Circular Economy, Recycling & Remanufacturing worked example
Recycled Material Price Variance at 85% share of volume exposed to the variance: a worked example
What does the result look like when share of volume exposed to the variance reaches 85%? The full calculation is worked below with real intermediate numbers. a team needs to compare suppliers, adjust quotes, or decide whether recovered material still beats virgin cost for a purchase order, contract period, or material family
The inputs for this scenario
- Recycled material purchased or consumed: 36,000 kg (unchanged)
- Price variance per kg versus baseline: 0.18 $ / kg (unchanged)
- Share of volume exposed to the variance: 85 % (raised for this scenario; the documented default is 74)
- Fixed qualification, expedite, or supplier-change cost: 900 $ (unchanged)
Working through the calculation
- Applying the documented formula (Variable recycled material variance = recycled material purchased or consumed × price variance versus baseline × material volume exposed to the variance) to the inputs above produces each figure below.
- At this operating point the engine returns 6,408 total recycled material price variance for total recycled material price variance, the number this scenario is built around.
- At this operating point the engine returns 0.18 $ / piece for variance per kg purchased.
- At this operating point the engine returns 5,508 $ for variable recycled material variance.
- At this operating point the engine returns 900 $ for fixed qualification, expedite, or supplier-change cost.
How this compares with the baseline
- Against the tool's baseline example, where share of volume exposed to the variance sits at 74% and the headline result is 5,695 total recycled material price variance, this scenario comes in 12.52% above the baseline at 6,408 total recycled material price variance.
- A figure at this level is achievable when share of volume exposed to the variance is genuinely sustained, not just peaked for a shift. It models one variance rate against a single baseline; if you bought at several different prices through the period, run each tranche separately or use a weighted-average baseline.
Results at a glance
- Total recycled material price variance: 6,408 total recycled material price variance (headline result)
- Variance per kg purchased: 0.18 $ / piece
- Variable recycled material variance: 5,508 $
- Fixed qualification, expedite, or supplier-change cost: 900 $
Run it with your numbers
- Every input above is editable in the live Recycled Material Price Variance calculator, which recalculates instantly and can be shared with the inputs intact.
Last reviewed 2026-05-12.