L4M7 WHOLE LIFE ASSET MANAGEMENT

Questions: Chapter 1

1 Which of the following aspects of warehouse management relate to efficiency of warehouse

operations? Select TWO that apply.

A Location of premises

B Workflow

C Cost of premises

D Warehouse layout

E Unused space available

2 A company with national distribution for its products is planning to set up a network of
regional warehouses, to replace its current national centralised warehouse. The ideal
number of warehouses in the planned new network will be one that minimises the
combined cost of:

A warehouse operations and transportation costs

B primary and secondary transport

C receiving goods into warehouses and despatch from warehouses

D ton-miles transported and cost per ton-mile.

3 Which of the following should be objectives of warehouse design? Select TWO that apply.

A Workforce availability

B Minimising throughput

C Ease of access to stored items

D Maximising stock movement

E Avoiding congestion in the warehouse

4 A company has a warehouse that has a large volume of stock throughput. Its layout includes
a pick and pack area for handling customer orders. Stock items are categorised as A, B or C
according to value of turnover. Which one of the following should be a feature of an efficient
layout for this warehouse?

A Category C stock items should be held nearest to the Goods Out area.

B The Goods In and Goods Out areas should be a single combined area for both
activities.

C Hazardous stock items should not be held within the warehouse building.

D The pick and pack area should be close to the Goods Out area.

5 In which one of the following ways can congestion be reduced within a warehouse?

A Use of high racking and narrow aisles

B One-way flow for movement of people and vehicles

C Use of an ABC system of categorising stock items to locate them in store

D Use of mechanised materials handling rather than manual handling

Questions: Chapter 2

6 Which of the following are reasons in favour of coding stock items rather than using their
stock descriptions? Select THREE that apply.

A To allow for additions to the range of stock items

B To avoid duplication

C For publication of stock lists or catalogues

D To locate or retrieve items in store

E To clarify stock descriptions

7 Which one of the following is a benefit of using an industry standard coding system for the
coding of stock items? Select TWO that apply.

A For effective use of barcodes

B To avoid the need to use customers’ stock codes

C So that all products can be coded

D To avoid the need to design our own coding system

E To minimise stock obsolescence

8 Which one of the following is a feature of RFID technology?

A The ability to read RFID tags at a very long distance

B The ability to read tags without the need for line of sight

C The use of RFID tags in combination with bar odes

D RFID tags can hold unlimited amounts of data

9 Which one of the following is a benefit of an order tracking system?

A To ensure that stock items are not lost

B To ensure that stock items are not damaged

C To reduce the need for inventory management in a store or warehouse

D To inform customers about the despatch of goods and due delivery date

10 A feature of a good product coding system is that the coding system should be expandable.
This means that:

A the length of codes should be variable

B the system should allow for an increase in the range of product items

C product codes should be unique

D stock codes should be long enough to include all the identification data required.
Questions: Chapter 3

11 Which one of the following is a feature of pallets?

A They are made in non-standard sizes

B They are needed to hold tote boxes on shelves

C They are reusable and may be returned to suppliers of goods

D They reduce the need to move stock in a warehouse

12 Which one of the following types of material handling equipment is well suited to moving
very heavy loads from one location in a warehouse to another?

A Conveyor belt

B Order picking trolley

C Carousel

D Crane

13 Which one of the following is a feature of unitisation and unit loads for stock?

A Increases the risk of damage to stock

B Reduces the number of journeys needed to move stock

C Requires more space on racks and shelving than if pallets are not used

D Reduces the need for order picking

14 Complete the following sentence. ‘Packaging of products is a means of ensuring the secure
delivery of a product to the customer in sound condition and …’

A at minimum cost

B to protect the environment

C to protect it from damage

D at minimum risk to health and safety.

15 A feature of robotic forklift trucks for materials handling in a warehouse, compared to earlier
technology versions of automated guided vehicles (AGVs), is that:

A they have sensors to avoid collisions

B they can create their own work schedule

C they do not need to follow a fixed route through the warehouse

D they can handle much larger volumes of stock.

