Cost of production increased because of sudden increase in transportation cost, which resulted in lesser profits.

Which limitation of planning is highlighted in the aforesaid statement?

The correct option is: Planning may not work in a dynamic environment.

Explanation:
Planning is based on anticipating future events and making assumptions about the business environment. However, the business environment is dynamic and constantly changing due to various external factors such as economic policies, political shifts, social changes, technological advancements, or sudden fluctuations in costs (like transportation or raw materials).
In the given statement, the cost of production increased unexpectedly due to a sudden rise in transportation costs. Because this change was sudden and unforeseen, the existing plans could not accommodate it effectively, resulting in lesser profits. This scenario directly highlights the limitation that planning cannot foresee all future changes and, therefore, planning may not work in a dynamic environment where conditions change rapidly and unpredictably.