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| 1 | |
Smasher Crash Repairs Pty Ltd is a large panel shop/smash repairs business located in an area zoned for industry. Bill Smith (the owner of the business), the local council and the Environmental Protection Authority (EPA) are concerned about the waste management systems and ventilation systems that are currently used by Smasher Crash Repairs at its place of business. Last year Smasher was prosecuted for discharging automotive paint and chemicals into the sewerage and drainage systems and for not providing a safe work place for its employees due to poor ventilation in its automotive paint booths. Ken Jones (Smasher’s accountant), Rocco Arena (the panel shop manager) and Denis Haven, the union shop steward formed a team to discuss the issues. While there are already waste management systems in place, the team knows that there are areas where performance must be improved. At the end of last year, Smasher took its first step in improving its environmental practices: new monitoring and alarm systems were installed, upgrades were made to the ventilation system and employees were trained in responsible environmental practices. Ken Jones has isolated the environmental costs for the last financial year. These are as follows: Depreciation on new ventilation system | $75 600 | Costs of medical check-ups for employees due to poor ventilation system | 5 400 | Employee training costs to reduce environmental accidents | 22 000 | Fine for discharging automotive paint and chemicals into sewerage and drainage systems | 65 000 | Depreciation on new monitoring and alarm systems | 87 200 | Cost of new monitoring and alarm systems (includes installation) | 872 000 | Cost of upgrading ventilation system | 756 000 | Inspection of drainage and sewerage systems | 24 600 | Cost of legally disposing of waste automotive paint and chemicals in landfill | 14 300 | Occupational health and safety fine due to poor ventilation system | 2 500 | Inspection of monitoring and alarm systems | 19 600 |
The external failure costs are: |
| | A) | $131 400 |
| | B) | $97 600 |
| | C) | $19 700 |
| | D) | $67 500 |
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| 2 | |
It is possible to use either mains supply or recycled water in a production process. The use of recycled water would require the purchase of a pumping system costing $8 000 000 with an estimated useful life of 10 years. The additional electricity cost required to run the pumping system is estimated to be $150 000 per annum and the additional labour cost required for monitoring the pumping system is estimated to be $100 000 per annum. Maintenance and other costs for the pumping system are forecast to be $50 000 per annum. The annual savings accruing from recycling water are expected to be $2 100 000. <BR><BR>
The annual net benefit or net cost from using recycling water in the production process is: |
| | A) | an annual net benefit of $1 000 000 |
| | B) | an annual net benefit of $2 100 000 |
| | C) | an annual net cost of $800 000 |
| | D) | an annual net cost of $1 100 000 |
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| 3 | |
AgriChem Chemical Company is located in a small country town. The firm is considering using recyclable materials for packaging their product, thereby increasing the revenue received on sales of their product. This is an example of: |
| | A) | environmentally induced revenues |
| | B) | environmentally induced capital expenditure |
| | C) | an environmental performance indicator |
| | D) | physically oriented EMA |
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| 4 | |
The Sweetie Fruit Company was assessing two potential suppliers Supplier: AgriChem Company | worst |
| best | Evaluation area | Criteria | 1 | 2 | 3 | 4 | 5 | 6 | 7 | Purchasing and supply management | Cost |
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| X | Vendor performance |
| X |
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| Shelf life |
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| X |
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| Packaging safety | X |
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| Storage requirements |
| X |
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| Environment | Material regulated by EPA | X |
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| Disposal required off-site | X |
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| Safety and hygiene | Adequate labelling on containers |
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| X |
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| Inhalation risk | X |
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| Hazardous decomposition | X |
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| Carcinogenic potential | X |
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| Analytical | Specification analysis |
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| X |
| Frequency of testing |
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| X |
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of an agricultural fertiliser for its large holdings of soft-fruit orchards. Sweetie Fruits evaluates it suppliers by taking into account a range of financial and environmental factors. Below is the evaluation of each supplier: Supplier: EnviroChem Company | worst |
| best | Evaluation area | Criteria | 1 | 2 | 3 | 4 | 5 | 6 | 7 | Purchasing and supply management | Cost |
| X |
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| Vendor performance |
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| X | Shelf life |
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| X |
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| Packaging safety |
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| X |
| Storage requirements |
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| X |
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| Environment | Material regulated by EPA |
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| X |
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| Disposal required off-site |
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| X |
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| Safety and hygiene | Adequate labelling on containers |
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| X |
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| Inhalation risk |
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| X |
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| Hazardous decomposition | X |
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| Carcinogenic potential | X |
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| Analytical | Specification analysis |
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| X |
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| Frequency of testing |
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| X |
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The score for AgriChem Company would be: |
| | A) | 44 |
| | B) | 37 |
| | C) | 12 |
| | D) | 51 |
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| 5 | |
The Sweetie Fruit Company was assessing two potential suppliers of an agricultural fertiliser for its large holdings of soft-fruit orchards. Sweetie Fruits evaluates it suppliers by taking into account a range of financial and environmental factors. Below is the evaluation of each supplier: Supplier: AgriChem Company | worst |
| best | Evaluation area | Criteria | 1 | 2 | 3 | 4 | 5 | 6 | 7 | Purchasing and supply management | Cost |
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| X | Vendor performance |
| X |
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| Shelf life |
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| X |
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| Packaging safety | X |
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| Storage requirements |
| X |
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| Environment | Material regulated by EPA | X |
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| Disposal required off-site | X |
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| Safety and hygiene | Adequate labelling on containers |
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| X |
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| Inhalation risk | X |
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| Hazardous decomposition | X |
