A SYSTEM DYNAMICS MODEL ON REVERSE LOGISTICS PROFITABILITY OF HIGH VOLUME RETURNS WITH DETERIORATION IN COMPUTER INDUSTRY
Keywords:
Reverse logistics, System Dynamics, Profitability, Computer industry, Deteriorated returnsAbstract
This article presents the dynamic behaviour of five influential factors in computer
manufacturer’s reverse logistics (RL) operations, namely part type, return quality,
market attractiveness, custom duty percentage and product deterioration rate on its
profitability. Accordingly, a System Dynamics (SD) model has been developed to
facilitate the manufacturers in managing the factors within their product return systems
to maximize their profits. Secondary data from a case study is employed in the simulation
experiments to evaluate the factors under high return volume and medium airfreight cost
circumstances. The results provided in numerical forms show that the maximization of
profitability can be achieved through buy part type, superior return quality, high market
attractiveness, low custom duty percentage and low deterioration rate.
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