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Title: Fashion mass customization supply chains with consumer returns : coordination and supply contracting
Authors: Guo, Shu
Degree: Ph.D.
Issue Date: 2018
Abstract: In the fashion industry, providing customized products (or service) and satisfying the segmented market requirements are critically important. As a result, mass customization (MC) has become a popular business trend in recent years. At the same time, the quick response strategy has also emerged as a popular strategy because of its high efficiency in helping fashion companies reduce the forecast error by incorporating updated market information into the inventory decisions before the start of the selling season. A combined application of these two strategies thus makes the fashion supply chain totally different from the traditional fashion supply chain, which deserves deep investigation. On the other hand, the short-season characteristic of fashion products often leads to a huge number of leftover products to the fashion companies, referring to various unsold items, product recalls, warranty returns, damaged goods and unwanted products. Furthermore, due to the fierce competition in the fashion industry, fashion companies always tend to offer additional and generous agreements for consumers to return their products, especially for some special programs like the online shopping and the mass customization program, which would positively influence the consumers' purchasing behavior. As a result, an effective management of the unsold leftovers and consumer returns is crucial to every fashion company. However, the supply chain systems, including the fashion mass customization supply chains, are widely acknowledged to fail to be optimal by themselves under a decentralized mode of operations (i.e., it is not coordinated). This consequently leads us to explore what kind of supply chain contract can help achieve supply chain coordination for the fashion mass customization supply chains in the presence of consumer returns.
Therefore, motivated by the importance of consumer returns, the versatility of supply chain contracts and the under-explored fashion mass customization supply chains under quick response, this thesis is developed and it aims to (i) investigate the supply chain of the fashion companies which adopt mass customization with quick response and permit consumer returns, and (ii) examine the performance of some supply chain contracts in coordinating the channel. In this thesis, we first conduct a detailed literature review on supply chain contracting with consumer returns and examine how supply chain contracts perform differently in various supply chain links with consumer returns. Aspects like the categories of supply chain contracts, different links in the supply chains, the number of participating members and different channel leaderships are deeply investigated. Then a hybrid approach based on the combination of both empirical and analytical studies is adopted. Under the hybrid approach, the in-depth case study on two fashion brands, which has launched the MC program and provided consumer returns policies, is firstly conducted. The selected cases present the current situation of MC practices in the fashion industry and empirically show the significance of the topic and motivation for the analytical studies. Afterwards, mathematical modeling (based on the newsvendor model, Bayesian updating and mean-variance theory) approach is applied, followed by various different numerical analyses. The related analytical results show many important theoretical findings which help explain real world observations from the fashion industry. For instance, the impacts brought by the quick response strategy and different salvage values of consumer returns as well as unsold inventories are revealed. The supply chain contracts that can lead to a win-win outcome and coordination for the mass customization fashion supply chain are also explored. The research findings derived from the proposed models in this thesis, like the unique advantages of the quick response strategy and the industrial measures for MC scheme improvement, can make a great contribution to the literature, especially in the field of the MC program. Moreover, this thesis can also serve as a helpful reference to the industrialists in the fashion industry on MC programs and the respective consumer returns policies.
Subjects: Hong Kong Polytechnic University -- Dissertations
Clothing trade -- Management
Business logistics
Returning goods
Pages: 156 pages : color illustrations
Appears in Collections:Thesis

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