A garments factory has 60 employees.Out of these 60 employees, 20% i-e 12 workers are involved...

A garments factory has 60 employees.Out of these 60 employees, 20% i-e 12 workers are involved in aparticular project. The remaining is not directly involved in thatproject. Out of the given budget of the project, the factory isfacilitating and giving 80% of their total employees who are 48 innumber and giving extra benefits to them. In connection with theproject, the factory is working on a shipment. It has been observedat the end of delivering the shipment that the entire project givesless profit than expected. The actual cost on that particularproject is more than the estimated cost. Identify which factor(s) causes the increase in cost and why thefactory management is unable to attain the expected profit out ofthe given budget? Also suggest measures for the factory managementthat how could they control the cost on that particular project?

Solutions

Expert Solution

Factors which caused the increase in cost and factory was unable to attain the expected profit out of given budget are as follows-

A. There was not proper allocation of resources on this project because this was an important project for the company and the number of people who were allocated to this project as well as the number of total budget allocated to this project was less, so there should have been an adequate allocation of resources.

B.therw should have been proper control and management in respect to this budget and the responsibility must have been fixed.

C.the control procedures needed to be accurately followed and there should have been regular check in order to know the deviation of actual from standard

D. There should have been a proper monitoring of this project and continuous motivation of the employees by actively allocating the resources

there should have been a proactive management on the part of the company so that the cost should have been properly managed by setting out the budgeted cost and comparing with the actual cost so that the variation should have been known in advance and they should have been fixed continuously in stages in order to attain the desired objective.

Hence, the company should have been proactively manage the cost of the product so that the control related to the project should have been adequately ascertained

jeff jeffy answered 1 year ago

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