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No Refund or Full Refund: When Should a Fashion Brand Offer Full Refund Consumer Return Service for Mass Customization Products?
Joint Authors
Choi, Tsan-Ming
Liu, Na
Ren, Shuyun
Hui, Chi-Leung
Source
Mathematical Problems in Engineering
Issue
Vol. 2013, Issue 2013 (31 Dec. 2013), pp.1-14, 14 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2013-04-11
Country of Publication
Egypt
No. of Pages
14
Main Subjects
Abstract EN
We analytically explore in this paper the consumer return policy under fashion mass customization (MC) program.
To be specific, we model the stochastic fashion MC program with the consideration of consumer demand uncertainty.
If a consumer return policy is implemented, we further consider return uncertainty.
By modeling the optimization objective of the risk averse MC fashion brand via a mean-variance approach, we derive the closed-form optimal solution under each case.
We then conduct both analytical and numerical sensitivity analyses.
For the scenario with full refund and return, we reveal the analytical conditions under which the optimal retail price and the optimal number of options available for customization (called the “optimal modularity level”) vary monotonically with respect to the salvage value and the return service charge.
For the scenario when there is no refund and return, we show that the optimal retail price and the optimal modularity level are decreasing in the MC fashion brand's degree of risk aversion, the demand uncertainty, and the price-demand sensitivity coefficient.
In addition, our numerical analysis indicates that whether the risk averse MC fashion brand would prefer offering consumer return with full refund to no return depends heavily on the demand-return correlation (DRC) parameter.
American Psychological Association (APA)
Choi, Tsan-Ming& Liu, Na& Ren, Shuyun& Hui, Chi-Leung. 2013. No Refund or Full Refund: When Should a Fashion Brand Offer Full Refund Consumer Return Service for Mass Customization Products?. Mathematical Problems in Engineering،Vol. 2013, no. 2013, pp.1-14.
https://search.emarefa.net/detail/BIM-1031974
Modern Language Association (MLA)
Choi, Tsan-Ming…[et al.]. No Refund or Full Refund: When Should a Fashion Brand Offer Full Refund Consumer Return Service for Mass Customization Products?. Mathematical Problems in Engineering No. 2013 (2013), pp.1-14.
https://search.emarefa.net/detail/BIM-1031974
American Medical Association (AMA)
Choi, Tsan-Ming& Liu, Na& Ren, Shuyun& Hui, Chi-Leung. No Refund or Full Refund: When Should a Fashion Brand Offer Full Refund Consumer Return Service for Mass Customization Products?. Mathematical Problems in Engineering. 2013. Vol. 2013, no. 2013, pp.1-14.
https://search.emarefa.net/detail/BIM-1031974
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1031974