The consumption-driven society today produces an enormous amount of waste, which puts pressures on land, pollutes the environment and creates economic burden. ‘Zero waste’ concept, a whole system approach aiming to achieve no waste along the materials flow through society, has become one of the most visionary concepts for tackling growing waste problems. System Dynamics (SD) approach is applied in the proposed framework for designing the waste management in a zero waste residential precinct. A cost-benefit analysis (CBA) is incorporated to supplement the SD framework to evaluate the total cost and benefit of waste and resources throughout the material flow chain.The authors proposed a list of parameters under the categories of process, technology and infrastructure, socio-economic and institutional, social- environment, to be tested in future case study of Bowden village, SA, Australia. The framework provides an inventory of leverage points that helps policy-makers design waste policies and allocate resources effectively, with minimum environmental impact and optimum social benefits. It also helps planning professionals and business stakeholders better understand the costs and benefits of different scenarios for achieving a zero waste residential precinct.