Value Chain; Sustainability One way the value chain can be helpful is to provide a basis for acompany to determine the full cost of its product or service over the entire value chain. Often companies tend to focus only on manufacturing costs and ignore the upstream (design, testing, etc.) anddownstream (marketing, distribution, etc.) costs of the product or service. Full value-chain analysisof this type is useful to the consumer as well as the manufacturer. For example, a product might beinexpensive to buy, but the operating costs may be higher than expected. Consider for example thecase of a company, CleanTech, which provides a cleaning service to owners of large storage tanksthat often contain hazardous liquids such as fuel oil or toxic chemicals. CleanTech is considering thepurchase of a new system for cleaning tanks that is somewhat more expensive than its current equipment, but one which could reduce both operating costs and the amount of environmentally harmfulwaste product that must be disposed of after the cleaning process is complete.Required1. What is the role of the value chain in CleanTech’s purchase decision?2. In its analysis, how should CleanTech include the disposal of the environmentally harmful wasteproduct?3. Consider how CleanTech might use a balanced scorecard with a sustainability perspective and what themeasures in this sustainability scorecard might include. Give two or three examples of possible sustainability measures.
Value Chain; Sustainability One way the value chain can be helpful is to provide a basis for a
company to determine the full cost of its product or service over the entire value chain. Often companies tend to focus only on
downstream (marketing, distribution, etc.) costs of the product or service. Full value-chain analysis
of this type is useful to the consumer as well as the manufacturer. For example, a product might be
inexpensive to buy, but the operating costs may be higher than expected. Consider for example the
case of a company, CleanTech, which provides a cleaning service to owners of large storage tanks
that often contain hazardous liquids such as fuel oil or toxic chemicals. CleanTech is considering the
purchase of a new system for cleaning tanks that is somewhat more expensive than its current equipment, but one which could reduce both operating costs and the amount of environmentally harmful
waste product that must be disposed of after the cleaning process is complete.
Required
1. What is the role of the value chain in CleanTech’s purchase decision?
2. In its analysis, how should CleanTech include the disposal of the environmentally harmful waste
product?
3. Consider how CleanTech might use a balanced scorecard with a sustainability perspective and what the
measures in this sustainability scorecard might include. Give two or three examples of possible sustainability measures.
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