A Simulation Approach to Achieve Balancing Profitability and Environmental KPIs

Manufacturing companies are required to operate sustainably while maximizing profit. The complex and varying environmental regulations across the supply chain compound this challenge. To respond effectively, timely evaluation of the environmental, sales, and manufacturing measures in a collaborative, cross-divisional manner is needed. This paper proposes a novel approach using simulation modeling and optimization to address this challenge. We demonstrate the effectiveness of this method through a case study of a company operating in California, a region with stringent environmental regulations. Our findings show that this approach enables manufacturers to optimize production and sales measures while adhering to diverse environmental regulations, ultimately promoting profitability and sustainability.