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Sustainability Concept in Decision-Making: Carbon Tax Consideration for Joint Product Mix Decision

Author

Listed:
  • Wen-Hsien Tsai

    (Department of Business Administration, National Central University, No. 300, Jhongda Rd., Jhongli, Taoyuan 32001, Taiwan)

  • Jui-Chu Chang

    (Department of Business Administration, National Central University, No. 300, Jhongda Rd., Jhongli, Taoyuan 32001, Taiwan)

  • Chu-Lun Hsieh

    (Department of Business Administration, National Central University, No. 300, Jhongda Rd., Jhongli, Taoyuan 32001, Taiwan)

  • Tsen-Shu Tsaur

    (Department of Business Administration, Fuzhou University of International Studies and Trade, Fuzhou 350202, Fujian, China)

  • Chung-Wei Wang

    (Department of Business Administration, National Central University, No. 300, Jhongda Rd., Jhongli, Taoyuan 32001, Taiwan)

Abstract

Carbon emissions are receiving greater scrutiny in many countries due to international forces to reduce anthropogenic global climate change. Carbon taxation is one of the most common carbon emission regulation policies, and companies must incorporate it into their production and pricing decisions. Activity-based costing (ABC) and the theory of constraints (TOC) have been applied to solve product mix problems; however, a challenging aspect of the product mix problem involves evaluating joint manufactured products, while reducing carbon emissions and environmental pollution to fulfill social responsibility. The aim of this paper is to apply ABC and TOC to analyze green product mix decision-making for joint products using a mathematical programming model and the joint production data of pharmaceutical industry companies for the processing of active pharmaceutical ingredients (APIs) in drugs for medical use. This paper illustrates that the time-driven ABC model leads to optimal joint product mix decisions and performs sensitivity analysis to study how the optimal solution will change with the carbon tax. Our findings provide insight into ‘sustainability decisions’ and are beneficial in terms of environmental management in a competitive pharmaceutical industry.

Suggested Citation

  • Wen-Hsien Tsai & Jui-Chu Chang & Chu-Lun Hsieh & Tsen-Shu Tsaur & Chung-Wei Wang, 2016. "Sustainability Concept in Decision-Making: Carbon Tax Consideration for Joint Product Mix Decision," Sustainability, MDPI, vol. 8(12), pages 1-22, November.
    • Handle: RePEc:gam:jsusta:v:8:y:2016:i:12:p:1232-:d:83821
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    References listed on IDEAS

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    Cited by:

    1. Wen-Hsien Tsai, 2018. "A Green Quality Management Decision Model with Carbon Tax and Capacity Expansion under Activity-Based Costing (ABC)—A Case Study in the Tire Manufacturing Industry," Energies, MDPI, vol. 11(7), pages 1-30, July.
    2. Wen-Hsien Tsai & Shu-Hui Lan & Cheng-Tsu Huang, 2019. "Activity-Based Standard Costing Product-Mix Decision in the Future Digital Era: Green Recycling Steel-Scrap Material for Steel Industry," Sustainability, MDPI, vol. 11(3), pages 1-30, February.
    3. Wen-Hsien Tsai & Shi-Yin Jhong, 2018. "Carbon Emissions Cost Analysis with Activity-Based Costing," Sustainability, MDPI, vol. 10(8), pages 1-26, August.
    4. Wen-Hsien Tsai & Po-Yuan Chu & Hsiu-Li Lee, 2019. "Green Activity-Based Costing Production Planning and Scenario Analysis for the Aluminum-Alloy Wheel Industry under Industry 4.0," Sustainability, MDPI, vol. 11(3), pages 1-20, February.
    5. Dolores Gallardo-Vázquez & Flavio Hourneaux Junior & Marcelo Luiz Dias da Silva Gabriel & Luis Enrique Valdez-Juárez, 2021. "On Earth as It Is in Heaven: Proxy Measurements to Assess Sustainable Development Goals at the Company Level through CSR Indicators," Sustainability, MDPI, vol. 13(2), pages 1-20, January.

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