Reducing Information Asymmetry in the Closed-Loop Supply Chain: Conceptualizing and Measuring Perceived Quality of Remanufactured Products

Remanufacturing is the cornerstone of closed-loop supply chains (CLSCs) and enables the reclamation and reconstitution of resources and value. The quality of remanufactured products has been shown to be a key factor that influences how remanufacturers choose to manage operations, how retail firms position remanufactured products in the marketplace, and how consumers judge the value of such products. Unfortunately, the quality of remanufactured products is generally misunderstood. Subsequently, perceived quality of remanufactured products is commonly miscommunicated across the echelons of the CLSC (e.g. consumers, remanufacturers, and retailers). This is due, in part, to a lack of understanding regarding what constitutes “quality” in the context of a remanufactured product. As a first step toward allaying information asymmetry across the CLSC, this study develops the perceived quality of remanufactured products (PQRP) construct and associated measure. A rigorous instrument development process was adopted, consisting of five sequential data-collection efforts. PQRP is found to be a multidimensional construct based on four underlying factors: lifespan, features, performance, and serviceability. Using data from the validity studies, PQRP is shown to be a significant predictors of consumer purchase intention. The results of this study can be used to inform research in this area by providing a content valid and reliable instrument with which to consistently assess PQRP. For practice, this study offers insight into salient PQRP factors, which provides remanufactures and retailers with a means by which to communicate quality expectations and standards, as well as germane information with regard to pertinent attributes that should be emphasized to optimize processes and maximize profits.