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Please right a problem statement for the case below. Aircraft manufacturers use job-order costing to track the cost of an airplane. Supply chain management and

Please right a problem statement for the case below. image text in transcribed
Aircraft manufacturers use job-order costing to track the cost of an airplane. Supply chain management and production controls also play an important part in managing and controlling production costs. But, try as they might, things don't always go according to plan. In the late 1990 s, The Boeing Company's top management had been seeking a merger with McDonnell-Douglas Corporation, whose board of directors was reluctant to approve a deal. Finally, the deal went through, and the world's largest aerospace company was born, a company that could compete in both the commercial and defense aeronautics markets and even in more speculative flight ventures like space shuttles and rockets. Unfortunately, as reported by BusinessWeek in May 2002 following a three-month investigation, "a disaster was quietly unfolding inside Boeing's sprawling factories-one that would ultimately...cause several executives to lose their jobs, and lead to claims of accounting fraud." During this period, high demand for Boeing's airplanes in a strong economy flew head on into a disrupted production environment caused by efforts to modernize manufacturing processes, leading to "a manufacturing nervous breakdown." The result was dramatically reduced profitability, a problem whose size was allegedly hidden from investors so that the inevitable drop in Boeing's stock price would not jeopardize the McDonnell-Douglas deal. Moreover, the BusinessWeek article reports that, "Boeing did more than simply fail to tell investors about its production disaster. It also engaged in a wide variety of aggressive accounting techniques that papered over the mess." After the merger with McDonnell-Douglas, the truth came out in the form of much lower earnings. In the years since the Boeing-McDonnell merger, the company has faced other highprofile production problems, and it seems to have taken a lesson from the earlier debacle. For example, beginning in the early 2000 s and through the present day, Boeing's new 787 model has faced a variety of problems: delays relating to subcontracting of construction and carbon fiber technology; groundings due to problems with lithium-ion batteries; and frustrating fuel system and engine problems. But in contrast to the secrecy surrounding production problems at the time of the McDonnell-Douglas merger, these challenges have played out in public with a reasonable degree of transparency from Boeing

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