Questions: Chapter 4

16 Why is it necessary to measure the quantities and values of opening and closing stock of
purchased items?

A To monitor stock movements

B To measure safety stock

C To measure the amount of stock purchased

D To measure the amount of stock used

17 Which one of the following statements about safety stock is correct?

A It reduces the risk of stockouts and reduces stockholding costs

B It reduces the risk of stockouts but increases stockholding costs

C It eliminates the risk of stockouts and reduces stockholding costs

D It eliminates the risk of stockouts but increases stockholding costs

18 A company builds up stocks of seasonal consumer goods for sale in the weeks leading up to
end-of-year and new year celebrations. After the new year celebrations, the company is left
with stocks of unsold items. These items are:

A obsolescent stock

B work in progress

C redundant stock

D safety stock.
19 For a manufacturing company, which one of the following statements about material
supplies is correct?

A Materials used to deliver a service are all indirect materials.

B Direct supplies include the packaging for finished goods.

C Indirect materials may occasionally be a part of a physical finished product.

D The quantities of indirect materials required depend on the volume of production.

20 Organisations may use the ABC categorisation of stock items for the purpose of store or
warehouse management. Which one of the following statements is correct?

A Category C stock items turn over faster by value than items in either Category A or
Category B.

B Category C items are low-value items that collectively make up a large percentage of
the total value of all stocks.

C A stockout of a Category A stock item is more likely to disrupt operations than a

stockout of a Category B or Category C item.

D Monitoring of stock levels is required only for Category A items.

Questions: Chapter 5

21 Why do companies choose not to measure the indirect costs of acquiring raw materials and
components?

A Because these costs are incurred before the items are acquired

B Because it is not possible to identify what items of indirect acquisition cost might be

C Because they are incurred by the supplier, not the buyer

D Because the value of the information does not justify the cost of collecting it
22 Which of the following might be costs of holding inventory? Select TWO that apply.

A Deterioration

B Stockouts

C Changing market prices

D Goods inspection costs

E Insurance

23 How might the capital cost of holding inventory be measured?

A Cost of average inventory × Actual cost of borrowing

B Cost of average inventory × Opportunity cost of capital

C Cost of maximum inventory × Actual cost of borrowing

D Cost of maximum inventory × Opportunity cost of capital

24 A stockout of a direct material item for a manufacturing company should be expected to

occur:

A only when the production function is operating at full capacity

B only when the production function is operating below full capacity

C only in the period between placing a new purchase order and received delivery

D whenever there is an unexpected increase in demand for the item.

25 In order to control stockholding costs whilst maintaining a minimum service level,

companies will:

A allow some stockouts

B take measures to reduce theft of stock

C restrict total purchase quantities

D purchase stock insurance.

Questions: Chapter 6

26 For which of the following is a subjective method of forecasting likely to be preferable to an

objective forecasting method?

A Sales of a new product

B Sales of a regularly purchased product

C Sales of a high-priced product

D Procurement of dependent demand materials

27 A manufacturing company is considering whether to introduce JIT procurement

arrangements with its suppliers of direct materials, because it wants to operate a JIT
production system with minimum inventories. However, the procurement manager is
concerned about the downside risks with JIT procurement. Which of the following could be
such risks? Select TWO that apply.

A Risk of supplier failure

B Risk of higher prices

C Damage to relationships with suppliers

D Loss of flexibility in operations

E Risk of excessively large orders

28 The production manager in a manufacturing company wants to introduce lean concepts into
the production system, but is particularly concerned about the delays to production caused
by the time and procedures required for the addition to products of features that seem
unnecessary and do not add value. Which aspects of waste is the production manager
concerned about here? Select TWO that apply.

A Defects

B Movement

C Over-processing

D Over-production

E Waiting time
29 Which one of the following is one of the ‘five zeros’ in lean manufacturing?

A Zero components

B Zero handling

C Zero inefficiency

D Zero complaints

30 A manufacturing company has measured the following performance for a reporting period.
The average time between placing purchase orders and the delivery of goods was 12
working days. Stockouts of materials occurred with 3% of stock requisitions (six occasions).
The average time that items were held in store before use was 25 days. What was the
service level during this period?

A 12 days

B 6 occasions

C 25 days

D 97%

Reference Chapter 6 Section 7

Questions: Chapter 7

31 Should the total cost of ownership be considered when making decisions about the
procurement of components for manufacture of an end product?

A Yes, because the total cost of ownership should be considered in all procurement
decisions

B Yes, because the total cost of ownership defines the level of required performance

C No, because the length of ownership is short

D No, because costs of usage cannot be estimated

32 For which of the following reasons might it be appropriate to make asset procurement
decisions on the basis of through life cost? Select TWO that apply.

