Study on Customer False Failure Returns Policies and Supply Chain Performance in E-Business

In this paper, decision models of a supply chain system consisting of one e-tailer and a group of consumers were established for issues of false failure returns in e-business. Considering the consumer´s strategic decisions, the optimal price, optimal stocking quantity, and optimal return price as well as the critical selling cost based on e-business platform under the three different returns policies were given. In addition, the three return policies as well as their impacts on the supply chain performance were compared and discussed. Our results show that when product´s purchasing/production cost or the salvage value is very low, no return policy is optimal compared with the full return policy, while the partial return policy is always superior to the full return policy for the supplier/manufacturer.