The waste management supply chain: A decision framework

Abstract

ABSTRACTThe alarmingly increasing trends in worldwide waste generation call for a holistic analysis of waste management supply chains. Using a comprehensive end‐to‐end (i.e., waste generation to waste disposal) decision framework, this article analyzes key decisions of a waste management firm (WMF) focused on the proportions of dry (and wet) waste to recycle (and compost). This framework is applied to assess the impact of: (i) the preprocessing of generated waste at source (i.e., the “upstream factors”) and (ii) the market prices of recycled dry and composted wet wastes (i.e., the “downstream factors”) on WMF's decisions. One key insight is that the WMF will choose to process more waste when the market prices for processed wastes are high, and/or when more waste is preprocessed at source. Improvements in presorting can be more economical and offer a long‐term sustainable solution to efficient waste management. From a policy perspective, we observe that taxing a WMF for waste disposal could dissuade the WMF from participating in waste processing especially when its marginal processing costs are high. The decision framework and the corresponding model are calibrated to different world regions using secondary data on these regions, classified by their income levels. It is observed from our data analysis that uniform “one‐size‐fits‐all” policies are dominated by region‐specific tailored policies for efficient waste management. Hence, prescriptions should be carefully formulated based on the type of waste generated and the processing/disposal options available in a region. For example, composting more wet waste at source is a better choice in low‐, low‐middle‐, and middle‐high‐income regions, whereas this is not the case in high‐income regions. The proposed decision framework also provides an explanation of the negative impact on recycling initiatives at a local level stemming from decreasing recycled material prices. Given that this is the first study to characterize and analyze the waste management supply chain, the article also highlights some areas for future research.