Date/Time
Date(s) - 10/11/2021
3:30 pm - 4:30 pm

Speaker: Dr. Mehmet Erdem Coskun

Topic: Retail Reverse Supply Chain Management and Optimization

Date of Presentation: Wednesday, November 10, 2021

Location:  Online

Abstract:

In our research, we work on three important problems related to reverse supply chain optimization in the retailing environment. In the retail reverse supply chain, each retail store holds some products that are not selling and wish to salvage them optimally. The first problem is related to how to use a given budget in order to relocate and/or return products within the retail supply chain network. We model a reverse supply chain model for retailers under a profit-loss budgetary limitation. The retail reverse supply chain consists of multiple stores, a distribution center, a warehouse and multiple vendors. Each store carries some inventory that is underselling, and it is important to reduce the inventory of such products in order to refill the space with more productive inventory. The objective is to use this budgetary limitation as effectively as possible with the most suitable products to be relocated and/or returned back to their vendor. In the second problem, we consider the realistic retail network and optimize the inventory of each store for their store returns. We model a comprehensive retail reverse supply chain network where there are multiple stores under different store types, namely, Company Owned and Franchise Stores, multiple warehouses, multiple distribution centers, multiple vendors, and liquidators. The objective of the retailer is to minimize costs for relocating these products within and outside of the network. However, individual franchise stores have their own goals of how their ineffective inventory should be handled. Hence, there is a conflict between franchise stores’ objectives and the retail company’s objective in terms of how much inventory should be chosen from each store to be relocated. The tactical decision making process of which Distribution/Return Centers should be activated is implemented and designed into the model structure since it might be very costly to use all of the return centers for a reverse logistics activity. In our third problem, we work on the parameter optimization problem of vendor penalty structure for vendor negotiation. Vendors use a multi-layer penalty structure for returning products, which means that they charge more penalty if the retail company returns more than a predetermined amounts. The objective is to find the optimal vendor penalties and/or optimal return thresholds that should be negotiated with the vendor in order to pay a lower penalty in the upcoming return cycles compared to what would have been paid if the same penalty structure stands. The third problem is a strategic decision making problem compared to the first two problems where we deal with more operational and tactical decision making issues.