Green Activity-Based Costing Production Decision Model for Recycled Paper

Abstract

Using mathematical programming with activity-based costing (ABC) and based on the theory of constraints (TOC), this study proposed a green production model for the traditional paper industry to achieve the purpose of energy saving and carbon emission reduction. The mathematical programming model presented in this paper considers (1) revenue of main products and byproducts, (2) unit-level, batch-level, and product-level activity costs in ABC, (3) labor cost with overtime available, (4) machine cost with capacity expansion, (5) saved electric power and steam costs by using the coal as the main fuel in conjunction with Refuse Derived Fuel (RDF). This model also considers the constraint of the quantity of carbon equivalent of various gases that are allowed to be emitted from the mill paper-making process to conform to the environmental protection policy. A numerical example is used to demonstrate how to apply the model presented in this paper. In addition, sensitivity analysis on the key parameters of the model are used to provide further insights for this research.

Equilibrium between Environmental and Economic Objectives: An Activity-Based Costing Approach Application for Carbon Emissions Management in the Aluminum Alloy Wheel Industry

“…Furthermore, Fahimnia and Eshragh [44] developed a tactical supply chain planning model that merges economic goals with carbon emission objectives within a carbon taxation policy. Over the last two decades, numerous scholars have integrated environmental considerations into mathematical programming techniques to evaluate product portfolio choices [45][46][47][48][49][50]. (This study showcases the successful integration of ABC and TOC methodologies, which differ in their orientations-the former being more comprehensive and suited for long-term planning and the latter more focused and immediate.…”

Advancing Decarbonization Efforts in the Glass Manufacturing Industry through Mathematical Optimization and Management Accounting

“…This research seeks to fill the literature gap on the use of advanced costing methods, like ABC and the TOC, combined with carbon reduction strategies in the glass industry. It aims to enhance cost allocation precision and optimize production for environmental sustainability, offering insights into aligning industry practices with the global decarbonization agenda [48][49][50][51][52][53][54][55]. This approach underscores the potential synergies between ABC, the TOC, and carbon reduction practices, marking a significant advancement in sustainable industrial practices within the glass sector.…”

The Role of Green Activity-Based Costing in Achieving Sustainability Development: Evidence From Iraq

“…In the standard accounting system, however, it is linked with other cost initiatives rather than independently verified and measured (Tsai & Lai, 2018). In contrast to other nations, where environmental expenditures are often accounted for as "manufacturing costs," they are typically accounted for as "management fees" and other initiatives in the United States, rather than being independently recognized and assessed (Hsieh et al, 2020). In the past, environmental awareness was not taken seriously, and there were no internal or external transparency requirements for environmental costs (Al Mashkoor, 2022).…”

“…Environmental management issues have been connected to the economy in recent years due to the fact that all manufacturing and consumption activities have some sort of negative effect on the environment during the creation, use, and disposal phases of their respective value chains (Abass et al, 2022). Stakeholders are urging or requiring organizations to be more ecologically conscientious with respect to their products and operations for a variety of reasons, including compliance with regulations, sustainable consumption, public perception, and potential competitive benefits (Hsieh et al, 2020). Many facility owners and managers are looking into using aqueous degreasers and powder coatings as alternatives to traditional cleaning solvents and paints in an effort to cut down on harmful air emissions and manage the costs associated with treating contaminated effluent (Nikkeh et al, 2022).…”