...Case Study on Transfer Pricing: BYRCH’S PAPER COMPANY If I were to price these boxes any lower than $480 a thousand, said James Brunner, manager of Byrch Paper Company Thompson Division, I’d be countermanding my order of last month for our salesmen to stop shaving their bids and to bid full cost quotations. I’ve been trying for weeks to improve the quality of our business, and if I turn around now and accept this job at $430 or $450 or something less than $480, I’ll be tearing down this program I’ve been working so hard to build up. The division can’t very well show a profit by putting in bids which don’t even cover a fair share of overhead costs, let alone give us a profit. Byrch Paper Company was a medium-sized, partly integrated paper company, producing white and kraft papers and paperboard. A portion of its paperboard output was converted into corrugated boxes by the Thompson Division, which also printed and colored the outside surface of the boxes. Including Thompson, the company had four producing divisions and a timberland division, which supplied part of the company’s pulp requirements. For several years each division had been judged independently on the basis of its profit and return on investment. Top management had been working to gain effective results from a policy of decentralizing responsibility and authority for all decisions but those relating to overall company policy. The company’s top officials believed that in the past few years...
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...Aspen Institute Business and Society Program with the generous support of THE FUTURE OF FASHION: SUSTAINABILITY THROUGH THE LENS OF THE FASHION INDUSTRY* By: Jennifer Johnson & Gina Wu Companies across all industries are facing the challenges of business sustainability, debating how best to address these risky issues while also embracing their opportunities for competitive advantage. This Teaching Module uses the context of the fashion industry to discuss topics that are shaping the future of all industries. These topics include sustainable resource management, the challenges and opportunities of global growth, workforce management, and the role of ethical consumption in business. The fashion industry offers a compelling case study for exploring business sustainability issues. In the fashion industry, as in many industries, success requires highly developed sourcing, design, manufacturing, and marketing chains. Increasingly, success also means incorporating sustainability in resource and labor management, as firms realize that long-term corporate survival will depend on new ways of doing business. Climate change, resource challenges, new technologies and dramatic shifts in the global economy are already impacting the industry. The nexus of these concerns allows students to explore sustainability challenges while providing a framework for discussing new business models and management techniques for the future. Given its enormous reach and connection to important business...
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...CASE STUDY Chapter SIX CASE 6-1 Case Study on “Transfer Pricing Problems” Case SUMMARY Division A of Lambda Company manufactures product X, which is sold to Division B as a component of product Y. Product Y is sold to Division C, which uses it as a component of Product Z. Product Z is also sold to customers outside of the Company. The intracompany pricing rule is that product are transferred between divisions as standard cost plus 10 percent return on inventories and fixed assets. Case Questions Question a: with transfer price calculated in Problem 1, is Division C better advised to maintain its price at $28 or follow competition in each of the instances above? Answer: Under possible competitive price $27.00 If company maintain the price at $28, the profit=(28-23.6) ×9,000=39,600 If company follow the possible competitive price at $27, the profit= (27-23.6) ×10,000=34,000 Under possible competitive price $26.00 If company maintain the price at $28, the profit=(28-23.6) ×7,000=30,800 If company follow the possible competitive price at $26, the profit= (26-23.6) ×10,000=24,000 Under possible competitive price $25.00 If company maintain the price at $28, the profit=(28-23.6) ×5,000=22,000 If company follow the possible competitive price at $25, the profit= (25-23.6) ×10,000=14,000 Under possible competitive...
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...Breathing Shoes and Complementarities: How Geox has Rejuvenated the Footwear Industry Arnaldo Camuffo, Andrea Furlan, Pietro Romano and Andrea Vinelli MIT IPC Working Paper IPC-05-005 June 2005 We apply the related notions of complementarities and performance landscapes to study strategic positioning in the footwear industry. We use this theoretical framework to analyze Geox, an Italian footwear manufacturer that, in less than a decade, has grown to be one of the world largest brown shoe manufacturers, outperforming the industry in terms of market and financial results. We describe Geox’s choices within four stages along its value chain: product design, marketing and communication, production and supply chain, distribution and retail. We show that, though grounded on product innovation (the Geox breathes® patented system which allows ventilation in waterproof rubber sole shoes), Geox’s competitive advantage has not grown out of operational excellence in single activities in the business, but, rather, derives from a unique and consistent configuration of complementary activities. Such configuration represents an innovative strategic position and corresponds to a high performance peak in the footwear industry performance landscape. The case study provides anecdotal evidence in support of complementarity-based economic theory, showing how complementarities among activities help understand increasing returns to scale, firm size and business growth even without the standard assumptions...
