Reverse Logistics & Returns Flashcards
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Read the first 7 Reverse Logistics & Returns flashcards as text
What is 'disposition override' authority in a reverse logistics operation?
Answer: Management permission required to change a system-recommended disposition decision
Disposition override authority defines who can change a system- or policy-recommended disposition (e.g., from scrap to resell), ensuring accountability for exceptions.
In reverse logistics, what is 'cannibalization' as a disposition strategy?
Answer: Harvesting working components from returned units to repair other products
Cannibalization (or parts harvesting) extracts functional components from returned units for use in repairing or refurbishing other units, maximizing recovery value.
Which factor most significantly increases the cost of processing consumer returns compared to B2B returns?
Answer: Greater variability in condition and packaging of returned items
Consumer returns arrive in highly variable conditions—damaged packaging, missing parts, mixed reasons—requiring more manual inspection and sorting than B2B returns.
What is the primary purpose of a 'returns authorization matrix' in inventory management?
Answer: To define which products can be returned, by whom, and under what conditions
A returns authorization matrix pre-defines eligibility rules (product type, age, condition, customer tier) to ensure consistent and policy-compliant return decisions.
How does 'advance ship notice' (ASN) technology improve reverse logistics efficiency?
Answer: It gives the returns center advance knowledge of incoming returns to prepare labor and dock space
An ASN for returns notifies the receiving facility of what is coming—item types, quantities, conditions—allowing proactive labor scheduling and dock preparation.
A company processes 1,200 returns per month with an average handling cost of $18 each. If improved gatekeeping reduces invalid returns by 15%, what is the monthly cost savings?
Answer: $3,240
15% of 1,200 = 180 returns eliminated; 180 × $18 = $3,240 monthly savings.
What distinguishes 'value recovery' from 'cost avoidance' as reverse logistics performance goals?
Answer: Value recovery maximizes revenue from returned goods; cost avoidance minimizes processing expenses
Value recovery aims to maximize financial return from returned goods (resale, refurbishment, recycling), while cost avoidance focuses on reducing the operational expenses of handling returns.