:11 Feb 2010 15:13
Last Modified:07 Jun 2010 10:44

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