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Sustainability 2016, 8(12), 1232; doi:10.3390/su8121232

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

1
Department of Business Administration, National Central University, No. 300, Jhongda Rd., Jhongli, Taoyuan 32001, Taiwan
2
Department of Business Administration, Fuzhou University of International Studies and Trade, Fuzhou 350202, Fujian, China
*
Author to whom correspondence should be addressed.
Academic Editor: Giuseppe Ioppolo
Received: 22 September 2016 / Revised: 15 November 2016 / Accepted: 17 November 2016 / Published: 26 November 2016
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
View Full-Text   |   Download PDF [747 KB, uploaded 20 December 2016]   |  

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. View Full-Text
Keywords: carbon tax; time-driven activity-based costing (TDABC); mathematical programming; joint product mix; theory of constraints (TOC); sustainability decision-making carbon tax; time-driven activity-based costing (TDABC); mathematical programming; joint product mix; theory of constraints (TOC); sustainability decision-making
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Tsai, W.-H.; Chang, J.-C.; Hsieh, C.-L.; Tsaur, T.-S.; Wang, C.-W. Sustainability Concept in Decision-Making: Carbon Tax Consideration for Joint Product Mix Decision. Sustainability 2016, 8, 1232.

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