Inventory Management with Product Returns: The Value of Information

39 Pages Posted: 15 Oct 2003

See all articles by M. P. de Brito

M. P. de Brito

Erasmus Research Institute of Management (ERIM)

E. van der Laan

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management; Erasmus Research Institute of Management (ERIM)

Date Written: 25 2003 9,

Abstract

This paper evaluates the impact of misinformation for inventory systems with product returns. Ifone could exactly know how much is going to be returned and when, one would certainly benefitfrom incorporating this perfect information a priori in the management of production, inventory,and distribution. In practice, one has to attempt to forecast the timing and the amount of productreturns, by hypothesizing about the return flow properties. To do so, historic data on demandand returns can be used. The available literature on information and inventory managementwith product returns commonly 1) assumes known return probabilities; or 2) considers specificcases where the most informed method does not necessarily lead to the best performance,investigating the impact on inventory related costs.

Keywords: product returns, inventory management, information management, forecasting

JEL Classification: M, M11, R4

Suggested Citation

de Brito, Marisa P. and van der Laan, Erwin A., Inventory Management with Product Returns: The Value of Information (25 2003 9,). Available at SSRN: https://ssrn.com/abstract=450993

Marisa P. De Brito (Contact Author)

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Erwin A. Van der Laan

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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