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Dynamic Resource Application for Sustainable Technology Implementations

Government environmental regulations, along with increasing awareness and demand from customers for firms to be sustainable, are driving firms to implement new technologies to enhance the sustainability practices of their firms. Given a finite implementation horizon and a target improvement level, a project manager must decide when to apply resources to a project. We develop an optimal control model to specify when to apply resources under different operating cost differentials, taking into account resource cost. We find that technologies that are more efficient are optimally implemented with a front-loaded schedule to achieve cost savings quickly. Conversely, technologies that are more expensive, but mandated, are ideally implemented on a back-loaded schedule.