How to receive in Replacement items

Dear Sir,
“We bought items from Supplier and we sold it to Customer. Customer returned the same items due to faulty and want for replacement. We have applied for replacement to Supplier but it was rejected because the warranty of the items was already expired. Before that, we also bought the stamrtnet contract for these items from Supplier which with that stamrtnet contract we can get extended warranty, and to use the extended warranty and get the replacement we should to request from Manufacturer, and Manufacturer delivered the replacement items and Manufacturer will collect the faulty items direct from us through the smartnet contract.

Now the question is.

  1. How we have to receive the replacement items in system since the Manufacturer deliver it?
  2. How to remove the faulty items from the system since the Manufacturer collect it?