Inventory Decisions Considering Returns in Omni-channel Retailing

Omni-channel retail is a new model that is achieved by integrating online stores and offline physical stores. The inventory decision problem considering returns under omni-channel retail is studied in two cases: considering same-channel returns under omni-channel retail and considering cross-channel returns under omni-channel retail. Based on the consideration of consumer returns and resale of returned products, the newsboy model is used to construct inventory decision models with the goal of maximizing retailer profits and analyze the models. Numerical analysis shows that the online store return ratio and the cross-channel return ratio have a significant impact on the inventory and profit of the retailer's offline physical stores and online stores. In particular, when the cross-selling profit is large, the cross-channel return ratio increases, and the retailer's profit increases accordingly, but the retailer's profit may decrease with the increase of the online store return ratio.