P.Chandiran

 Many assumptions in traditional models does not suit reverse inventory  Both demand and supply of returned products not predictable  Returns depends upon the policy, product quality and type of consumer culture  Demand for returned products is not clear because the destination is not clear.

 Returned inventory is limited by space  Should follow fixed quantity model  Should design storage facility  Proper identification and coding should be done  Bulk loose Packing and storage activities  Cost of reminders and follow up with suppliers  More product categories, less volume

 Repacking  Segregation  Codification  Disposal  Repair Inventory  Faster turnover may be required to get max. value

13-5  Allows a retailer to return unsold inventory up to a specified amount at an agreed upon price  Increases the optimal order quantity for the retailer, resulting in higher product availability and higher profits for both the retailer and the supplier  Most effective for products with low variable cost, such as music, software, books, magazines, and newspapers  Downside is that buyback contract results in surplus inventory that must be disposed of, which increases supply chain costs  Can also increase information distortion through the supply chain because the supply chain reacts to retail orders, not actual customer demand

13-6  The buyer pays a minimal amount for each unit purchased from the supplier but shares a fraction of the revenue for each unit sold  Decreases the cost per unit charged to the retailer, which effectively decreases the cost of overstocking  Can result in supply chain information distortion, however, just as in the case of buyback contracts

 Mostly vegetables and fruits should be disposed at retail level itself.  Find some NGOs and social service organization who can take these items at their cost.  Packed food items should returned fast to warehouse or distribution center so that it can be used for alternative purpose.  Should be kept separately

 Need separate storage  To be disposed at the earliest  Medicines after expiry should be destroyed  Find suitable disposable destination  Salvage wherever possible