50789125-BIRCH-PAPER-COM-PPT - CASE ON BIRCH PAPER COMPANY...

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1 CASE  ON BIRCH PAPER COMPANY Prepared by :-                       Dhruv Patel         Sandeep Chawla                       Sanjiv Patil Submitted to :-                            Richa madam
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BACKGROUND Medium sized, partly integrated company 3 products-white and Kraft papers and paperboard 2
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Judgment based on profit and return on  investment(ROI) Concept of decentralization-both authority and  responsibility 3
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SITUATION Northern and Thompson divisions together designed  box for Northern division Thompson division was reimbursed by northern  division for it’s designing and development. After finalization, apart from Thompson's bid it also  get offers from two outside companies. Company policy where each division manager had full  freedom and discretion to buy from anywhere .    4
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SITUATION Thompson’s  most materials from within company,  but sales mostly to outsiders. If Thompson gets bid Materials to be  procured from  southern division. 70% of out of pocket costs of $400 were of above  materials This constituted 60% of selling price 5
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BIDS(PER 1000) 6
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OTHER FACTORS Thompson division felt not received profit for  their development work, hence entitled to mark  up on production of box. “Costs variable for one division could be largely     
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This note was uploaded on 06/08/2011 for the course ECONOMICS 2008013000 taught by Professor Mercy during the Spring '10 term at Universitas Katolik Indonesia Atma Jaya.

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50789125-BIRCH-PAPER-COM-PPT - CASE ON BIRCH PAPER COMPANY...

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