DOI: http://dx.doi.org/10.1065/lca199911.006 --- Life Cycle Profitability combines financial data, and forecasts, with market research to guide pricing decisions and to evaluate the cash flow consequences of goods and services. The ratio of direct and indirect costs, as well as the premium customers are willing to pay for "green" products, provide a quantitative means to identify business and environmental op-portunities. Life Cycle Profitability is developed to fit into existing organizational structures permitting firms to protect asset value, reduce legal defense and liability costs, quantify make-or-buy decisions, and aid in ecodesign and new product introduction. It aims at the interface between accounting, legal, marketing, production and EHS divisions. This paper develops "Life Cycle Profitability" as a tool based on measurables which exist within organizations. In this sense, Life Cycle Profitability is an evolutionary means to conduct business practice under scenarios where envirotechnical imperatives compliment short term financial necessities and strategic planning initiatives. The author aims to demonstrate that Life Cycle Profitability is a more meaningful method, and indicator, than non-cost based ecometrics and can compliment the qualitative continuous improvement accounting methods advocated by EMS and ISO 14000 standards, as well as by the Integrated Product Policy initiative. |