A To estimate decommissioning costs at the end of the asset’s useful life

B To choose between alternative procurement options, where a lower-priced item

may have a higher through life cost

C To allocate a capital expenditure budget

D To identify the optimal useful life for a capital asset

E To assess the supplier’s ability to provide a repairs and maintenance service

33 In which of the following ways will the through life cost for an office building differ from the
through life cost for factory machinery? Select TWO that apply.

A Office buildings do not have repairs and maintenance costs

B The disposal value of an office building may be higher than its acquisition cost

C An office building has an unlimited useful life, so a through life cost cannot be
estimated

D The through life cost for factory machinery includes installation costs

E The through life costs for an office building should include the costs of everything
needed to equip and furnish it

34 Which one of the following items of cost differs between the through life cost of a purchased
item of equipment and the cost of a long-term lease for the same item?

A Payments to the supplier

B Training costs

C Repairs and maintenance costs

D Acceptance testing costs

35 A company is considering the purchase of new equipment for its operations centre. If the
purchase goes ahead, it will be necessary to strengthen the flooring and install cables to
accommodate the equipment. The installation and testing work will be done by the
company’s own engineering staff. Should the direct labour costs of the engineering staff be
included in an estimate of the through life cost of the equipment?

A Yes, because the direct labour cost of installation is part of the acquisition cost

B Yes, because using in-house staff to do installation work reduces the supplier’s price
for the equipment

C No, because labour overhead costs are not included in a through life cost

D No, because using in-house staff to install and test the equipment reduces the need
for initial training costs

Questions: Chapter 8

36 Which of the following is likely to be the most difficult problem with TCO modelling to obtain
reliable estimates of whole life costs?

A Constructing the template for a model to estimate TCOs

B Deciding which indirect costs to include in the TCO model

C Deciding which direct costs to include in the TCO model

D Estimating costs in later years of an asset’s life

37 You hear a colleague make the observation that pre-acquisition costs for a long-term asset
are usually included in estimates of total cost of ownership. Do you agree with this
observation?

A Yes, because these costs are included within the purchase price of a long-term asset

B Yes, because they make up a substantial proportion of an acquisition cost

C No, because TCOs are usually calculated only after the supplier’s quoted price is
known

D No, because pre-acquisition costs are difficult to measure accurately

38 Which of the following items might be hidden costs that should be included in the TCO of
long-term assets but which are often overlooked? Select TWO that apply.

A Costs of future upgrades and enhancements

B Inflation in costs

C Finance costs

D Costs of making changes to operating procedures

E Risks of delays to the acquisition of the asset

39 Which one of the following might be a hidden cost in an extended supply chain for the
purpose of estimating a total cost of ownership, where operating the long-term asset will
depend on the efficiency and effectiveness of an extended supply chain for its materials?

A Breakdowns in the supply chain to the supplier

B Monitoring and managing the supply chain

C Late deliveries due to the length of the supply chain

D Possibility in future of import duties being imposed on imported goods

40 In making decisions about acquisitions of long-term assets, should a TCO be calculated for all
assets?

A Yes, because computer systems standardise and simplify the process

B Yes, because TCOs bring more certainty to the management of the costs of long-
term assets

C No, because asset purchases should be based on the purchase price, not TCO

D No, because TCOs are only useful when they might affect a decision to acquire a
long-term asset
Questions: Chapter 9

41 A manufacturing company is estimating the whole life costs for one of its factory buildings.
Which of the following will affect the end-of-life costs for the building?

A Site clearance

B Budget allowance

C Commissioning

D Total cost of ownership

42 A chemicals manufacturing company is having a factory demolished at the end of its

operational life. Which of the following is likely to be the first stage in the demolition
process?

A Structural demolition

B Decontamination of storage tanks and vessels

C Decontamination of the land

D Dismantling of equipment

43 In a country where there are strict regulations for the disposal of business waste, which of
the following regulations are likely to apply? Select TWO that apply.

A Maximum cost for waste disposal

B Ban on disposal of hazardous waste

C Requirement to use a registered waste carrier

D Use of designated waste disposal sites

E Prompt disposal of waste items

44 Which of the following costs is usually excluded from measurements of the cost of
decommissioning a major asset at the end of its operational life?

