Issues

1. Danshui is underproduction Danshui plant was in a third month of a 12 month

contract were it requires assembling 2.4 million of Apple iPhones. So it is expected to
produce 200,000 iPhones monthly. However, the production was only 180,000 units
per month.
2. Lack of qualified labour - Danshui assembled electronic products for companies
wanted to save labor costs by using semiskilled labor.
3. Insufficient experience to manage operation Although increasing the labor wages by
30%, Danshui was unable to attract enough qualified labors. Assembly of iPhones was
different from that of hard drives in which Danshui had to expertise.
4. Installation damages Danshui had trouble with the Samsung flash memory
installation as they are damaged by heat during installation.
5. Performance evaluation using standard cost Danshui was using static budget instead
of flexible budget while comparing the actual production.