A system dynamics model on reverse logistics profitability of high volume returns with deterioration in computer industry

This article presents the dynamic behaviour of five influential factors in computer manufacturer's reverse logistics (RL) operations, namely part type, return quality, market attractiveness, custom duty percentage and product deterioration rate on its profitability. Accordingly, a System Dynamics (SD) model has been developed to facilitate the manufacturers in managing the factors within their product return systems to maximize their profits. Secondary data from a case study is employed in the simulation experiments to evaluate the factors under high return volume and medium airfreight cost circumstances. The results provided in numerical forms show that the maximization of profitability can be achieved through buy part type, superior return quality, high market attractiveness, low custom duty percentage and low deterioration rate.