"Only a 5% increase in labour cost may be more troublesome than a 15% increase in postal charges."

Identify the concept pointed out in the statement.

Critical point control

The correct answer is Option (2) → Critical point control.

Critical Point Control: It is neither economical nor easy to keep a check on each and every activity in an organisation. Control should, therefore, focus on key result areas (KRAs) which are critical to the success of an organisation. These KRAs are set as the critical points. If anything goes wrong at the critical points, the entire organisation suffers. For instance, in a manufacturing organisation, an increase of 5 per cent in the labour cost may be more troublesome than a 15 per cent increase in postal charges.