The correct answer is: Only I and II follow.
The first course of action, investigating the functioning of the purchase, production, and quality control departments, is necessary to determine the root cause of the problem. The second course of action, inspecting all the valves rejected by Company X, is necessary to verify the quality of the valves and to identify any specific issues. The third course of action, informing Company X that steps have been taken for improvement and renegotiating the schedule of supply, is premature until the root cause of the problem has been identified and steps have been taken to address it.
Here is a more detailed explanation of each course of action:
- Course of action I: Investigating the functioning of the purchase, production, and quality control departments is necessary to determine the root cause of the problem. If the valves were rejected because of inferior quality material, then the purchase department may need to be investigated to determine how the inferior material was purchased. If the valves were rejected because of poor craftsmanship, then the production department may need to be investigated to determine how the poor craftsmanship occurred. And if the valves were rejected for both reasons, then both the purchase and production departments may need to be investigated.
- Course of action II: Inspecting all the valves rejected by Company X is necessary to verify the quality of the valves and to identify any specific issues. This will help Company A to determine whether the problem is isolated to the first lot of valves that were supplied to Company X, or whether it is a more widespread problem. If the problem is isolated to the first lot of valves, then Company A may be able to resolve the issue by simply replacing the defective valves. However, if the problem is more widespread, then Company A may need to take more extensive steps to address it.
- Course of action III: Informing Company X that steps have been taken for improvement and renegotiating the schedule of supply is premature until the root cause of the problem has been identified and steps have been taken to address it. If Company A informs Company X that steps have been taken for improvement before actually taking any steps, then Company X may be less likely to trust Company A in the future. Additionally, if Company A does not take any steps to address the problem, then Company X may be more likely to cancel the entire order, even if Company A has informed Company X that steps have been taken for improvement.
Therefore, the only course of action that is necessary at this time is to investigate the functioning of the purchase, production, and quality control departments. Once the root cause of the problem has been identified and steps have been taken to address it, then Company A can decide whether to inform Company X of the steps that have been taken and to renegotiate the schedule of supply.