Highlights Manufacturer's product quality improvement and retailer's in-store service combination strategies are considered. Both strategies of manufacturer and retailer can improve customer satisfaction with purchases. We identify the optimal customer returns management strategy of the supply chain. Each combination strategy can be a dominant supply chain returns management strategy. Endogenous decisions on in-store service and quality improvement levels are discussed.

    Abstract A manufacturer can improve product quality and a retailer can provide in-store service in order to improve customer satisfaction and manage customer returns in a supply chain. In this paper, we develop a model for a supply chain in which the retailer offers a full-refund customer returns policy, and the customer is heterogenous in willingness-to-pay for product quality and faces uncertainty as to the fitness of the product. We examine the manufacturer’s optimal quality improvement strategy and the retailer’s optimal in-store service strategy. Our study shows that the optimal customer returns management strategy from the perspective of the supply chain as a whole coincides with the individual interests of both the manufacturer and the retailer. We show that each of the four supply chain strategies (no quality improvement and no in-store service, in-store service but no quality improvement, quality improvement but no in-store service, and both quality improvement and in-store service) can be a dominant supply chain strategy, depending on several factors. These factors include the degree of the increase in product quality and/or the degree of the increase in the likelihood of the customer’s satisfaction due to in-store service, and the relative efficiencies of producing and selling the product with/without the manufacturer’s quality improvement and/or with/without the retailer’s in-store service. We show that when either the manufacturer can flexibly determine the quality improvement level, or the retailer can flexibly adjust in-store service level, or both can decide their respective strategies, the dominant strategy includes both in-store service by the retailer and quality improvement by the manufacturer.


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    Titel :

    Manufacturer’s quality improvement and Retailer’s In-store service in the presence of customer returns


    Beteiligte:
    Guo, Xiongfei (Autor:in) / Chen, Jing (Autor:in)


    Erscheinungsdatum :

    2023-07-08




    Medientyp :

    Aufsatz (Zeitschrift)


    Format :

    Elektronische Ressource


    Sprache :

    Englisch




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