Reference no: EM133736901

Assignment: Supply Chain Reverse Logistics Worksheet

Online shopping has dramatically changed the impact of reverse logistics. Costs rose nearly 40% between 2017 and 2020 for return freight alone. The pandemic and today's cost of fuel have raised that even more.

Let's look only at non-freight costs. A decade ago, most products were bought from brick & mortar stores where customers could look at, try on, and handle products before making a purchase. Many stores required a receipt and a good reason before they would accept a return. In just 10 years, all that has changed. Online retailers have "no questions asked" return policies. Customers buy things without trying them on, handling them, or seeing anything more than a picture. The percentage of products returned today versus a decade ago has risen dramatically.

What happens to all these returned products? What do retailers and manufacturers do with them? Who pays for that? If they are sent back to the source, what do the manufacturers do with the products, and how are those costs covered?

In each case, some of the issues include:

1) Who pays for the handling?

2) Can items be resold as new, and by whom?

3) What if items need repackaging? Who does that, and who pays for it? Note that for under $20 items, packaging costs can exceed 15% of the manufacturer's total item cost.

4) Can items be refurbished and sold as new or refurbished? Who does the refurbishing, and who pays for it?

These issues have changed the nature of the relationships between manufacturers and resellers - sometimes for the better, sometimes for the worse.

Question- Assume you are a manufacturer selling children's stuffed animals to Amazon. For this assignment, write a paper discussing what you feel are some of the most important of these cost-related issues. Suggest ways from the manufacturer's perspective that you think they should be addressed.