A firm is comparing two designs for a new product. Data concerning the design for disassembly for both designs are provided in the tables below
Which design appears to be the best environmental design based on revenue retrieval opportunity?
Design 1:
Component Resale Revenue per Unit Recycling Revenue per Unit Processing Cost per Unit Disposal Cost per Unit
A $5.60 $8.90 $3.50 $2.85
B $2.56 $3.67 $3.25 $4.00
C $1.34 $4.32 $0.69 $3.34
Design 2:
Component Resale Revenue per Unit Recycling Revenue per Unit Processing Cost per Unit Disposal Cost per Unit
A $4.76 $5.68 $6.00 $2.13
B $3.21 $5.28 $2.42 $3.59
C $5.31 $6.98 $2.47 $4.90
Design 1:
resale revenue per unit = $9.50, and recycling revenue per unit = $16.89, processing cost per unit = $7.44, disposal cost per unit = $10.19
Revenue retrieval for Firm 1 = $9.50 + $16.89 - $7.44 - $10.19 = $8.76
Design 2:
resale revenue per unit = $13.28, and recycling revenue per unit = $17.94, processing cost per unit = $10.89, disposal cost per unit = $10.62
Revenue retrieval for Firm 1 = $13.28 + $17.94 - $10.89 - $10.62 = $9.71
Therefore, with the higher revenue retrieval opportunity, Design 2 appears best.
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