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Hi John!
Could you explain how mix and yield variance do not necessarily explain any quality issues?
-My confusion about this is that when an adv mix variance and a fav yield variance are obtained, then we will say that we’ve bought more of the expensive material and hence input more of the ‘higher quality’ material in the process. Therefore how they do not necessarily explain any quality issues?Thanks.
Why do you say that more expensive materials mean higher quality? That is not necessarily the case!
Watch my lectures again – orange juice might be more expensive than strawberry juice, but that has nothing at all to do with the quality!
I’ve got your point here.
But is there any relationship between mix and yield and quality of the product?
-In the syllabus the wider implications of changing the mix has an impact on cost as well as qualityOf course there can be a relationship between the mix variance and the quality – if they use more or less of a better (and more expensive) ingredient, then they might end up with a better or worse quality product.
However, as I replied before, the mix variance does not necessarily always explain quality issues.
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