A Landfill tax

B Recycling of waste

C Demolition costs

D Externalities

45 Which of the following aspects of the ‘people’ pillar in the triple bottom line will contribute
to the end-of-life costs for a capital asset? Select TWO that apply.

A Redundancy costs

B Tax relief on decommissioning costs

C Restrictions on disposal of waste to landfill

D Environmental contamination

E Health and safety requirements

Solutions and Feedback: Chapter 1

1 Answer B and D

Efficiency of operations within a warehouse depends on the ease of workflow (eg avoiding
congestion and holdups) and warehouse layout. Location and cost are separate issues, not related to
efficiency. Unused space is not relevant if workhouse layout and workflow operate efficiently.

Reference Chapter 1 Section 1.2

2 Answer A

A larger number of regional warehouses will mean higher warehouse operating costs, but should
reduce costs of distribution. A smaller number of warehouses should mean lower warehouse
operating costs but higher distribution costs. The ‘ideal’ is a number of warehouses where the
combination of warehouse operating costs and distribution costs is minimised.

Reference Chapter 1 Section 2.4

3 Answer C and E

To improve the flow of materials in a warehouse, objectives should include ease of access to stored
items and avoiding holdups and congestion. Other objectives may be speed of throughput,
minimising stock movement and safe working conditions.

Reference Chapter 1 Sections 3.2–3.3

4 Answer D

Locating the pick and pack area close to the Goods Out area should help to minimise the movement
of stock within the warehouse. Category A stock items should be held nearest to the Goods Out
area. The Goods In and Goods Out areas should be separate, even if physically close, to avoid
congestion.

Reference Chapter 1 Section 5.2

5 Answer B

A one-way flow of movement, for people and vehicles, can reduce congestion and ease the flow of
materials. An ABC system might be used to decide the location of stock items within a warehouse,
but this will reduce the amount of stock movement rather than congestion.

Reference Chapter 1 Section 5.3

Solutions and Feedback: Chapter 2

6 Answer B, C and D

Stock codes have a variety of different purposes. One is to identify stock items in a catalogue, stock
list or pricelist: use of codes saves time and reduces the risk of errors in stock identification. Stock
codes can also be used with a stock management IT system to locate and retrieve items of stock
from store. Avoiding duplication is also important

Reference Chapter 2 Section 1.2

7 Answer A, D

If the same coding system is used throughout an industry, it becomes possible to use barcodes on
goods when they are delivered from a supplier to a customer. Industry-wide standard barcodes are
not restricted to in-house use. And this also saves us the time and trouble of designing our own
system.

Reference Chapter 2 Section 2.1

8 Answer B

RFID handsets do not need line of sight to read tags. RFID tags can be read at longer distances than
bar codes, but not very long distances. RFID tags also hold much more data than barcodes, but not
unlimited amounts of data.

Reference Chapter 2 Section 8.2

9 Answer D

Order tracking systems are used to track the progress of an order. This includes identifying when
goods are despatched and so being able to predict the delivery date.

Reference Chapter 2 Section 7.3

10 Answer B

Expandable means to make larger. When referring to a stock coding system, it means that the
system should allow for the addition of new codes for new stock items.

Reference Chapter 2 Section 4.4

Solutions and Feedback: Chapter 3

11 Answer C

When goods are delivered from suppliers on pallets, the pallets are subsequently returned to the
supplier. They are made in standard sizes, although there are several standardisation systems.

Reference Chapter 3 Section 1.2

12 Answer D

Cranes can move very heavy loads from one location in a warehouse to another, over the area
covered by the crane.

Reference Chapter 3 Section 2.5

13 Answer B

Until a unit load is broken open, stock can be moved around in unit loads, reducing the number of
journeys needed to move the stock.

Reference Chapter 3 Section 3.2

14 Answer A

Packaging should protect the goods inside and should also minimise cost (within any policy
constraints the company might have, such as a policy requirement for environmentally friendly
packaging materials). Protecting the environment and minimising safety risk are desirable features
of packaging but are not themselves a business purpose of packaging.

Reference Chapter 3 Section 4.1

15 Answer C

Robot forklift trucks, unlike earlier forms of AGV, do not need to follow a fixed route through a
warehouse, but can move between any locations and by any route. However, although they organise
how they do their work, they do not create their own work schedule. Both robots and AGVs have
sensors to avoid collisions. Robots additionally are able to alter their direction to get round
obstructions.

