When Is It Wise to Use Blockchain for Platform Operations with Remanufacturing?

Xiaoping Xu, Luling Yan, Tsan Ming Choi, T. C.E. Cheng

Research output: Journal article publicationJournal articleAcademic researchpeer-review

39 Citations (Scopus)

Abstract

Blockchain technology has been widely used in many industries. One current application is in remanufacturing. In this paper we consider the combination of remanufacturing and blockchain, and model a supply chain composed of a manufacturer, a third-party firm, and an online platform. Among them, the manufacturer faces the cap-and-trade regulation and adopts blockchain to record the information on the used products and then remanufactures products. The platform has the power to expand the potential market size and can operate in the marketplace or reselling mode. The third-party firm collects used products for the manufacturer. We conduct a Stackelberg game analysis and obtain the following major findings: First, the optimal production quantities and optimal collection rates with and without blockchain in the marketplace and reselling modes increase with the allocated cap and platform-enabled power. Second, in the reselling or marketplace mode, the manufacturer should not adopt blockchain if the emissions intensity is low; otherwise, it should adopt blockchain. Third, selecting the reselling (marketplace) mode is more profitable for the manufacturer if the platform-enabled power is low (high). Fourth, for quantity coordination, the reselling mode under the wholesale price contract can always coordinate the manufacturer and platform, and the manufacturer, online platform, and third-party firm. However, the marketplace mode with a commission rate can only coordinate the manufacturer, online platform, and third-party firm. For social welfare coordination, the manufacturer, online platform, and third-party firm can achieve coordination in the marketplace or reselling mode. Finally, extending the work to consider the cross-channel effect, we find that the major findings for both quantity coordination and social welfare coordination in the reselling and marketplace modes still hold.

Original languageEnglish
Pages (from-to)1073-1090
Number of pages18
JournalEuropean Journal of Operational Research
Volume309
Issue number3
DOIs
Publication statusPublished - 16 Sept 2023

Keywords

  • Blockchain
  • Cap-and-trade
  • Logistics
  • Marketplace mode
  • Remanufacturing
  • Reselling mode

ASJC Scopus subject areas

  • General Computer Science
  • Modelling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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