(Relevant costs)

Businesses in Chattanooga, Tenn., will be asked to give up a bit of their independence to cut costs and help clean up the environment.

The Chattanooga Institute, a nonprofit advocate of environmentally friendly development, announced the next phase in the creation of a $70 million “ecoindustrial park”: a six-month feasibility study that would lay out the blueprint for a community in which businesses swap one another’s waste and other byproducts, from hot water to used paper. First envisioned in meetings two years ago with President Clinton’s Council on Sustainable Development, planners said the park will be fully operational as early as 2001.

If successful, the city’s blighted Southside community could become a magnet for companies willing to use one another’s waste products as both raw materials and sources of energy.

“Everything [would be] reused or recycled to create something that is needed by someone else,” says Woodley Murphy, Chattanooga Institute executive director.

SOURCE: Adapted from Motoko Rich, “Urban Plan Taps Waste as a Resource,” The Wall Street Journal (November 19, 1997) p. S1.

The preceding article discusses a way in which a company can take a more expansive view of its operations to define relevant costs. Discuss why firms of the future will increasingly find it necessary to look across the supply chain, rather than just internally, to identify relevant costs.