The vendor under took to give free service for repairs and maintenance...
Background: The vendor promised to give free service for repairs and maintenance of the truck for two years. The estimated repair charges were Rs 1200 per truck, of which Rs 300 was for the first year and Rs 900 for the second year.
Actual Expenses: The total actual expense for repair and maintenance during the period was Rs 750 in 1996, Rs 1500 in 1997, and Rs 1600 in 1998.
Explanation: The vendor promised to provide free service for repairs and maintenance of the truck for two years. The estimated repair charges per truck were Rs 1200, of which Rs 300 was for the first year and Rs 900 for the second year. However, the actual expenses incurred during this period were higher than the estimated costs.
In 1996, the actual expense for repair and maintenance was Rs 750, which was lower than the estimated cost of Rs 300 for the first year. However, in 1997 and 1998, the actual expenses were higher than the estimated costs. In 1997, the actual expense was Rs 1500, which was higher than the estimated cost of Rs 900 for the second year. Similarly, in 1998, the actual expense was Rs 1600, which was also higher than the estimated cost of Rs 900 for the second year.
Conclusion: The vendor promised to provide free service for repairs and maintenance of the truck for two years, but the actual expenses were higher than the estimated costs. The company should review its maintenance and repair policies to ensure that they are cost-effective and efficient.