A company may have a program that does not accept returns from its customers. Rather, it gives the retailer an allowable return rate, and proposes guidelines as to the proper disposition of the items. Such policies are usually accompanied by discounts for the retailer.
This type of policy passes the returns responsibility onto the retailer, while reducing costs for the manufacturer or distributor.
The drawback is that the manufacturer loses some control over its merchandise.
Remanufacture and Refurbishment
The advantage of remanufacturing and refurbishment is using reworked parts resulting in a cost savings.
There are five categories of remanufacture and refurbishment:
Make the product reusable for its intended purpose:
1) Repair
2) Refurbishing
3) Remanufacturing
Retrieve reusable parts from old or broken products:
4) Cannibalization
Reuse parts of products for different purpose:
5) Recycling