Responsibility and controllability. Consider each of the following independent situations:

1. A purchasing agent forgot to order a part. A rush order had to be placed for the part, resulting in extra costs.

2. A supplier has increased prices ofthe materials ordered by a purchasing agent, resulting in higher costs of the materials purchased.

3. A higher-than-budgeted quantity of direct materials was used for the output. The supervi¬

sor of the production department correctly pointed out that it was due to the substandard quality ofmaterials purchased by the purchasing department.

4. A higher-than-budgeted quantity of direct materials was used for the output. The cause was traced to abnormal spoilage resulting from a faulty machine setting by the machine operator.

5. A higher-than-budgeted quantity of direct materials was used for the output. This hap¬

pened because of the spoilage occurring from the machine breakdown. The machine was to undergo regular maintenance last month. Flowever, maintenance was not performed because the maintenance department is behind schedule due to heavy labour turnover.

6. A newly appointed division manager has high labour costs as a result of the unfavourable terms of a labour contract negotiated by her predecessor. Her predecessor, who was retiring, according to one observer, “gave the store away during labour contract negotiations.”

7. A production department operated only at 80% of its capacity during a month. This was done at the instructions of the plant superintendent, who commented that increasing the department output will only build up inventory in the next production department, which is a bottleneck department.

Required Determine for each situation where

(a) responsibility and

(b) controllability lie.