Statement: Company X rejected the first lot of valves from Company A and cancelled the full order, citing inferior material and poor workmanship.\nCourses of Action:\nI. Company A should investigate its purchase, production, and quality control functions.\nII. Company A should inspect and analyze all rejected valves.\nIII. Company A should inform X about corrective steps and renegotiate delivery.

Introduction / Context:
Supplier rejection with cancellation signals systemic quality failure. A comprehensive response spans internal diagnosis, technical analysis, and customer confidence restoration.

Given Data / Assumptions:

• Material and workmanship defects cited.
• First lot already failed; larger business at risk.

Concept / Approach:
Root-cause analysis across procurement, production, QC (I) identifies process gaps. Detailed failure analysis (II)—material certs, hardness, dimensions, hydro tests—guides corrective action. Transparent communication (III) rebuilds trust and may salvage the contract with realistic schedules.

Step-by-Step Solution:
1) Isolate suspect batches; audit suppliers and specs (I).2) Perform teardown/testing; implement CAPA (II).3) Share corrective plan; propose re-inspection and revised timelines (III).

Verification / Alternative check:
Quality systems (ISO/TS) emphasize CAPA and customer communication after non-conformances.

Why Other Options Are Wrong:
Partial measures lack either diagnosis, fix, or stakeholder management.

Common Pitfalls:
Blaming sub-vendors without data; skipping validation runs.

Final Answer:
All I, II and III follow.