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Once the related fundamentals of decision theory, economic analysis, and econometrics modelling are established, the remaining chapters describe the entire process, the associated analytical techniques, and the design case studies for integrating consumer preference modeling into the enterprise-driven DBD …mehr.

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The retail price, a variable in the optimization, affects the percent choice share of the product via the customer preference model, and thus the number of packages of towels sold, see Section 3. There is not a noticeable difference in the manufacturing costs with virgin or recycled pulps assuming use of Northern Bleached Softwood Kraft for virgin pulp and De-Inked Pulp for recycled. The cost of investing in PEB is discussed below in Section 3.

This market size is assumed to be fixed. Because the market size excludes Wal-Mart sales, it is conservative. A towel package, which may have one roll or several, is assumed to contain 7. The strength, softness, absorbency, and price of these towel brands were measured at the University of Washington and are included in the appendix. This objective is calculated by first determining the GHG emissions of all competing brands before the firm enters the market and subtracting them from the GHG emissions of the market after the firm enters.

Publically available data inventorying product lifecycle GHG emissions for virgin or recycled paper towels made in North America is sparse, but there are two studies of note.

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Franklin Associates Ltd. In order to represent GHG emissions as a continuous function of recycled paper content, a linear interpolation is taken between the two extremes of This linear representation is done largely for simplicity and lack of richer data. Still, because a large amount of GHG emissions come from lifecycle stages before the pulp streams are mixed—for example, in collecting, treating, and deinking the recycled pulp, and pulping the virgin pulp [33, 34]—a linear representation is likely a sufficient approximation. For example, increasing the recycled paper content in paper towels may cause people to feel they can use them more liberally, therefore increase the number of towels used, thus partially or wholly negating the positive effects of including recycled paper content.

The survey framework, analysis and results were previously reported in [36] and are explained extensively in [37]. The survey sample size of individuals and the implementation of an out-of-the-box statistical analysis package are akin to a mini-study that a company would do to see if further investment of funds in a more sophisticated study is warranted. Customer preferences are represented using a latent class model, which is a mixed-logit model with a discrete distribution of preferences [4].

The parameters , , and subsequently , , represent the probability that respondent, , is in latent class before and after activation of PEP. This particular approach allows the model to account for heterogeneity of customer preferences while also distinguishing discretely between customers with pro-environmental preferences PEP and those without, which is integral to the implementation of the overall optimization model.

The initial indication that there was a distinct group of customers with PEP came from responses to the customer survey, as discussed below. We make an important distinction between a pro-environment attitude and a pro-environment preference.

This study uses the machinery of decision models willingness to pay, choice, data analyses that decompose utility into additive components, etc so we are in the traditional domain of preference. Preferences as operationalized by choice are influenced by attitudes, but this study did not directly measure pro-environment attitudes.

The estimated part-worth utility for the three groups are detailed in Table 1: the higher the utility for a configuration, the stronger the preference. The scale is not absolute—negative numbers do not necessary imply a non-preferred attribute, and the utility values cannot be directly compared between the classes [5]. Pooled standard error on the estimated coefficients is also reported, but is not included in the subsequent analysis.

An optimization model that includes uncertainty could account for the pooled standard error to some degree. Other estimations approaches could be used to provide more robust standard errors or even unpooled standard errors. Their estimated preferences indicate they were interested in buying towels with recycled paper content and valued this attribute at a utility scale similar to the other attributes presented in the survey, as indicated in Table 1. However, only 2 out of the respondents in this group purchased towels with recycled content the last time they went shopping. Respondents in the other two groups behaved consistently with their survey responses in this attribute.

In another part of the survey, many Traders incorrectly reported the recycled paper content of the towels they purchased. Near the end of the survey, respondents were asked to write-in a price for a paper towel that had no recycled paper content. If the respondent indicated that they would not purchase this towel for any price, no matter how low, they were asked to write-in an explanation as to why. The latent class framework allowed for the independent identification of a set of preferences for this group of respondents, as forty-eight of them are assigned to the same latent class, the Traders.

In the product design optimization model, strength, softness, and absorbency are represented as discrete utility categories, while levels for recycled paper content and price are modeled continuously; see the appendix for further model details. The discrete categories for product performance were created because the survey collected responses for three levels of each attribute with a corresponding quantitative description, i.

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This is left for future work as it will require linking qualitative customer measurements to quantitative values, for example via customer trials [38, 39]. The low sales volume is not only due to preference, but also to externalities such as low availability. These types of conditions make a hybrid model difficult to fit [4]. But most importantly, it is not our intent to eliminate the discrepancy between survey and market preferences, but instead view it as an insight as to how the Traders could behave in the market, given an appropriate purchase context.

There is thus an opportunity to activate the PEP that the Traders exhibited in the survey in the real world. The objective of activating these preferences is to create demand for recycled paper towels, to both reduce GHG emissions, and, potentially, increase firm profit. The model assumes that the ability to define and control this context is dependent on the amount of money the firm spends to research the activation of PEP. Activating PEPs will require capital investment. Instead, they have an equal probability of behaving as a PickUp or a Saver.

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  • While it is noted that there is no representation of time in the model, investment in PEB could be viewed as accelerating the adoption process that would occur over time. In industry, the form of Eq. More detailed approaches exist, for example, web retail stores can run marketing and promotional experiments for example, offering a free warranty to some web visitors and track purchases and clicks to see which ideas to invest in further, including an accurate prediction of return on investment.

    Google and Amazon frequently run experimental modifications to their websites to understand the financial impact of design modifications. In the results, Fig. For a detailed review of the relationship between these determinants and the final product, refer to [37].

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    This model holds manufacturing process and additives constant, and focuses on pulp selection. The two pulps assumed to be available are Northern Bleached Softwood Kraft, what this article refers to as virgin pulp, and De- Inked Pulp, what this article refers to as recycled pulp. Recycled pulp is less flexible than virgin pulp; and flexibility allows for a strong, yet soft towel. Also, recycled pulp contains a larger percentage of fines, small pieces of fiber, than virgin pulp. Fines are created by the processing used to create recycled pulp, and have different characteristics than pulp fibers: they have a high surface area that improves drainage of water from pulp, they increase bonding between fibers to a point , and improve opacity.

    They also can increase strength, but therefore also increase stiffness and decrease softness. Too many fines also lead to a weakly bonded fiber network. As detailed in [37], technical performance of tissue products such as paper towel is daunting to model computationally. Competition amongst firms is fierce, and modeling work is carefully guarded and unpublished.

    Therefore, we built an empirical model to determine the relationship between pulp consistency percentage of virgin and recycled pulps and technical performance. The engineering model includes assumptions and data not detailed here; they are offered in [37] and in the appendix. Product repair is a suggested post-purchase activity toward extending the useful lifespan of a product.

    However, repairability has not received…. Environmental Impacts of Industry 4. Optimal Sorting Policies in Remanufactur The quality of used products returned to recovery facilities is often highly uncertain. Quality grading and sorting policies are immediate… more. Environmental Evaluation of Product Desi Consumers might be willing to repair their broken devices as long as the associated repair costs do not exceed an… more. The current status of the consumer elect Consumer electronics are turning into consumable devices nowadays, and consumers generally show little inclination to repair broken products due to… more.