Allocation in joint production is still one of the unresolved and often discussed methodological issues in Life Cycle Inventory Analysis. Using the many years of experience of man agement sciences, a new classification scheme is proposed. It is postulated that companies perform allocation in joint production in view of optimising the products’ performance (economic and/ or environmental), which helps them to maximise their profits. Therefrom it is derived that value judgements and negotiations are inevitable. The proposed classification scheme differentiates between the number of decision-makers involved, and the type of markets for joint products. Several decision-makers have to find fair allocation factors for their commonly operated joint production, whereas individual decision-makers may choose allocation factors considering the (economic and/ or environmental) competitiveness of their joint products. Applied on the case of a small-scale gas-fuelled combined heat and power plant, the methodology proposed shows a strong dependency on the disutility function, i.e., private costs, environmental damage costs or a combination of the two.