Using simulation with a logit choice model to assess the commercial feasibility of an advanced environmental technology

A critical issue in advanced technology product development is assessing economic feasibility based on the potential for commercial success. This is particularly difficult for an environmental product that has intangible benefits such as reduced air emissions. Corporate confidentiality compounds this problem since many of the target customers of the new product do not allow product developers to access important process, cost, and environmental operating information. The paper describes the application of simulation to enhance the power of a choice model to evaluate the feasibility of an advanced environmental technology for the metal casting industry. Using simulated industry data that describes the critical operating and environmental characteristics of lead technology adapters, a binary logit choice model estimates the probability of commercial success for the new technology. This methodology has application to the general problem of assessing the intangible benefits of advanced technology and contributes to the literature describing the interdisciplinary use of simulation to enhance decision science modeling