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Returns
Definition
Products sent back from retailers, distributors, or consumers due to damage, defects, mis-shipments, or recalls. Returns re-enter the supply chain for inspection, credit, or disposal and typically result in additional handling costs and write-offs.
How It's Calculated
Units returned × unit cost or wholesale value.
Example
A retailer returns 150 cases of cereal to the manufacturer after a packaging defect triggers a voluntary recall.
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