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| Carcinogenic potential | X |
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| Analytical | Specification analysis |
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| X |
| Frequency of testing |
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| X |
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Supplier: EnviroChem Company | worst |
| best | Evaluation area | Criteria | 1 | 2 | 3 | 4 | 5 | 6 | 7 | Purchasing and supply management | Cost |
| X |
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| Vendor performance |
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| X | Shelf life |
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| X |
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| Packaging safety |
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| X |
| Storage requirements |
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| X |
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| Environment | Material regulated by EPA |
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| X |
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| Disposal required off-site |
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| X |
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| Safety and hygiene | Adequate labelling on containers |
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| X |
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| Inhalation risk |
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| X |
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| Hazardous decomposition | X |
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| Carcinogenic potential | X |
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| Analytical | Specification analysis |
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| X |
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| Frequency of testing |
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| X |
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The score for EnviroChem would be: |
| | A) | 44 |
| | B) | 34 |
| | C) | 51 |
| | D) | 36 |
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| 6 | |
The Sweetie Fruit Company was assessing two potential suppliers of an agricultural fertiliser for its large holdings of soft-fruit orchards. Sweetie Fruits evaluates it suppliers by taking into account a range of financial and environmental factors. Below is the evaluation of each supplier: Supplier: AgriChem Company | worst |
| best | Evaluation area | Criteria | 1 | 2 | 3 | 4 | 5 | 6 | 7 | Purchasing and supply management | Cost |
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| X | Vendor performance |
| X |
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| Shelf life |
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| X |
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| Packaging safety | X |
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| Storage requirements |
| X |
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| Environment | Material regulated by EPA | X |
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| Disposal required off-site | X |
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| Safety and hygiene | Adequate labelling on containers |
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| X |
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| Inhalation risk | X |
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| Hazardous decomposition | X |
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| Carcinogenic potential | X |
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| Analytical | Specification analysis |
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| X |
| Frequency of testing |
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| X |
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Supplier: EnviroChem Company | worst |
| best | Evaluation area | Criteria | 1 | 2 | 3 | 4 | 5 | 6 | 7 | Purchasing and supply management | Cost |
| X |
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| Vendor performance |
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| X | Shelf life |
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| X |
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| Packaging safety |
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| X |
| Storage requirements |
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| X |
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| Environment | Material regulated by EPA |
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| X |
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| Disposal required off-site |
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| X |
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| Safety and hygiene | Adequate labelling on containers |
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| X |
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| Inhalation risk |
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| X |
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| Hazardous decomposition | X |
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| Carcinogenic potential | X |
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| Analytical | Specification analysis |
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| X |
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| Frequency of testing |
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| X |
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Based on purchase cost, which company would be the preferred supplier? Based on costs and social and environmental factors which company would be the preferred supplier? |
| | A) | AgriChem; AgriChem. |
| | B) | AgriChem; EnviroChem. |
| | C) | EnviroChem; AgriChem. |
| | D) | EnviroChem; EnviroChem. |
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| 7 | |
ISO 14031 environmental performance indicators standard suggests three types of indicators (or measures) that should be used. They are: |
| | A) | operational performance indicators, environmental capital expenditure indicators and environmental condition indicators |
| | B) | operational performance indicators, management accounting performance indicators and environmental condition indicators |
| | C) | operational performance indicators, management performance indicators and environmental condition indicators |
| | D) | operational waste performance indicators, environmental financial performance indicators and environmental condition indicators |
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| 8 | |
The sustainability balanced scorecard implemented by Novo Nordisk reflects the following perspectives: |
| | A) | financial, customer, internal business processes,and learning and growth |
| | B) | financial, customer, internal business processes, learning and growth, and social and environmental |
| | C) | financial, customer and internal business processes, with the integration of social and environmental measures within these dimensions |
| | D) | financial, business processes, customers and society, and people and organisation, with the customer and society, people and organisation and business processes dimensions incorporating a range of environmental and social targets and indicators |
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| 9 | |
A sustainability balanced scorecard has the perspectives of: |
| | A) | financial, customer, internal business processes, and learning and growth |
| | B) | financial, customer, internal business processes, learning and growth and sustainability measures |
| | C) | financial, customer and internal business processes, and the integration of social and environmental measures within these dimensions |
| | D) | business processes, customers and society, and people and organisation, with the customer and society, people and organisation and business processes dimensions incorporate a range of environmental and social targets and indicators |
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| 10 | |
The benefits of recognising, managing and reporting a sustainability approach include: |
| | A) | employee motivation |
| | B) | improved reputation |
| | C) | improved relations with government authorities |
| | D) | all of the given answers |
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