Reference no: EM132842435
Question - Auckland Coffee has evaluated the social and environmental costs of its coffee roasting facility. The costs are listed below.
Cost ($)
Depreciation of oven fume extractor system - 4,000
Employee training costs to reduce environmental accidents - 5,600
Monitoring systems to detect fumes - 4,800
Fine from Auckland city council for dumping coffee grounds into the sewer - 5,600
Inspection of drainage systems to detect problems with discharge - 1,500
Reduction in value of nearby houses due to odour - 53,000
Routine cleaning of extractor system to remove coffee residues - 2,500
Disposal of waste coffee grounds - 5,600
Lost sales due to poor environmental reputation - 8,000
Obtaining ISO 14001 certificate - 10,000
Workers' compensation claims due to poor environmental practices - 7,000
Medical costs relating to communities inhaling polluting air caused by Auckland Coffee - 7,500
Required -
Calculate the social costs that relate to the operation.
Explain the link between social costs and environmental costs.
An environmental cost report showing Environmental cost classification suggested by the Environmental Protection Agency (EPA). In your report also state the reasons for your categorization.
Provide one example of tier 3 and tier 5 that may have been overlooked in the analyses. Also, outline the steps management would take to reduce these costs.
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