Statement: The Company X has rejected first lot of values supplied by Company A and has cancelled its entire huge order quoting use of inferior quality material and poor craftsmanship.

Courses of Action:

I. The Company A needs to investigate functioning of its purchase, production and quality control departments.

II. The Company A should inspect all the valves rejected by Company X.

III. The Company A should inform Company X that steps have been taken for improvement and renegotiate schedule of supply

Only I and II follow

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Only II follows

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II, and either I or III follow

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All I, II and III follow

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Solution

The correct option is A
Only I and II follow

First of all, company A should inspect the rejected valves to ensure if they are really sub-standard. If yes, it should scrutinise its working thoroughly and remove its lackenings, be it in the quality of raw material or craftsmanship. So, both I and II follow. III seems to be a far-off action which can be implemented only after the first two steps are put into practice. Thus, III does not follow.

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Similar questions

Q. Q. Statement: The Company Bentley has rejected the first load of valves supplied by Company Mercedes and has cancelled its entire huge order quoting use of inferior quality material and poor craftsmanship.

Assumptions:
(I) The Company Mercedes needs to investigate functioning of its purchase, production and quality control departments.
(II) The Company Mercedes should inspect all the valves rejected by Company Bentley.
(III) The Company Mercedes should inform Company Bentley that steps have been taken for improvement and renegotiate schedule of supply.

Q. Each question below contains a Statement and two Courses of Action I and II. Assuming the statements to be true,decided which of the two suggested Course of Action logically follows, using the Code given below.
Statement : The sale of a particular product has gone down considerably causing great concern to the company.
Course of Action:
I. The company should make a proper study of rival product in the market .
II. The price of the product should be reduced and quality improved.

Mable Company is manufacturing health powders and chywanprash for domestic and export markets. Mable has enjoyed a substantial market shares and also has a loyal customer following. However, it has been facing problems because they haven’t been able to meet sales targets and the required customer satisfaction. Also, the health market in Indian has grown tremendously and new players have come with better technology and pricing thus causing problems for the company. Mable plans to revamp their controlling systems and take other steps necessary to rectify the problems they are facing.

(i) Identify the benefits Mable company will derive from a good control system?

(ii) How can the company relate its planning with control in this line of business to ensure that its plans are actually implemented and targets attained?

(iii) Specify the steps in the control process that the company should follow to remove the problems it is facing?

(iv) What techniques of control can the company use?

Statement: The company has decided to increase the price of all its products to tackle the precarious financial position.

Assumptions:

I. The company may be able to wipe out the entire losses incurred earlier by this decision.

II. The buyers may continue to buy its products even after the increase.

III. The company has adequate resources to continue production for few more months.

Mable Company is engage in manufacturing of health powders and chyawanprash for domestic and export markets. Mable company has enjoyed a substantial market share and had a loyal customer following. However, it has been facing problems because they haven't been able to meet sales targets and the required customer satisfaction. Also, health market in India has grown tremendously and new players have come with better technology and pricing, thus, causing problems for the company. Mable Company plans to revamp their controlling systems and take other steps necessary to rectify the problems they are facing.

(i) Specify (only those) steps in the conrolling that the company should follow to remove the problems it is facing.

(ii) How can the company relate its planning with control in this line of business to ensure that its plans are actually implemented and targets are achieved. (Relate this in the context of the case)

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