Reverse Logistic Product Pricing Decision in a Supply Chain with Substitutable Product and Random Yield

University bookstores have a complex multi-product, multi-supplier supply chain with complex channel relationships such as product substitution, random yields, reverse logistics and returns, and risk sharing contracts. Supply chain efficiency is important to the bookstore due to low overall profit margin. The used book buyback activity is an example of reverse logistics with random yield with substantial impact on bookstore supply chain efficiency. In this paper, we develop a single period model to study the buyback pricing decision under assumption of product substitution and random yield. Model application is demonstrated with actual data collected at a university bookstore.