Engine Services, Inc.
Frey, Sherwood C. ...
Engine Services, Inc.
QA-0663 | Published August 9, 2005 | 6 pages Case
Collection: Darden School of Business
Product Details
Engine Services, Inc., is a world-class jet-engine overhaul center. An about-to-be-published quarterly report supports the perception that the overhaul facility is providing too much value relative to contractual guarantees. The root of the problem may be the "two standard deviations rule," which is being used to provide a cushion above the guarantee. Lower targets increase the chances of costly rework but save on the costs of initial work.
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