An Investigation of Sustainability, Preference, and Profitability in Design Optimization

Abstract

Customer preferences for sustainable products are dependent upon the context in which the customer makes a purchase decision. This paper investigates a case study in which fifty-five percent of survey customers say they prefer recycled paper towels, but do not purchase them. These customers represent a profit opportunity for a firm. This paper explores the impact of investing capital in activating pro-environmental preferences on a firm’s profitability and greenhouse gas (GHG) emissions through a multi-objective optimization study. A product optimization is designed to include models of carbon dioxide emissions, manufacturing costs, customer preference, and technical performance. Because the optimization includes a tradeoff between recycled paper and performance, a model of customer preferences, and a market of competing products, the maximum GHG reduction occurs at less than 100% recycled paper. Also, the tradeoff between GHG reductions and profit is not dictated by the configuration of the product, but instead by its price. These results demonstrate the importance of including customer preferences with engineering performance in design optimization. Investment in the activation of pro-environmental preferences is high at all points on the Pareto optimal frontier, suggesting that further engineering design research into the activation of pro-environmental product preferences is warranted.