Abstract—Robert U. Ayres and Allen V. Kneese presented a material flow model in a seminal paper titled “Production, Consumption and Externalities” in 1969, which had shown the transformation of material outputs into wanted and unwanted outputs. All the material outputs are from environment in which the consumers and producers co – exist. Every activity of consumption and production take place in the environment itself and wastage generated will also return to the environment itself. Recycling is a possibility of prolonging the usage of natural resources to the maximum, and there are many such interpretations available. The present study aims to offer more clarity in terms of recycling, by pointing each possibility of wastage and subsequent recycling, with a diagrammatic and mathematical explanation.