Birch Paper Company - Case Study

To:         Commercial Vice President          birchen radical caller-out Although the current fiscal implications for Birch Paper Company nuclear number 18 non substantial, as the contract in gesture is less than 5% of the glitz in any division, it is imperative form that Birch Company establishes and addresses its shift price policies and procedures with separately division. This impart ensure that the divisions are non putting their objectives ahead of the Companys and as a result, not increase the everywhereall revenues and gelt of Birch Paper Company. This report will highlight the issues while providing a boom analysis and recommendation for you to consider.                                             Sincerely,                                              In examining the information provided by Birch Paper Company (BPC) it became unmixed that due to the decentralized fashion in which BPC operates its four proceeds divisions, the overall maximization of profits for BPC could be jeopardized if policies and procedures are not immediately established for put convert prices between divisions. Although, the decentralisation of BPCs divisions certainly have be successful in the past, it is diminutive for BPC to establish more elliptical guidelines to ensure that all the decisions that are made by each division are destruction congruent and maximizing BPCs profits.

The transfer price issue has recognise to your attention as a result of the Northern variablenesss signal for bids on corrugat! ed boxes from the Thompson region and from two outside companies, westernmost Paper Company and Eire papers Limited. Because each Birch Division manager is encouraged to go with the most cost in effect(p) supplier, Mr. Kenton was troubled, as he did not find the current internal transfer price competitive, as the offer was 10% over the going market rate. As a result of the current dysfunctional transfer set policy, the division would undoubtedly go with an external supplier, even... If you want to add a full essay, put it on our website: OrderEssay.net

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