Question : Case Study 12:
EFG Manufacturing is a company that produces consumer goods. The management team at EFG wants to implement a robust control system to improve productivity and optimize resource utilization.
Question:
Which step in the controlling process involves identifying the causes of deviations at EFG Manufacturing?
Option 1: Setting performance standards.
Option 2: Measuring actual performance.
Option 3: Comparing actual performance with standards.
Option 4: Taking corrective action.
Correct Answer: Taking corrective action.
Solution : The correct answer is (d) Taking corrective action.
In the controlling process at EFG Manufacturing, the step that involves identifying the causes of deviations is "Taking corrective action." When deviations between actual performance and established standards occur, it's important to investigate the underlying causes. This step helps the management team understand why the deviations happened and what factors contributed to them. Once the causes are identified, appropriate corrective actions can be taken to address the issues, bring performance back in line with the standards, and prevent similar deviations in the future.
