ARN: Fosterning Green Networks

Case Summary:
Auto recycling Nederland (ARN) is an agency responsible for overseeing the recycling of the auto components. The organization collects a EUR 45 fee for each vehicle purchased and manages those funds such that, at the end of the vehicle's lifespan, certified automobile dismantlers, collectors and recyclers can be paid a defined premium for recycling components. The ultimate goal of this national automobile recycling program is to recycle 85% of the each vehicle's weight by 2003, and 95% by 2007 as is suggested by the European Union. In order to make this program sustainable, ARN must use the upcoming opportunity on January 1, 2004 to revise the existing fee schedule.

Point:
The most important thing is to follow the money. Their income depends on the number of the new cars purchased. Their expenditure depends on the number of the end-of-life cars. If we put a EUR 45 fee into the funds, the money should be used for the car some years later. What is the future value of the money? What is the distribution of the end-of-life cars? We have to balance the future value of the current fee and the expenditure for recycling.