Imagine that you are the environmental management team leader for a manufacturing plant. Your P2 team has decided that reducing solvent waste from parts washing will be the next P2 project. Solvents are used to clean grease off of parts and tools. In the process, a large quantity of hazardous waste is generated and employees are exposed to hazardous substances. Review these two case studies: Reducing Solvent Use from Parts Washing by the University of Nebraska and New Parts Cleaning Systems Eliminate Hazardous Waste (Links to an external site.) from the state of Connecticut DEEP, then answer the following questions.
1.) What basic cost categories would your P2 team need to consider in an assessment of financial feasibility? Refer to the box below from page 9 of: US EPA's Introduction to Environmental Accounting as a Business Management Tool: Key Concepts and Terms to help you brainstorm.
2.) Where could your team look to find the cost data for these categories? How do you think you would track down the data you need to do your analysis? Try not to list a cost category without also proposing how you could figure it out.
The basic cost categories that my P2 team needs to consider is an assessment of financial stability is the Conventional Costs, Potentially Hidden Costs, contingent costs and image and relationship costs. The P2 team must first consider the conventional costs. These are the cost of capital equipment, materials, labor, supplies, utilities, structures, and salvage value.
Cost Data; First, we consider the cost of capital equipment, materials, labor, supplies, utilities, structures, and salvage value. We begin with the manufacturer of dishwasher type unit for cleaning the parts. The manufacturer will give the P2 team the cost of the unit. This will be the cost of capital equipment. In addition, the manufacturer of dishwasher type unit for cleaning parts will ...
This solution explains how environmental costs are identified for a P2 project. The sources used are also included in the solution.