Interior analysis of the green product mix solution

John F. Wellington, Alfred L. Guiffrida and Stephen A. Lewis

European Journal of Operational Research, 2014, vol. 237, issue 3, 966-974

Abstract: When modeling optimal product mix under emission restrictions produces a solution with unacceptable level of profit, analyst is moved to investigate the cause(s). Interior analysis (IA) is proposed for this purpose. With IA, analyst can investigate the impact of accommodating emission controls in step-by-step one-at-a-time manner and in doing so track how profit and other important features of product mix degrade and to which emission control enforcements its diminution may be attributed. In this way, analyst can assist manager in identifying implementation strategies. Although IA is presented within context of a linear programming formulation of the green product mix problem, its methodology may be applied to other modeling frameworks. Quantity dependent penalty rates and transformations of emissions to forms with or without economic value are included in the modeling and illustrations of IA.

Keywords: Linear programming; Product mix problem; Implementation strategy; Sustainability; 0/1 Mixed integer programming (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:237:y:2014:i:3:p:966-974

DOI: 10.1016/j.ejor.2014.02.029

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