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Total Cost of Ownership with an Environmental Twist

Beth Davis, a buyer at Bull Lawn Equipment Manufacturers, is sourcing small gas-burning engines for a new line of lawnmowers that Bull is planning to launch in 6 months. Bull, which is headquartered in Avondale, Arizona, manufactures a full line of yard equipment, including lawnmowers, weed-eaters, and leaf blowers.

Beth’s annual evaluations—which have been excellent—are based on her ability to acquire components at the lowest possible purchase price. The result: Over the past decade, Beth has become a global citizen. After all, many of the parts Bull uses to assemble its products are manufactured in distant lands. Recently, senior management has increased the emphasis on driving spending down. The pressure on price was a direct result of escalating costs of services, goods, and transportation.

Although Beth understood that price was a critical “feature” in the minds of end consumers, she was bothered by the fact that Bull had never stopped to consider the environmental impact of its purchasing decisions. Personally, Beth had always been environmentally friendly. Some of her friends had called her a LOHAS—a term used to describe well-to-do people who pursued a Lifestyle Of Health And Sustainability. Beth recycled, carried her own shopping bags to the store, and collected old cell phones and computer equipment for re-manufacturing. She had even had her residence evaluated for wasted electricity and planned to install newer windows that would help her take advantage of “natural” lighting. Beth has initiated a sustainability discussion with Bull’s senior management.

Questions to the writer:

Having read the story of Beth Davis, prepare a total cost of ownership for her business venture. Ensure the story is given an environmental twist.

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