Blockchain-technology-supported platforms for diamond authentication and certification in luxury supply chains

The blockchain technology is very useful in many industries. One current application is on diamond authentication and certification, which is important in many luxury supply chains. In this paper, we explore different consumer utility driven operations models and highlight the values of blockchain technology supported (BTS) platforms for diamond authentication and certification. We build models and analytically examine both the traditional retail network operations (Model R) and the BTS selling platform (Model PL). We further extend the analysis to study the case with the BTS certification platform (Model BCR). We reveal the conditions under which one model outperforms the others. In particular, we note that the shopping convenience utility offered by the traditional retailers is a critical factor determining which model is the best. Finally, for the BTS platform operations, we study the blockchain-technology-based diamond authentication and certification (BDAC) cost and reveal that reducing it is beneficial to all parties in the luxury supply chain.

[1]  Ling-Chieh Kung,et al.  The Optimal Pricing Strategy for Two-Sided Platform Delivery In the Sharing Economy , 2017 .

[2]  Andrea Sianesi,et al.  Supply chain strategy for companies in the luxury-fashion market: Aligning the supply chain towards the critical success factors , 2015 .

[3]  Ali Vatankhah Barenji,et al.  Intelligent E-commerce logistics platform using hybrid agent based approach , 2019, Transportation Research Part E: Logistics and Transportation Review.

[4]  Weihua Liu,et al.  Pricing decisions for service platform with provider’s threshold participating quantity, value-added service and matching ability , 2019, Transportation Research Part E: Logistics and Transportation Review.

[5]  K. Plangger,et al.  It’s real, trust me! Establishing supply chain provenance using blockchain , 2019, Business Horizons.

[6]  S. Sethi,et al.  Dynamic Pricing, Production, and Channel Coordination with Stochastic Learning , 2015 .

[7]  Hai Yang,et al.  Pricing strategies for a taxi-hailing platform , 2016 .

[8]  Hau L. Lee,et al.  Unlocking the Value of RFID , 2007 .

[9]  Tsan-Ming Choi,et al.  Optimal Advertising Budget Allocation in Luxury Fashion Markets with Social Influences: A Mean-Variance Analysis , 2018, Production and Operations Management.

[10]  Joseph Sarkis,et al.  Blockchain technology and its relationships to sustainable supply chain management , 2018, Int. J. Prod. Res..

[11]  Alessandro Brun,et al.  A focused supply chain strategy for luxury fashion management , 2017 .

[12]  Yingli Wang,et al.  Making sense of blockchain technology: How will it transform supply chains? , 2019, International Journal of Production Economics.

[13]  Rahul C. Basole,et al.  Assimilation of tracking technology in the supply chain , 2016, Transportation Research Part E: Logistics and Transportation Review.

[14]  T. Choi,et al.  Peer-to-peer collaborative consumption for fashion products in the sharing economy: Platform operations , 2019, Transportation Research Part E: Logistics and Transportation Review.

[15]  T. Choi,et al.  Values of food leftover sharing platforms in the sharing economy , 2019, International Journal of Production Economics.

[16]  Tsan-Ming Choi,et al.  Advertising Strategies for Mobile Platforms With “Apps” , 2018, IEEE Transactions on Systems, Man, and Cybernetics: Systems.

[17]  Mark Stevenson,et al.  An exploratory analysis of counterfeiting strategies: Towards counterfeit-resilient supply chains , 2015 .

[18]  Xiaofeng Nie,et al.  Coordination in Supply Chains With Uncertain Demand and Disruption Risks: Existence, Analysis, and Insights , 2014, IEEE Transactions on Systems, Man, and Cybernetics: Systems.

[19]  Chen Wei,et al.  Location-based pricing and channel selection in a supply chain: a case study from the food retail industry , 2018, Ann. Oper. Res..

[20]  Xiang Li,et al.  Peer-to-Peer Product Sharing: Implications for Ownership, Usage, and Social Welfare in the Sharing Economy , 2019, Manag. Sci..

[21]  T. Choi.  Incorporating social media observations and bounded rationality into fashion quick response supply chains in the big data era , 2016, Transportation Research Part E: Logistics and Transportation Review.

[22]  Tsan-Ming Choi,et al.  Selling luxury fashion online with social influences considerations: Demand changes and supply chain coordination , 2017 .

[23]  Tsan-Ming Choi,et al.  Big Data Analytics in Operations Management , 2018 .

[24]  Yan Zhang,et al.  Equilibrium decisions for an innovation crowdsourcing platform , 2019 .

[25]  Marshall L. Fisher,et al.  Using Data and Big Data in Retailing , 2018 .

[26]  Xin Fang,et al.  Combating Strategic Counterfeiters in Licit and Illicit Supply Chains , 2015, Manuf. Serv. Oper. Manag..

[27]  Lei Xu,et al.  Carrot/stick mechanisms for collection responsibility sharing in multi-tier closed-loop supply chain management , 2019, Transportation Research Part E: Logistics and Transportation Review.