Page 184 - Solid Waste Analysis and Minimization a Systems Approach

162 THE GENERAL APPROACH FOR A SOLID WASTE ASSESSMENT

After the initial investment has been calculated, the reoccurring costs, savings, and
revenues from the waste minimization alternative must be determined. The concept is
to reduce waste disposal and raw material costs based on the implementation of the
alternative under analysis. For example, if a company considers the installation of a
cardboard baler, the annual operating costs of the baler (such as labor and utilities),
the annual cost savings from reduced disposal costs, and the revenue from the sale of
the baled cardboard must be considered. Reducing or avoiding present and future
operating costs associated with solid waste storage and removal are critical elements
of the solid waste minimization process. Due to increased solid waste disposal costs
(around $30–$80 per ton in the United States); many companies are finding that the
cost of waste management has become a significant factor in their cost structures.
Some common reoccurring costs include

■ Reduced solid waste disposal costs—Waste generation is reduced or diverted to
recycling streams, resulting in less waste being sent to the landfill for disposal and
lower hauler charges. These include disposal fees, transportation costs, and predis-
posal treatment costs.
■ Input material cost savings—Options that reduce scrap, reduce waste, or increase
internal recycling tend to decrease the demand for input materials.
■ Changes in utility costs—Utility costs may increase or decrease depending on the
installation, modification, or removal of equipment.
■ Changes in operating and maintenance labor/benefits—An alternative may increase
or decrease labor requirements and the associated benefits. This may be reflected as
changes in overtime hours or as the number of employees.
■ Changes in operating and maintenance supplies—An alternative may result in
increased or decreased operating and maintenance supply usage.
■ Changes in overhead costs—Large projects may increase or decrease these values.
■ Changes in revenues for increased (or decreased production)—An alternative may
result in an increase in the productivity of a unit. This will result in changes in
revenue.
■ Increases in revenue from by-products—An alternative may generate a by-product
that can be sold to a recycler or sold to another company as raw material. This will
result in increased revenue.

It is suggested that savings in these costs be taken into consideration first, because
they have a greater impact on the project economics and involve less effort to estimate
reliably. The remaining elements usually have a smaller impact and should be included
in an on-needed basis or to fine-tune the analysis.
A project’s profitability is measured by estimating the net cash flows each operat-
ing year over the life of the project. A net cash flow is calculated by subtracting the
cash outlays from the cash incomes starting in year zero (the year the project is initi-
ated). Figure 8.25 is an example of a cash-flow diagram.
If a project does not have an initial investment, the project’s profitability can be
judged by whether an operating cost savings occurred or not. If such a project reduces
overall operating costs, it should be implemented. For example, suppose an organization