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Course of Action

Q1: 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:
  1. The Company A needs to investigate functioning of its purchase, production and quality control departments.
  2. The Company A should inspect all the valves rejected by Company X.
  3. The Company A should inform Company X that steps have been taken for improvement and renegotiate schedule of supply.

A Only I and II follow

B Only II follows

C II, and either I or III follow

D All I, II and III follow

E None of these

ANS:A - Only I and II follow

Explanation: 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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