"Certainly, we'll rectify that as a gesture of goodwill."
Guideline: Own Policy
Description:
This
term refers to those costs that must be borne by the Service Department
that cannot be reclaimed or charged on to warranty or any other
Department.
Example:
Let's
say that three days ago you fitted a new exhaust system for one of
your customers, and now they are back in front of you with a problem.
They are saying that the exhaust system is rattling and of course they
are not happy.
Naturally,
you cannot expect the customer to pay any more money, as they have only
just paid you to have the exhaust system fitted. Therefore you agree to
rectify the problem for the customer, and the question is who pays the
bill?
Discussion:
Since
this job is the direct responsibility of the Service Department, it
cannot be charged onto warranty or any other department and therefore
the hours spent putting the right accounted for within Rectification in your management accounts.
Related Terminology:
This term is also known as Policy Adjustments or Goodwill.