The correct answer is option 1- Control by exception.
The concept highlighted here is Control by exception.
This approach focuses on monitoring only significant deviations from established standards, in this case, the permissible limit of defective bulbs. If defects exceed 5%, it triggers the need for supervisor attention.
Management by exception, which is often referred to as control by exception, is an important principle of management control based on the belief that an attempt to control everything results in controlling nothing. Thus, only significant deviations which go beyond the permissible limit should be brought to the notice of management. Thus, if the plans lay down 2 per cent increase in labour cost as an acceptable range of deviation in a manufacturing organisation, only increase in labour cost beyond 2 per cent should be brought to the notice of the management. However, in case of major deviation from the standard (say, 5 per cent), the the matter has to receive immediate action of management on a priority basis.
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