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Open AccessArticle

Return Strategies and Online Product Customization in a Dual-Channel Supply Chain

1
Research Center of Logistics, Shanghai Maritime University, Shanghai 201306, China
2
School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China
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Author to whom correspondence should be addressed.
Sustainability 2019, 11(12), 3482; https://doi.org/10.3390/su11123482
Received: 7 May 2019 / Revised: 16 June 2019 / Accepted: 17 June 2019 / Published: 25 June 2019
(This article belongs to the Special Issue Optimal Decisions and Risk Assessment in Sustainable Supply Chains)
This paper investigates in a dual-channel supply chain which return strategy is better for the manufacturer that considers the consumers’ utility. We find that a manufacturer prefers offering a Money-Back Guarantee (MBG) as long as the net salvage value of the returned product is positive in a channel. However, the return strategy of the retailer is more affected by the return policy of another channel than the net salvage value. In order to reduce online returns, we propose the online product customization channel, and then, we examine the choice of return policy and the manufacturer’s channel selection. We show that the demand and profit of the manufacturer will increase to a certain extent when opening an online customization channel. However, compared to the case where both channels provide an MBG, the implementation of online customization may hurt the manufacturer’s profits with the increase in consumer satisfaction in indirect channels. View Full-Text
Keywords: return policy; online customization; pricing; Stackelberg game return policy; online customization; pricing; Stackelberg game
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Zhang, R.; Li, J.; Huang, Z.; Liu, B. Return Strategies and Online Product Customization in a Dual-Channel Supply Chain. Sustainability 2019, 11, 3482.

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