Creating All-win by Blockchain in a Remanufacturing Supply Chain with Consumer Risk-aversion and Quality Untrust

Remanufactured product, by definition, is the product with the same-as-new quality but a low cost because the components are usually reused and/or repaired. Consumers have doubts about the wastage status of the components so risk-aversion and quality untrust are incurred when they buy remanufactured products. To cope with this, it is necessary for both the components supplier and the manufacturer to adopt blockchain which enables credible traceability of the components’ real-time status. Then the wastage information could be collected and disclosed to the risk-averse consumers if the reused components are assembled to remanufactured products. In this paper, we formulate consumers’ valuation of remanufactured products with and without blockchain quality information, based on which we examine the blockchain adoption incentives of both the supplier and the remanufacturer that might create all-win situations. When the manufacturer sells both regular and remanufactured products, we find that the supplier prefers blockchain if (1) the consumers are not very risk-averse; (2) the consumers’ risk-aversion degree is moderate but the quality uncertainty of the remanufactured product is ignorable. We further study the impact of remanufacturing cost and the manufacturer’s risk-aversion, finding that all-win situations could still be achieved by blockchain