evaluation dynamics An apparel manufacturer centrally plans production sehedules and treats each manufacturing facility as a cost center. Well-engineered standards are in place for each facility, and the major evaluation measure is cost incurred relative to budgeted cost given the output achieved. Labor, material, and overhead variances are examined;

and output quotas are elosely monitored.

Depending on market conditions, the production plan will be revised on a monthly basis. It also tums out that a facility that has exceeded its output quota can expect a more ambitious quota whenever the sehedule is revised.

An internai review of operations has discovered the production managers routinely hold back some output wheneverthey exceed theirquota; this safety stock is then used to cushion the inevitable shortfall when the quota is not met. In response, the review team has recommended the manufacturing facilities be upgrade d to profit centers. This would, they argue, elevate the prestige of the production managers, make them more conseious of the larger goal of profitability, and better align their local interests with those of center. Evaluate the review team's suggestion.

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