Linear Activity Analysis of Production for Closed-Loop Businesses—Case Study of a Hungarian Apple Juice Factory

Abstract

In the context of closed-loop and integrated production systems Koopmans linear activity analysis of production provides a relevant method for decision makers. The benefit of the method is to consider alternative production technologies at a time and model multiple material flows (inputs and outputs, including waste/pollutants) as well. In this paper Koopmans theory is proposed for modeling the reduction of waste in closed loop production processes. The method of linear activity analysis provides flexibility to measure the amount of waste by setting limiting constraints justifying the purpose of the model. Based on these features the method can be used in the future for modeling Blue Economy type of businesses. The case study of a Hungarian apple juice factory compares the conventional/linear and the new/closed loop production model. Result in GAMS software yields notable outcomes for the closed-loop apple juice factory showing not only the reduction of waste and by-products, but the expansion of new value-added products and jobs at a profitable level.