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Lally Professor Recognized for Research on Retailer–Consumer
Return Policies and Profitability

Muge Yayla-Kullu

Müge Yayla-Küllü, assistant professor of operations management at the Rensselaer Lally School of Management.

A recent research article co-authored by Müge Yayla-Küllü, assistant professor of operations management at the Rensselaer Lally School of Management, has been chosen as a showcase article by the Institute for Operations Research and the Management Sciences (INFORMS).

The article, "Serving Fraudulent Consumers? The Impact of Return Policies on Retailer's Profitability,” was also awarded “Best Paper Runner-Up” in the INFORMS 2013 Conference Service Science Track. 

INFORMS is the "largest society in the world for professionals in the field of operations research, management science, and analytics."

From the paper’s abstract:
“Competition in the current marketplace requires businesses to provide consumers with the utmost convenience in purchasing services and goods. Buyers expect that, as an aftersales service and risk reliever, they can 'return' goods if they are not satisfied with them. Such product returns significantly influence retailers' profits not only because of a reduction in net sales but also because of increased costs.

Despite its substantial impact, research focused on retailer–consumer return policies has
been limited. To fill this gap, we study a retailer that has to set the product return policy
parameters—specifically, the price and the return period. The impact of these parameters
on consumers' valuation function is also taken into account. We study the model analytically
and provide insights through various numerical examples.

We find that even with fraudulent consumers' negative effect on sales, a retailer could expect
both its profits and prices to increase with an optimally determined return policy. We also find
that a retailer that operates in an environment where consumers are not sensitive to return
policies should be cautious when setting the return period.”

For more information on this paper, click here.

For a podcast about the research findings with co-author Ali Ulku of Capital University, click here.

Published: February 18, 2014

Contact: Julie K. Tracy
Phone: (518) 276-3053

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