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A facility location problem for sustainability-conscious power generation decision makers.

Alireza Tajbakhsh1, Azam Shamsi2

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This study introduces a sustainability performance measurement system for businesses, integrating economic, environmental, and social factors. The new model significantly reduces greenhouse gas emissions and improves social performance in energy production.

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Area of Science:

  • Operations Research
  • Environmental Management
  • Sustainability Science

Background:

  • Performance measurement systems are crucial for business efficiency.
  • Integrating sustainability (economic, environmental, social) into decision-making is increasingly expected.
  • Assessing logistical locations requires a comprehensive sustainability approach.

Purpose of the Study:

  • To develop a supervisory framework for measuring sustainability performance of supplying facilities.
  • To evaluate logistical locations considering capacitated production levels using a two-phase assessment.
  • To establish sustainability-based policies for facility location problems.

Main Methods:

  • A two-phase assessment procedure was developed.
  • A double bootstrap data envelopment analysis model with undesirable factors was created for phase one.
  • Bias-corrected efficiency estimates from phase one were used in phase two to establish policies.

Main Results:

  • The model was applied to a US fossil fuel power plant case study.
  • Significant differences were observed when considering environmental and social impacts versus only financial outcomes.
  • The proposed approach substantially reduced greenhouse gas emissions with only slight increases in total expenses.

Conclusions:

  • The developed model effectively measures and improves sustainability performance in facility location.
  • Environmental efficiency, particularly greenhouse gas emission reduction, was substantially enhanced.
  • Social performance also showed dramatic improvement alongside environmental gains.