Commodity Indexed Surplus Asset Disposal in the Reverse Logistics Process

Abstract

An important function in purchasing is the disposal of excess material. Often the material is in the form of waste products such as paper, metals and plastics which are difficult to value. However, by utilizing a commodity‐market based approach, many items can now be disposed of in a timely, profitable and environmentally friendly manner. This paper discusses some of the issues involved in disposing of surplus material using commodity indices. The discussion also shows how surplus asset disposal is linked to developments in environmental logistics, reverse logistics and recycling. The general methods, issues and challenges in commodity disposal have been explained through a case study. The case study includes a total cost model showing the costs and the benefits of commodity based or commodity indexed disposal.