Reference Chapter 3 Section 6.4

Solutions and Feedback: Chapter 4

16 Answer D

The amount of purchases can be determined from purchase orders and suppliers’ invoices.
Measurements of opening and closing stock of purchased items are needed to calculate the
quantities of stock used:

Stock usage = Purchases in the period + Opening stock – Closing stock

Reference Chapter 4 Section 2.3

17 Answer B

Safety stock reduces the risk of stockouts, but very high levels of safety stock would be needed to
eliminate stockouts entirely. Safety stock means higher stock levels, so higher stockholding costs.
The aim should be to minimise the combined cost of holding safety stock and the cost of stockouts.

Reference Chapter 4 Section 3.2

18 Answer C

The stock is not obsolescent, but it is surplus unwanted stock that cannot be sold at normal market
prices. This is redundant stock.

Reference Chapter 4 Section 4.4

19 Answer B

Direct materials include packaging of finished goods. (For example, a tin of baked beans includes the
tin.) Some materials used to deliver a service may be direct materials: food and drink in a restaurant
are examples. Indirect materials are never part of a physical finished product (because then they
would be direct materials) and the quantities required are not dependent on production volume.

Reference Chapter 4 Sections 5.1–5.2

20 Answer C

Category A items make up the smallest percentage of stock items by number but the largest
proportion by stock value. A stockout of a Category A item is more likely to disrupt operations than a
stockout of any other item. Category C items may turn over very fast in terms of units of product,
but not in terms of value.

Reference Chapter 4 Sections 6.2–6.3

Solutions and Feedback: Chapter 5

21 Answer D

Information about indirect costs of acquiring goods from suppliers has limited practical value, and
the cost of obtaining it would not be justified. There should be little difficulty in identifying what
items of indirect cost might be; however, actual measurement of these costs would be a difficult (or
impossible) task in practice.

Reference Chapter 5 Section 2.1

22 Answer A and E

Inventory might deteriorate over time: the risk of deterioration increases with the length of time
that inventory is retained in stock. The cost of insuring inventory is a financial cost of holding stock.

Reference Chapter 5 Sections 3.1–3.2

23 Answer B

The capital cost of holding inventory is a ‘best estimate’ measured as average inventory multiplied
by an opportunity cost of capital investment. This opportunity cost is the rate of return that could be
earned by investing elsewhere the amount spent on (invested in) the inventory.

Reference Chapter 5 Section 3.2

24 Answer C

A new order for a direct material should be placed before existing stocks run out, so any stockout
should occur only in the period between placing the order for re-supply and getting delivery. Many
items of indirect materials are not critically important, so reordering these may be delayed until
after existing stocks have been used up.

Reference Chapter 5 Section 5.2

25 Answer A

A 100% service level means no stockouts. To achieve this, inventory levels might need to be
excessively high. A company will therefore hold some buffer stocks, but in order to keep
stockholding costs under control, it will accept some risk of stockouts.

Reference Chapter 5 Section 5.3

Solutions and Feedback: Chapter 6

26 Answer A

There is no historical sales data for making a forecast of sales for a new product, so a subjective sales
forecasting method is likely to be used. A forecast of purchasing requirements for dependent
demand materials can be prepared from the manufacturing plan produced by a system such as MRP.

Reference Chapter 6 Section 1

27 Answer A and B

Failure of a supplier could disrupt production if the company operates a JIT procurement system
with no safety stocks. There is also a risk that suppliers will charge higher prices for a JIT
procurement service.

Reference Chapter 6 Section 5.4

28 Answer C and E

Over-processing refers to doing things that do not add value and so waste time and resources.
Delays in production (including waiting time) are another of the seven wastes.

Reference Chapter 6 Section 6.2

29 Answer B

Zero handling of materials is an aim of lean manufacturing, because handling does not add value.
Zero defects (but not zero complaints) is another of the five zeros.

Reference Chapter 6 Section 6.6

30 Answer D

A 100% service level means no stockouts. When there are stockouts on 3% of occasions, the service
level is 97%.

Solutions and Feedback: Chapter 7

31 Answer C

Measuring total cost of ownership or through life cost is only relevant for the procurement of items
that are expected to have a reasonably long useful life. It is not relevant to the procurement of
materials or components with a short stock turnover period.

