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 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 wastage information that can be disclosed to the risk-averse consumers. In this paper, we formulate consumers’ valuation of remanufactured products with and without blockchain quality information, based on which we examine 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 manufacturer prefers blockchain adoption while the supplier prefers blockchain adoption if (1) the consumers are not very risk-averse; (2) the consumers’ risk-aversion degree is moderate but customers’ quality uncertainty of the remanufactured product is small. We further investigate whether blockchain adoption can coordinate the supply chain and improve the environmental performance.