Activities for Students: Managing Returns in a Catalog Distribution Center

Abstract

Iwas amazed by the complexity of the returnshandling problem at a catalog distribution center that I studied with a Purdue University research team. Initially, the problem appeared to be purely accounting in nature. I proposed storing returned items if the cost of processing a return back to inventory was lower than the potential profit generated by selling it. I discovered that many other factors, such as the speed with which the catalog distribution center fills an order, must be considered in the decision-making process. The research team developed an algorithm that considers several different factors, in addition to cost, to help catalog distribution centers process their returns more efficiently (Stuart et al. 2003).