Burnham Munchies, Inc., is an international producer of potato chips. At the end of 2006, Mandy...

 

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Burnham Munchies, Inc., is an international producer of potato chips. At the end of 2006, Mandy Pohlson, president of Burnham, appointed a task force to focus on the packaging and product use segments of its product's life cycle. Since customers con- sumed the contents of the package (if not consumed, the contents are biodegradable), the main concern was on the ability to conserve, recycle, and dispose of packaging ma- terials. A new packaging proposal was being considered. A partial inventory analysis of the current packaging and the new packaging is as follows: Current Delivery boxes: Recycle potential Times used before disposal Paper bags: Average package weight (ounces) Ink with heavy metals Ultimate disposal: Safe for incineration Annual packages produced and sold Current demand for delivery boxes Recycle forecast Low 1 Cost per ounce (package) Cost per pound (delivery boxes) 2 Yes No Yes Upon seeing the inventory analysis, Mandy was pleased to see the apparent envi ronmental benefits of the new packaging. However, she wanted a more detailed analy- sis of the impact of the new packaging. In response to this request, environmental engineering and cost accounting provided the following estimates: New High 5 $0.02 $0.60 1.5 No 200,000,000 300,000,000 pounds 90% of delivery boxes used The company's environmental engineers also indicated that in Europe and Japan about 75 percent of the packaging will participate in waste-to-energy combustion programs for the generation of steam or electricity. In the United States, only about 25 percent of the packaging will participate in such programs. Environmental engineering also noted that saving 300 pounds of paperboard is equivalent to saving one tree. Required: 1. Calculate the total pounds of delivery boxes saved because of the new packaging. How much does this save in dollars? How many trees are saved because of recy- cling and reduction in demand for boxes? Because of recycling, how many pounds of cardboard are diverted from landfills? 2. Calculate the total pounds of materials saved by reducing packaging (bag) weight. What are the dollar savings? Now, assume that a design engineer has in- dicated that by reducing the packaging seal from the industry standard one-half inch to one-fourth inch, an additional 5 percent reduction in bag packaging can be achieved. How many pounds of materials are saved? Dollars saved? 3. Explain why the ultimate disposal qualities of packaging are important environ- mental considerations. 4. Why emphasize saving a material that comes from a renewable resource (trees)? Burnham Munchies, Inc., is an international producer of potato chips. At the end of 2006, Mandy Pohlson, president of Burnham, appointed a task force to focus on the packaging and product use segments of its product's life cycle. Since customers con- sumed the contents of the package (if not consumed, the contents are biodegradable), the main concern was on the ability to conserve, recycle, and dispose of packaging ma- terials. A new packaging proposal was being considered. A partial inventory analysis of the current packaging and the new packaging is as follows: Current Delivery boxes: Recycle potential Times used before disposal Paper bags: Average package weight (ounces) Ink with heavy metals Ultimate disposal: Safe for incineration Annual packages produced and sold Current demand for delivery boxes Recycle forecast Low 1 Cost per ounce (package) Cost per pound (delivery boxes) 2 Yes No Yes Upon seeing the inventory analysis, Mandy was pleased to see the apparent envi ronmental benefits of the new packaging. However, she wanted a more detailed analy- sis of the impact of the new packaging. In response to this request, environmental engineering and cost accounting provided the following estimates: New High 5 $0.02 $0.60 1.5 No 200,000,000 300,000,000 pounds 90% of delivery boxes used The company's environmental engineers also indicated that in Europe and Japan about 75 percent of the packaging will participate in waste-to-energy combustion programs for the generation of steam or electricity. In the United States, only about 25 percent of the packaging will participate in such programs. Environmental engineering also noted that saving 300 pounds of paperboard is equivalent to saving one tree. Required: 1. Calculate the total pounds of delivery boxes saved because of the new packaging. How much does this save in dollars? How many trees are saved because of recy- cling and reduction in demand for boxes? Because of recycling, how many pounds of cardboard are diverted from landfills? 2. Calculate the total pounds of materials saved by reducing packaging (bag) weight. What are the dollar savings? Now, assume that a design engineer has in- dicated that by reducing the packaging seal from the industry standard one-half inch to one-fourth inch, an additional 5 percent reduction in bag packaging can be achieved. How many pounds of materials are saved? Dollars saved? 3. Explain why the ultimate disposal qualities of packaging are important environ- mental considerations. 4. Why emphasize saving a material that comes from a renewable resource (trees)?

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