Speaker: Talat Genc, University of Guelph, Ontario
We consider a novel closed-loop supply chain (CLSC) structure in which downstream manufacturer(M) faces different types of consumers while engaging in vertical relations with a supplier (S) in theupstream. The S invests in a a green component, and the M produces the final green product. Firms areable to diversify customer groups and meet their needs through investments, contracts, take-backs, anda variety of pricing options. Specifically, at the end of the supply chain there are three different demandgroups: "contract customers", "green customers", and "wholesale market customers". While the firrms execute the United Nations (UN) Sustainability Goals (SGs) of 7 and 9, the type 1 and type 2 consumersrespond to these SGs and fulfill the Goal 12 of "Responsible consumption" through their returns/take-backs, which play an important role in terms of firm profitability, consumer surplus, and environmental benefits. The main finding of this paper is that the SGs offered by the UN has important welfare-improvingopportunities in the CLSC. Among those of the UN SGs we identify that the Goals 7, 9, and 12 pertainingto industry innovation, affordability and clean product, and responsible consumption/production arehighly relevant for the firms operating in CLSC industries. We find that when all goals (Goals 9, 7,and 12) are applied, all parties, the CLSC firms and consumers, are better off compared to the caseunder which no SGs are applied. Furthermore, applying all goals is a Pareto-dominant strategy. That is,applying a subset of these goals or applying no SGs are dominated by application of all SGs.