Statement:\nA huge export order was cancelled because the company failed to adhere to the delivery timeframe. The company is now likely to incur losses this financial year.\n\nCourses of Action:\nI. Immediately suspend the production officer-in-charge.\nII. Sell the finished goods (produced for the export order) to other buyers.\nIII. Upgrade/replace time-critical machinery to reliably meet future delivery windows.\n\nWhich course(s) of action logically follow(s)?

Difficulty: Medium

Correct Answer: Only II and III follow

Explanation:


Introduction / Context:
The problem is financial loss due to a missed delivery window. Sensible actions should minimize current loss (monetize inventory) and prevent recurrence (process/capacity improvements). Punishment without investigation rarely addresses root causes like bottlenecks, breakdowns, or unrealistic schedules.


Given Data / Assumptions:

  • Order cancelled strictly for timeline non-compliance.
  • Inventory exists (finished or near-finished).
  • Underlying constraints may include machinery downtime, capacity misplanning, or process issues.


Concept / Approach:
Apply immediate mitigation plus structural correction. Evaluate each course for relevance, feasibility, and proportionality relative to the stated cause (timeframe slippage).


Step-by-Step Solution:

1) I (suspend officer immediately): Premature without fact-finding; might harm morale and continuity; not logically necessary from the statement alone.2) II (sell goods elsewhere): Recovers cash, reduces carrying cost; directly mitigates loss.3) III (upgrade machinery): Addresses chronic lateness risks (MTBF/MTTR, throughput); aligns with future reliability.4) Hence, Only II and III logically follow.


Verification / Alternative check:
Standard responses include expedited secondary sales, renegotiation, OEE improvements, and critical equipment upgrades.


Why Other Options Are Wrong:

• I: Lacks due process; does not fix capacity or scheduling.• All follow: Fails due to I.• None / Only II: Omits needed long-term fix.


Common Pitfalls:
Scapegoating vs. systems fixes; ignoring salvage opportunities.


Final Answer:
Only II and III follow.

More Questions from Course of Action

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