Question

“In a manufacturing organisation, an increase of 5 percent in the labour cost may be more troublesome than a 15 percent increase in postal charges”. The above is an example of

• A. Critical point control
• B. Taking corrective action
• C. Analysing deviation by management by exception technique
• D. Feedback

Hint:

\[ \mathrm{Management\ by\ Exception} \] focuses on: \[ \mathrm{Important\ Deviations} \] rather than every small variation.

Answer 1

The Correct Option is C

Concept: Management by Exception focuses management attention on significant deviations that seriously affect organisational performance. Small deviations in important areas may be more serious than larger deviations in less important areas.

Step 1: Understand the statement.
The question compares: \[ 5\%\ \text{increase in labour cost} \] with: \[ 15\%\ \text{increase in postal charges} \] Labour cost has a greater impact on manufacturing cost than postal expenses. Thus, management focuses on the more critical deviation.

Step 2: Identify the concept used.
This situation represents: \[ \mathrm{Management\ by\ Exception} \] where important deviations are analysed carefully. Thus, the correct option is: \[ \boxed{\mathrm{Analysing\ deviation\ by\ management\ by\ exception\ technique}} \]

Step 3: Analyze remaining options.
Critical point control Focuses on key result areas but not specifically on deviation comparison. \[ \Rightarrow \mathrm{Incorrect} \] Taking corrective action Occurs after deviation analysis. \[ \Rightarrow \mathrm{Incorrect} \] Feedback Refers to performance information returned to management. \[ \Rightarrow \mathrm{Incorrect} \]

Step 4: Identify the correct option.
Hence, the correct answer is: \[ \boxed{\mathrm{(C)}} \]