Optimal returns policy for supply chain with e-marketplace

Abstract

We study in this paper a supply chain which is integrated by a returns policy. In the past, owing to a lack of sales channels, the returned products would worth very little. Now, with the advance of the e-commerce, the returned products can be sold with a higher price on the e-marketplace. In light of this, we first investigate the optimal returns policy under the existence of the e-marketplace. Through a mean–variance analysis, we further study the risk issue associated with the optimal policy. Extensive simulations are then carried out and the managerial insights are discussed.