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Hello Tutor,
For the material price planning variance we know it is not controllable and due the change in prices of the market
but for operational variance of material price if the the actual price is more than the revised. Here we will say that it is the responsibility of the purchasing manager because may be he was not ale to negotiate a good price of the material.
But what about if the material become scarce and the prices has gone up when the material were wanted and ordered
so here even it is an operational variance but it not under control of the manger because the price has gone up .Can you please solve this issue,
Thanks.
If the material becomes scarce and the prices increase when the material is wanted and ordered, it can still be considered an operational variance. In this case, it is not under the control of the manager as the price increase is due to external factors such as market conditions and availability of the material. Therefore, the manager cannot be held responsible for this particular operational variance.
Hi,
So even generally the operational variance is controllable .
Only in this case the manager will not be held responsible.
am I right?
Thanks a lot for clarification.
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