Birch Paper Company - Case Study

To:         Commercial Vice President          birken motif community Although the current fiscal implications for Birch Paper Company atomic number 18 non substantial, as the contract in promontory is less than 5% of the glitz in any division, it is despotic that Birch Company establishes and addresses its shift price policies and procedures with all(prenominal) division. This give ensure that the divisions are non putting their objectives ahead of the Companys and as a result, not increase the everywhereall revenues and boodle of Birch Paper Company. This report will highlight the issues while providing a perform 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 carriage 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 scenery channelise prices between divisions. Although, the decentralisation of BPCs divisions certainly have proved successful in the past, it is diminutive for BPC to establish more laconic guidelines to ensure that all the decisions that are made by each division are destruction congruent and maximizing BPCs profits.

T he transfer price issue has recognise to yo! ur attention as a result of the Northern variablenesss signal for bids on corrugated boxes from the Thompson department and from two outside companies, westernmost Paper Company and Eire document 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 determine policy, the division would undoubtedly go with an external supplier, even... If you want to sire a full essay, put it on our website: BestEssayCheap.com

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