Abstract
Purpose - The aim of this paper is to propose a method for performance measurement of the livestock feed industry from an environmental and economic perspective. There is a knowledge gap both in the literature and society in the field of performance measurement of the livestock feed industry with environmental concerns. Livestock feed companies need support in the decision-making process to produce environmentally sustainable livestock feed at as low as possible costs.
Design/methodology/approach – An environmental performance index for livestock feed is constructed based on techniques of the min-max transformation, the analytic hierarchy process and simple additive weighting. The verified environmental performance index for livestock feed is brought into practice; different scenarios, which all represent a feed composition, are quantitatively compared to a benchmark feed composition. The environmental performance index is validated with an uncertainty analysis and sensitivity analysis.
Findings – The constructed environmental performance index for livestock feed is assessed by comparing nine scenarios against a benchmark feed composition. The results indicate that the environmental performance index for the livestock feed industry is technically feasible and effective to measure the performance of the livestock feed industry from an environmental and economic perspective.
Research implications – The constructed environmental performance index for
livestock feed can serve as a decision-making tool for livestock feed companies. As a response to climate regulations and a market pull, this paper provides a tool for livestock feed companies to select livestock feed compositions with the best performance based on environmental sustainability and economic performance.
Originality/value – A new performance measurement method is designed for an
environmental performance index for the livestock feed industry. From the literature, environmental sustainability variables are identified. The data on the environmental performance are obtained from a public database as well as a livestock feed company. The created index can contribute to decision-making in the livestock feed industry.