Return Window Decision in A Distribution Channel

• 成果类型: Article
• 署名作者: Ma, Buqing; Di, Chenchen; Hsiao, Lu
• 署名单位: Chinese Academy of Sciences; University of Science & Technology of China, CAS; University of Illinois System; University of Illinois Urbana-Champaign; National Chung Hsing University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.13201
• 发表日期: 2020
• 页码: 2121-2137
• 关键词: money-back guarantee; product quality; policies; COORDINATION; DESIGN; IMPACT

摘要

This study investigates a firm's return window decision in a distribution channel. Conventional wisdom posits that compared to a centralized channel, a decentralized channel induces worse services (e.g., a shorter return window) because of double marginalization. We build a model consisting of one manufacturer, one retailer, and consumers who are heterogeneous in their willingness-to-pay (WTP) for product quality. Counterintuitively, we find that the return window can be longer in a decentralized channel than in a centralized channel. Furthermore, the return window can decrease along with product quality, which means that high-quality products can be offered shorter return windows than low-quality products. When endogenizing product quality, we reveal, contrary to previous findings, that the product quality in a decentralized channel may be higher, even when consumer heterogeneity in product quality follows a uniform distribution. This higher product quality induces a decentralized channel to generate a consumer surplus higher than that of a centralized channel.