Research on joint inventory and price decisions for new and refurbished products under products exchange

This paper investigates the economic implications of introducing an on-site exchange policy in a retailer that sells both new and refurbished. This article focuses on how changes in return and exchange rates affect optimal ordering and pricing decisions for retailers, analyzing the implications of adopting an on-site exchange policy on inventory and pricing management strategies. Through parameter analysis, the results show that: (1) The on-site proves financially advantageous for retailers from reduced products returns. (2) Implementation of the on-site exchange policy shortens sales cycles, thereby enhancing the agility of new product introductions. These conclusions underscore the importance for retailers to continually refine return and exchange policies to improve user experience, minimize returns, bolster profitability, and enhance market position.