Analysis of Reverse Logistics Functions of Small and Medium Enterprises: The Evaluation of Strategic Business Operations

Abstract

Today, reverse logistics (RL) is still considered as an emerging field, despite the fact that it has drawn increasing attention over the last decade and now there is a growing interest in the domain of RL than ever before. Although many firms have yet to recognize the capability of effective RL, some firms have realized the strategic importance of RL and initiated deployment of thoughtful investments in functions and systems of their RL practices. Nowadays, RL is considered as a crucial activity for the survival of companies. This article deliberates on RL, cost optimization (CO) and return strategies (RS), along with their implications for small and medium enterprises (SMEs). Information is collected from 420 SMEs using judgemental sampling. On the basis of the literature, the framework of the study is proposed and further analysis is performed using a reliability assessment, normality and adequacy examination, evaluation of the homogeneity of variances, development of the structural model with coefficients and testing of the model through fitment analysis. The outcome of the study highlights that there is no direct causal association between RL and CO; however, there is an indirect association through RS. It is observed that there is a significant cause-and-effect association between RL and RS, as well as a significant cause-and-effect association between RS and CO, in SMEs.