Recycling Mode Choice in a Textile and Apparel Closed-Loop Supply Chain considering Blockchain

Abstract

The development of the textile and apparel (T&A) industry has led to an increasing focus on recycling used products. Remanufactured product quality raises consumer concerns, and blockchain can effectively solve this problem. We establish a closed-loop supply chain (CLSC) in which a manufacturer, a retailer, or a third-party recycler collects used T&A products to examine the most efficient recycling mode with and without blockchain and the impact of blockchain on CLSC decisions. The results show that (1) if the manufacturer’s recycling cost coefficient is relatively low, used T&A products are collected directly by the manufacturer. Otherwise, the responsibility for recycling used T&A products falls to the retailer or the third-party recycler. It is noteworthy that the manufacturer’s choice of recycling mode remains unchanged whether a blockchain is implemented or not. (2) The implementation of blockchain by the manufacturer and the retailer can increase profits and consumers also benefit when the cost of validating blockchain units remains below a certain threshold. (3) When the recycling cost coefficient exceeds a certain threshold, the implementation of blockchain increases prices and recycling rates. These findings offer CLSC members’ management insights into how to select the optimal recycling mode and the consequences of implementing blockchain.