It becomes a financial burden once the machine costs more than profit gained from deposits on sold cans.
Having difficulty estimating the cost of a machine? Here’s what I typically do in such cases: I imagine a product that’s definitely cheaper (such as a computer, say $1000) and a product that’s definitely more expensive (like a car, say $30.000) and go somewhere in between, so ca. $15.000. Technical note: What does ‘in between’ mean here? The number $15.000 is the arithmetic mean, but a better estimate would be the geometric mean — ask Karsten after the webinar if you’re curious why.
Here’s the basic formula I used: (cans per yr sold) = (cans per customer) × (#customers/min/register) × (#registers) × (#minutes/yr that store is open) and then matched the profit from that with the cost of a machine.
I assume the machine cost E10.000 and could be used for 5 years before replacing, so E2.000 p/yr. I’m neglecting price discounting, inflation, loan interest etc. The profit from cans sold is ca.: (1 can p/p) × (1 customer/5 min / registers) × (1 registers) × (10×60×250) × (E0,10) = E3.000 p/yr. So even a small store with just one register could easily afford a machine. That being said, an initial investment of the E10.000 is of course substantial. However, most of the numbers I used were pessimistic (e.g. after checking this online, deposit machines are actually frequently more affordable at 6000-7000 for a new model from a well-known brand).
How much money does a (Munich-sized) city save on a yearly basis, if the can deposit system were to be implemented? Feel free to narrow down your question to one aspect, such as only trash collection.
One argument that has been raised in the US debate against introduction of a deposit system has been the possibility of ‘can fraud’ — people that would cross city- or state-lines to collect the deposit if there is not a deposit system where they live. Obviously, this comes at the cost of the city/state with the deposit system. Is this argument as ridiculous as it sounds, or does it have merit? Use a Fermi calculation, assuming Munich were to implement deposits on cans (but not any of the surrounding villages).
2020-05-23T13:09:32+00:00Uncategorized|