Standard Cost

Ian, the Production manager was quick to respond. "It wasn't our fault.

Oliphant's, the milling machine suppliers guaranteed that it would take only 8

days to run the new machines in. In the event, the computers that controlled the

machines could not stand the high temperatures and high humidity in the

production area so they kept malfunctioning. We retrofitted each station with its

own air conditioner to keep the computers running, but that put us way behind

schedule. Oliphant's say that the milling machines were fine, it was the

computers that were faulty, and that was not part of their contract. The computer

suppliers say that their equipment was never intended to run in the equivalent of

a steam bath, and they refused to take responsibility. We will just have to write

that off to experience. I might add that if you had followed my original proposal

and bought the installation as a turnkey operation it would have been the

contractor's problem, not ours. We may have saved about $5,000 by letting the

sub-contracts out separately, but we lost in the end. I don't like to say I told you

so, but I did! Now we have an embarrassing result. The budget was for 10 days

of set-up and 20 days of production. We actually had 20 days of set-up and 10

days of production.

Henry was not convinced. "Even if what you say is true it does nIan, the Production manager was quick to respond. "It wasn't our fault.

Oliphant's, the milling machine suppliers guaranteed that it would take only 8

days to run the new machines in. In the event, the computers that controlled the

machines could not stand the high temperatures and high humidity in the

production area so they kept malfunctioning. We retrofitted each station with its

own air conditioner to keep the computers running, but that put us way behind

schedule. Oliphant's say that the milling machines were fine, it was the

computers that were faulty, and that was not part of their contract. The computer

suppliers say that their equipment was never intended to run in the equivalent of

a steam bath, and they refused to take responsibility. We will just have to write

that off to experience. I might add that if you had followed my original proposal

and bought the installation as a turnkey operation it would have been the

contractor's problem, not ours. We may have saved about $5,000 by letting the

sub-contracts out separately, but we lost in the end. I don't like to say I told you

so, but I did! Now we have an embarrassing result. The budget was for 10 days

of set-up and 20 days of production. We actually had 20 days of set-up and 10

days of production.

Henry was not convinced. "Even if what you say is true it does nIan, the Production manager was quick to respond. "It wasn't our fault.

Oliphant's, the milling machine suppliers guaranteed that it would take only 8

days to run the new machines in. In the event, the computers that controlled the

machines could not stand the high temperatures and high humidity in the

production area so they kept malfunctioning. We retrofitted each station with its

own air conditioner to keep the computers running, but that put us way behind

schedule. Oliphant's say that the milling machines were fine, it was the

computers that were faulty, and that was not part of their contract. The computer

suppliers say that their equipment was never intended

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