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Inducing Green Behavior In A Manufacturer

Author

Listed:
  • Andrew Manikas
  • Michael Godfrey

Abstract

The triple bottom line (economic, environmental, and social performance) is an important approach to long-term sustainability of a manufacturing company. However, a manufacturer will always feel pressure to focus on the economic bottom line and to give at least equal importance to the second and third bottom lines (environmental and social performance). As environmental issues become more important to citizens, they demand enhanced environmental performance from companies by exerting pressure on public policy makers to enact regulations, taxes, permits, and penalties that motivate companies to improve their environmental performance. We present a model that could be used by governmental policy makers to predict the effects from reducing the number of emissions permits and increasing the penalties for exceeding allowable emission limits. Our model is for a product that has a limited selling season. We propose a newsvendor model to estimate a manufacturing company’s optimal production quantity based on maximization of expected profits given the cost of emission permits and penalties for exceeding emission limits allowed by the permits. In addition, the newsvendor model provides insights to policy makers on the effects of adjusting the regulatory levers of emission permits and penalties.

Suggested Citation

  • Andrew Manikas & Michael Godfrey, 2010. "Inducing Green Behavior In A Manufacturer," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 4(2), pages 27-38.
    • Handle: RePEc:ibf:gjbres:v:4:y:2010:i:2:p:27-38
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    Citations

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    Cited by:

    1. Shuai Jin & Yifei Niu & Liuwei Zhao, 2022. "Optimal purchase planning of initial emission permits with the paid use and trading system based on mean–variance model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2409-2420, September.
    2. Andrew Manikas & Michael Godfrey, 2018. "A Spreadsheet Approach For Incorporating Actual Motor Carrier Freight Rates And External Environmental Costs In A Newsvendor Model," International Journal of Management and Marketing Research, The Institute for Business and Finance Research, vol. 11(1), pages 55-72.

    More about this item

    Keywords

    Triple Bottom Line; Manufacturing; Sustainability; Green;
    All these keywords.

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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