Statement: A 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. Courses of Action: I. Immediately suspend the production officer-in-charge. II. Sell the finished goods (produced for the export order) to other buyers. III. Upgrade/replace time-critical machinery to reliably meet future delivery windows. Which course(s) of action logically follow(s)?
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ANone follows
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BOnly I and II follow
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COnly II and III follow
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DAll follow
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EOnly II follows
Answer
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.