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Hi Dear Tutor, the world commodit price increased by 20% which is the uncontrollable factor
Also the hotel chain made an unexpected request for an immediate design to change pillowcases so the new design required 10% more-here is if the hotel decided on changing the design do we consider it operational variance?if the hotel changes the design it is operational varience because there is not mentioned such as its design is changed to meet the world’s cotton deisgn criteria. did i understood correctly?
I found it this is because as the production falls customers refuse buying it therefore it is uncontrollable factor.
The extra 10% cotton is a planning variance. They had to change their plans (their design) at the start of the month.
It is only if they actually use more or less than the new standard usage that there is an operational variance, because that would mean something has gone wrong with their operations.
Yes – it was a change in the requirement which is why they had to change their plans.
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