The Use of Prospect Theory for Energy Sustainable Industry 4.0

Abstract

Industry 4.0 challenges facilities entrepreneurs to be competitive in the market in terms of energy by rational decision making. The goal of the paper is aimed at introducing Prospect Theory (PT) in Industry 4.0 for making decisions in order to select an optimal energy technology. To reach this goal, an approach for decision making on energy investment has been developed. In this paper, the authors have also provided a new opportunity to apply the new decision making method for strengthening Industry 4.0 by addressing energy concerns based on which rational decisions have been made. The study uses a fuzzy analytical hierarchy process for weighting the evaluation sub-criteria of energy technologies and a modified PT for making decisions related to the selection of one of the investigated technologies. The results show that it is possible to implement PT in Industry 4.0 via a decision making model for energy sustainability. Decision probability was achieved using a behavioral approach akin to Cumulative Prospect Theory (CPT) for the considered technology options. More specifically, the probability has created the same threshold-based decision possibilities. The authors used the case study method based on a company located in North America which produces hardwood lumber. The company uses a heating system containing natural gas-fired boilers. This study has also contributed to the literature on energy sustainable Industry 4.0 by demonstrating a new phenomenon/paradigm for energy sustainability-based Industry 4.0 through using PT. In this context, the main motivation of writing the article has been to promote energy sustainability via complex mechanisms and systems that involve interrelated functions.

Integrated Estimation of a Cyber-Physical System’s Sustainability

“…The findings demonstrate that the main CPS properties, mentioned above in Section 3.1.3: «high power consumption» and «creation product value» are reflected, respectively, in the blocks «Technical sustainability and benefits» and «Economic sustainability & benefits», supposed by the authors of the work [35] for assessment of energy 4.0 sustainability. In our research this aspect is given important attention, but it is not the only one.…”

“…Besides, we consider, that the proposed indicator for assessing CPS sustainability-"CPS energy efficiency ratio (index)" (in Section 3.2.2) is a comprehensive indicator that allows estimation of the level of both the current and target state of the "Technological sustainability and benefits" aspect of energy sustainability based on Industry 4.0, considered in [35]. In general, the results of the study serve as the development of scientific provisions on the use of prospect theory in the field of ensuring sustainable development of subjects in the context of Industry 4.0, taking into account energy efficiency.…”

“…Analysis of special literature [31][32][33][34][35][36][37] has allowed us to identify the following main elements of the CPS:…”

“…Analysis of [23,[33][34][35][36][37][38][39][40] on the topic under consideration allowed us to summarize the fundamental properties of cyber-physical systems that should be taken into account while designing the functioning of cyber-physical systems. There main ones are sustainability, self-programming, adaptability, autonomy, efficiency, functionality, seamlessness, reliability, ability to self-study, usability, transparency, friendliness to human environment, fast speed of functioning and adaptation to environmental changes, complexity (number of incoming components), high power consumption, creation product value, and economic value-added.…”

Critical success factors for the implementation and management of energy cloud environments

“…This new energy management system is called Smart Energy by the authors Sitt on-Candanedo et al 9 and Sheikhi et al, 10 Cloud-based Energy Management Systems by the authors Govindarajan et al, 11 Energy Management-as-a-Service by the authors Al Faruque et al 12 and Chen et al, 13 Energy 4.0 by the authors Kluczek et al, 14 Internet of Energy (IoE) by the authors Mohammadian et al, 15 Energy Cloud 4.0 by the authors Lawrence et al, 16 Energy Cloud by the authors Schaefer et al 17 and de Carvalho et al, 18 in addition to other nomenclatures used in the literature. In this article, Energy Cloud (EC) nomenclature will be used.…”