Grey input–output analysis and its application for environmental cost allocation

Abstract

Deterministic input–output analysis has been applied to solving a variety of economic problems. Nevertheless, uncertainty plays an important role in decision-making and should be properly addressed in future input–output analysis. This study therefore describes a method of including systematic parameter uncertainties in an input–output model and develops its solution procedure using the genetic-algorithm-based (GA-based) grey mathematical programming technique as a tool. In particular, the model for assessing the impacts of recent pollution charges and water resource fees to a textile-dyeing factory is formulated and solved for the purpose of illustration. To account for the gross impact from systematic variations, most parameters are expressed as interval expressions as that are frequently used in the grey systems theory. Research findings indicate that the grey input–output analysis is an applicable tool to evaluate various environmental cost impacts influential for corporate production planning and management.