Improved Calculation Method of Collection Fee for End-of-Life Consumer Electronics’ Free Visit and Pickup Service

Abstract

Since the introduction of the Extended Producers Responsibility (EPR) regulation in 2003 by the South Korean Ministry of Environment, consumer electronics manufacturers and dealers have had to collect and recycle end-of-life (EOL) consumer electronics (CEs) disposed by households and businesses. According to this regulation, the use of the Free Visit and Pickup (FVP) service has continued to increase. However, ‘K’ company, who oversees the FVP service, has had to face strong complaints regarding the current collection fee of collection drivers nationwide. This study focused on the complaint case faced by ‘K’ company regarding the FVP service collector’s fee. In order to analyze the deviation of collection fees, 225 nationwide regions were derived into four different groups (A, B, C and D) depending on their overall collection numbers. This data was simulated to find the proper discount rate of paying unit cost per EOL CE type for each group. The variable cost was then only applied to the collection fee calculation under the assumption of maintaining the current total collection fee level. We further took into consideration the increase in collection amount from forecasting volume of 2019 and analyzed the deviation amongst FVP service collection fees. According to the analysis results, although the total collection increased, due to the suggested discount rate of paying unit cost per EOL CE it was found that more collection drivers received higher collection fees than before and the deviations amongst FVP service collection fees from four different groups remained similar to the current range.