Reference Chapter 7 Section 1 .1

32 Answer B and D

With the purchase of capital assets, an asset with a lower purchase price may have a higher through
life cost than an alternative purchase option. Through life cost can also be used to identify the most
appropriate useful life (and replacement cycle) for a capital asset.

Reference Chapter 7 Section 1.2

33 Answer B and E

The through life cost of all long-term assets should include disposal cost or disposal value: with an
office building disposal value may well increase over time, whereas machinery wears out and
disposal value falls over time. With the acquisition of an office building, through life cost should also
cover the cost of all the other items needed to equip and furnish it, in order to make it functional:
this does not apply to the through life cost of factory machinery. A through life cost can be
estimated for a building, by making an assumption about its useful life.

Reference Chapter 7 Section 1.3, but also entire chapter

34 Answer A

Most costs for an asset will be the same regardless of whether the asset is purchased or leased. A
difference is that with purchase, the full price is paid at the outset, whereas with leasing, payments
(to the supplier or lessor company) are spread over the term of the lease.

Reference Chapter 7 Sections 3.1–3.2

35 Answer A

Direct costs should be included in through life costs. There may be a question about whether
indirect costs should be included, but in this situation the costs of the engineers’ time are directly
attributable to the installation and testing process.

Reference Chapter 7 Section 2.3

Solutions and Feedback: Chapter 7

36 Answer D

If an organisation calculates TCOs, it is likely to use an established template or a simple spreadsheet

model. The difficulty is in estimating future costs, particularly in the later years of an asset’s
expected life. (Indirect costs should not be included in a TCO.)

Reference Chapter 8 Sections 1.2 and 3 .1

37 Answer C

Pre-acquisition costs include costs of preparing the specifications, administration of the competitive
bidding process and detailed negotiations with the supplier. TCOs are usually estimated after the
supplier has given a price for the asset, and at this stage pre-acquisition costs are past costs (‘sunk
costs’). Costs that have already been incurred should not be included in a TCO.

Reference Chapter 8 Section 2.2

38 Answer A and D

Future costs of upgrading an asset throughout its life, and costs to procedures brought about by
acquiring an asset are often hidden overlooked costs in calculating a TCO. Inflation is usually ignored
and finance costs are not included in a TCO. Risks are not costs, and are not included in a TCO.

Reference Chapter 8 Sections 4.1–4.3

39 Answer B

If there is an extended supply chain whose efficiency and effectiveness will be crucial for successful
operation of the long-term asset, the costs of managing the supply chain are relevant costs, but are
likely to be hidden and overlooked. Breakdowns, delays and import duties will add to costs if they
occur, but they are risks rather than definite costs, and risks are not included in estimates of a TCO.

Reference Chapter 8 Section 4.5

40 Answer D

Calculating TCOs should have a purpose, and the purpose should be to influence acquisition
decisions for long-term assets. TCOs are likely to be used only for high-value assets, and possibly
only for acquisition decisions made at a senior management level or by the board of directors.

Reference Chapter 8 Section 5

Solutions and Feedback: Chapter 9

41 Answer A

Site clearance could be a large end-of-life cost for a building.

Reference Chapter 9 Sections 1 and 5.1

42 Answer B

Decontamination of storage tanks should come before dismantling of equipment. This will be
followed by demolition of the building structure and then decontamination of the land after
structural demolition is completed.

Reference Chapter 9 Section 3.1

43 Answer C and D

Regulations are likely to include a requirement to use an authorised firm for the disposal of waste
and to use designated waste sites. There will be special regulations for the disposal of hazardous
waste, but disposal will not be forbidden. There are unlikely to be regulations about the timing of
waste disposal, but there will be regulations about the safe storage of waste before disposal.

Reference Chapter 9 Section 4.1

44 Answer D

Externalities are consequences or costs that affect other people or a community or society in
general. Since a company does not incur these costs itself, it will not include them in measures of
end-of-life costs. Externalities are also very difficult to estimate with accuracy.

Reference Chapter 9 Section 5.2

45 Answer A and E

Redundancy costs and costs for ensuring health and safety of workers in the decommissioning
process are ‘people’ costs. The other costs are all ‘planet’ costs – ie environment-related costs.

Reference Chapter 9 Section 6.1