Quantcast Economic Analysis Handbook - mo2130125

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3.
If there is no market, no further analysis is required.
4.
After receiving the market analysis report and the estimated sales
revenue from DRMO, the installation conducts an economic analysis to
determine if a QRP would be cost effective.
4.3.7.26 Determining Economic Feasibility.  Selling recyclable
material raises revenue, but it may not always be economical.  Costs of
running the program may exceed savings or revenue.  Therefore, do not
undertake a QRP without an economic analysis.  An economic analysis will help
decide the feasibility of establishing a qualifying recycling program.
4.3.7.27 Economic Analysis Handbook.  Figure 4-3-7B provides a
worksheet for documenting an economic analysis.  A sample economic analysis is
shown in Figure 4-3-7C.  For more information on methods for performing
economic analyses, see NAVFAC Publication P-442, Economic Analysis Handbook.
4.3.7.28 Assumptions.  Added costs are the increased time, effort,
and possibly equipment associated with removing a recyclable material from the
waste stream and subsequently preparing it for sale.  Avoided costs are
decreases in the costs of waste handling, hauling, and disposal by removing a
recyclable material from the waste stream.
4.3.7.29 Determining Avoided Costs.  Estimate avoided costs by
determining the weight or volume of each recyclable material diverted from the
waste disposal stream by the QRP.  Calculate tipping fees, surcharges, labor,
prorated maintenance, hauling fees, permit fees, and generator "taxes" that
are saved by recycling that quantity of material instead of disposing of it.
This may or may not be a significant factor, depending on the material.
4.3.7.30 Determining Revenue.  For each recyclable material,
estimate annual sales revenue.  Use DRMO market survey data for these
estimates.
4.3.7.31 Is a Recycling Program Economically Feasible?
The
qualifying recycling program is economically feasible if
added costs
<
avoided costs
+
revenue
4.3.8  Qualified Recycling Program (QRP).  Upon completion of the
economic analysis, the base commander of the installation shall decide
whether or not to establish a QRP.  Such a decision may be obvious when the
added costs are less than or much greater than the avoided costs and revenue.
If only a marginal difference exists, however, the decision may be more
involved and need consideration of intangible benefits like aesthetics,
employee morale, pollution abatement, availability of funds to meet the
deficit, and future outlook.  Any activity should be able to establish a QRP
based on capturing proceeds from recyclable materials already being turned in
to the DRMO.
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