Waste disposal and waste avoidance

Waste disposal and waste avoidance are examined from two different perspectives, from the point of view of the waste 'producing' company on the one hand, and from the point of view of the waste disposing company on the other hand. The idea of the basic model lies in the 'turning upside down' of the lot-sizing approach to inventory control theory. We derive a corresponding formula for disposal that shows that the number of waste disposals depends positively on the waste accumulation rate and negatively on the fixed costs for a pick-up. Moreover, we formally work out at which waste avoidance costs a company will enlist the services of a disposal company. Specifically, disposal tends to be preferred to avoidance when waste-avoidance is relatively expensive and three cost rates to be specified are relatively low. Finally, we take the perspective of a monopolistic disposal company that has to decide on the optimal pricing policy. In our model, we determine that the price for a pick-up should be chosen just to cover costs. The disposal company can earn a profit by the suitable choice of the price per unit waste to be disposed of.