Financial analysis of residual vegetable oil reverse logistics on a Park Road, Brazil

Abstract

The objective of this study was to evaluate the reverse logistics of residual vegetable oil (RVO) in the restaurants on a Park Road in Brazil by identifying their waste disposal methods and analysis of the economic and financial ratio of four reverse channel scenarios proposed by the authors: (1) private-sector transformation of RVO into biodiesel; (2) transformation of RVO into biodiesel by local cooperatives and public administration; (3) RVO reused for soap production by the private sector; (4) RVO reused for soap production by local cooperatives and public administration. The methodology used was a qualitative and quantitative research. The questionnaire applied through personal interview was the method for data collection. The analysis of the results was supported by the capital budgeting techniques: net present value (NPV), internal rate of return (IRR) and discounted payback. To determine the economic risk of each scenario, the Monte Carlo method was used. The main results showed that there was a monthly production of 1,134 liters of RVO; reverse waste logistics achieve a high rate of adequate disposal, but some problems remain to be solved, such as periodicity of collection; lack of return to the local community and incentive for waste collection. Among the considered proposed scenarios to a better reverse logistics, the production of artisanal soap through a partnership with the public administration was predicted to perform best. In this scenario the estimated payback time of the invested capital was 3 years and 2 months.