Answer to Question 1
Customer Returns
A variety of reasons for customer returns can be given, including defective or unwanted items, warranty problems, recalls, and misshipments. Given the potential magnitude of such returns, managing the product return process can have a substantial impact on a company's profit and loss statement. The internal channel for return flows will differ depending on the reason for the return.
Environmental Challenges
Recycling and environmental concerns are frequently viewed simultaneously because of their association with regulatory policy at the local, state, and federal level. Social concerns stimulate the development of more environment friendly products, new standards, and publicly provided recycling programs. It may be surprising to some individuals, but corporations play an active role in this area as part of their focus on ethics and social responsibility.
Economic Value
In reverse logistics systems as well as closed loop supply chains, economic benefits have become an important emphasis for businesses and even some nonprofit organizations. The potential for viewing reverse flows as a value stream as opposed to a waste stream was identified in a study published over 30 years ago and further amplified in a White Paper published by the Council of Logistics Management. Both studies pointed out that economic benefits can be the primary driver for the establishment of explicit reverse flow processes not otherwise required by customer service (product returns) and governmental requirements. In other words, recycling for reuse and remanufacture has the potential to be a profitable scenario and a value stream. This has become particularly true in industries that have experienced increasing cost of raw materials, such as the steel industry.
Answer to Question 2
True
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