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A Flexible Inventory Model for Municipal Solid Waste Recycling
Garrick Louis, Jhih-Shyang Shih
RFF Discussion Paper 02-48 | September 2002
RESEARCH TOPICS:
Abstract
Most of the United States have laws mandating the recycling of municipal solid waste (MSW). In order to comply, municipalities recycle quotas of materials, without regard to fluctuating prices. An inventory system is proposed that allows municipalities to be sensitive to materials prices as they recycle in accordance with state mandates. A dynamic model is developed; it uses historical secondary material prices as exogenous inputs to minimize the net present value of MSW recycling system cost. The model provides a cost-effective method for municipalities to achieve their MSW recycling targets. The savings is approximately $1.43 per ton of MSW generated based on total MSW management costs of $13.5 per ton. The model also allows one to investigate the effectiveness of various strategies for increasing the recycling rate. These strategies include: reducing the transportation cost for recyclables, supporting the market price of selected secondary materials, and landfill bans on selected materials. This model may also be used to investigate the effect of market price changes on the portfolio of materials held in inventory for recycling.
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