Remanufacturing Model Selection and Technology Adoption of Closed-Loop Supply Chain Considering Consumer Risk Aversion

Abstract

The pressure of environmental responsibility, cost reduction and emission reduction has driven the rapid development of the remanufacturing industry. Manufacturers are now faced with the critical issue of how to achieve common development through cooperation or competition with other remanufacturers. Additionally, due to the lack of transparency in information, the decision of whether to introduce blockchain technology to alleviate consumers’ distrust in the quality of remanufactured products is also a crucial consideration for supply chain members. In light of this, four models were constructed to examine the impact of different remanufacturing modes (outsourcing and authorization) and blockchain strategies (adoption and non-adoption). The optimal decisions for each model were determined, and the selection of remanufacturing modes and blockchain adoption strategies for the manufacturer under various factors were discussed. The results indicate that, regardless of the mode, the price and demand for remanufactured products increase with consumers’ acceptance of remanufactured products, and decrease with their risk aversion and the quality fluctuation of remanufactured products. While blockchain technology may initially reduce the price and demand for remanufactured products, the authorized mode with blockchain adoption can ultimately bring higher profits to manufacturers when the blockchain service fee is low. However, when the blockchain service fee is high, manufacturers can maximize economic and environmental benefits, as well as social welfare, by choosing the outsourcing mode with blockchain adoption.

Keywords

Remanufacturing mode selection / consumer risk aversion / quality uncertainty / blockchain adoption

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