Single item periodic review inventory control with sales dependent stochastic return flows

Name: Single item periodic review inventory control with sales dependent stochastic return flows
Author: Gökbayrak, Esra, Kayış, Enis

İsim	Single item periodic review inventory control with sales dependent stochastic return flows
Yazar	Gökbayrak, Esra, Kayış, Enis
Basım Tarihi:	2023-01
Basım Yeri	- Elsevier
Konu	Inventory management, Stochastic product returns, Dynamic programming
Tür	Süreli Yayın
Dil	İngilizce
Dijital	Evet
Yazma	Hayır
Kütüphane:	Özyeğin Üniversitesi
Demirbaş Numarası	0925-5273
Kayıt Numarası	47bb98dc-1990-4b1d-9c48-b1180049d952
Lokasyon	Industrial Engineering
Tarih	2023-01
Notlar	TÜBİTAK
Örnek Metin	Retailers have to deal with increasing levels of product returns as the shares of e-commerce sales soars. With this increase, it is no longer feasible to dispatch returned products to outlets or landfills, hence retailers must re-evaluate them both to maximize profit and to minimize their environmental impact. Our objective is to study a retailer's optimal inventory control policy under product returns to maximize expected profit which is the sales revenue minus the procurement, backorder, holding, and salvage costs incurred in a finite horizon. We model a period's returns to be stochastically dependent on the previous period's sales quantity. Using dynamic programming formulation, we solve for the optimal periodic review inventory policy and provide structural results on the optimal policy of the final period. Through numerical studies, we show that incorporating detailed sales-dependent returns could increase a retailer's expected profit by 23%. Ignoring this dependency in determining the optimal inventory policy results with increased order frequency, higher levels of backorders and more leftovers which could eventually end up in a landfill, but above all could lead to a significant overestimation of the resulting profit.
DOI	10.1016/j.ijpe.2022.108699
Cilt	255

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Single item periodic review inventory control with sales dependent stochastic return flows

Yazar Gökbayrak, Esra, Kayış, Enis

Basım Tarihi 2023-01

Basım Yeri - Elsevier

Konu Inventory management, Stochastic product returns, Dynamic programming

Tür Süreli Yayın

Dil İngilizce

Dijital Evet

Yazma Hayır

Kütüphane Özyeğin Üniversitesi

Demirbaş Numarası 0925-5273

Kayıt Numarası 47bb98dc-1990-4b1d-9c48-b1180049d952

Lokasyon Industrial Engineering

Tarih 2023-01

Notlar TÜBİTAK

Örnek Metin Retailers have to deal with increasing levels of product returns as the shares of e-commerce sales soars. With this increase, it is no longer feasible to dispatch returned products to outlets or landfills, hence retailers must re-evaluate them both to maximize profit and to minimize their environmental impact. Our objective is to study a retailer's optimal inventory control policy under product returns to maximize expected profit which is the sales revenue minus the procurement, backorder, holding, and salvage costs incurred in a finite horizon. We model a period's returns to be stochastically dependent on the previous period's sales quantity. Using dynamic programming formulation, we solve for the optimal periodic review inventory policy and provide structural results on the optimal policy of the final period. Through numerical studies, we show that incorporating detailed sales-dependent returns could increase a retailer's expected profit by 23%. Ignoring this dependency in determining the optimal inventory policy results with increased order frequency, higher levels of backorders and more leftovers which could eventually end up in a landfill, but above all could lead to a significant overestimation of the resulting profit.

DOI 10.1016/j.ijpe.2022.108699

Cilt 255