Entwhistle Electric creates five tons per year of black plastic shavings as part of its production of battery casings. Since there is no market for black plastic scrap, the company has traditionally thrown it into the trash. The annual trash haulage and environmental disposal fees associated with this scrap are about $1,000.
Entwhistle’s fellow corporate subsidiary, Green Lawn Care, learns of the black plastic scrap situation, and offers to buy it from Entwhistle for a token $10 a ton, as well as haul it away for free. Green can melt down this scrap and use it in the black plastic trim on its electric lawn mowers.
Entwhistle agrees to the deal, not only because of the minor $50 in annual revenues, but also because of the eliminated disposal fees and the mitigated risk of having any environmental issues related to the scrap.