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...Stakeholders The Ethic of Sustainability and the Natural Environment Evaluating Corporate Social Performance Economic Responsibilities Legal Responsibilities Ethical Responsibilities Discretionary Responsibilities Managing Company Ethics and Social Responsibility Ethical Individuals Ethical Leadership Organizational Structures and Systems Ethical Challenges in Turbulent Times Economic Performance Social Entrepreneurship Managerial Ethics and Corporate Social Responsibility LEARNING OBJECTIVES After studying this chapter, you should be able to do the following: 1 2 3 4 5 6 7 Define ethics and explain how ethical behavior relates to behavior governed by law and free choice. Explain the utilitarian, individualism, moral rights, and justice approaches for evaluating ethical behavior. Describe how individual and organizational factors shape ethical decision making. Define corporate social responsibility and how to evaluate it along economic, legal, ethical, and discretionary criteria. Describe four organizational approaches to environmental responsibility, and explain the philosophy of sustainability. Discuss how ethical organizations are created through ethical leadership and organizational structures and systems. Identify important stakeholders for an organization and discuss how managers balance the interests of various stakeholders. 118 Manager’s Challenge Timberland is known for great shirts and solid climbing boots. The company has had a good financial history with...
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...not required Even though more and more companies are providing sustainability reports there is no requirement to report or any required standards like GAAP. The Global Reporting Initiative (GRI) currently provides a framework, with over 3,500 companies filing under the GRI framework. However, given that there is no enforcement of reporting companies may select different levels of reporting and different indicators to report on as well. This results in varied reporting and sometimes very incomparable results. However, from an accounting perspective it is important to become familiar with these reports given the increase demand from stakeholders to have companies provide information about their sustainability initiatives. This case study is an exercise for you to become more familiar with sustainability reporting and its components and to identify best...
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...REPORTING ANALYSIS: FINANCIAL EVALUATION OF BOWATER INCORPORTED INTRODUCTION Headquartered in Greenville, SC, Bowater Incorporated is a leading producer of coated and specialty papers and newsprint. Founded in 1881 in England, Bowater has evolved into an international public corporation that is among the largest manufacturer in North America. Bowater common stock (BOW) is listed on the New York Stock Exchange. It operates in five divisions: Newsprint, Coated Papers, Specialty Papers, Lumber and Market Pulp. There are currently 14 analysts following the stock. On January 29, 2007, Abitibi-Consolidated Inc. and Bowater Incorporated announced a definite agreement to combine in an all-stock merger of equals. On October 29, 2007, the completion of the transaction was announced by the two companies and the combination of Abitibi-Consolidated Inc. and Bowater Incorporated formed a new merger of AbitibiBowater. Bowater originally announced that over the next two years it is expected to realize in excess of $250 million in annualized synergies. The Company also expects to achieve a debt-reduction of $1 billion over the next three years in order to enhance its global competitiveness . AbitibiBowater focus is to provide access to a broad range of forest products and best-in-class customer service, as well as a relentless commitment to the environment. Several significant to rigorously evaluate Bowater financial evaluation. Now that the merger with Abitibi is now complete...
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...the social issues and thus creating profits in a socially responible way. Mention triple bottom line While traditional marketing is a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. (Kotler & Armstrong 2012, p. 5) This essay has been prepared to identify and understand the role of sustainabilty in marketing decision making and its impacts affecting current and future business operations. 1.1. Research Methods Data was collected based on qualitative research. Books, internet and online journals were used to identify different roles of sustainability in marketing. Sustainibilty of marketing by itself is a vast area for study, hence this paper will only focus and critically analysis some of the key aspects of s.m. The topics explored in this research are I. Role of sustainability in marketing II. 1. Sustainable Marketing practices adressing the triple bottom line. Sustainable marketing concept is quite fresh in todays organizaitons as more and more organizations are trying to bring in the sustainable marketing concept into their business operations and reaping long term benefits for themselves the consumers they serve and the environment from previous practices as shown in the diagram below. Fig: 01 – Moving Towards Sustainable Marketing (Belz & Peattie...
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...Total Plan Risk: Integrating Assets into a Consistent Risk Framework Dan diBartolomeo Northfield Information Services, Inc. FactSet PMW Conference, Atlanta , November 2002 Do We Want to Measure Risk or Manage It? § Measuring risk is an exercise in forecasting § Managing risk requires decision making § Managing risk well requires rational decision making based on an understanding of utility theory What Risks are of Concern to Us? § Asset/liability mismatch risks § Asset class volatility § Style and active management risks How about Multiple Portfolios? § The firm-wide (plan-wide) risk problem w Multiple portfolios with multiple benchmarks w Across countries, across asset classes w Mixture of liquid, and illiquid assets, derivatives w Need to integrate liabilities Approach Number #1 § Build factor risk model for each portfolio separately and aggregate the risks § Arises from the existing stock of models § Advantage is that you are probably using the same models at the portfolio level so you have internal consistency § Problems w Not intuitive, as you can’t add exposures w Lots of factors may lead to covariance matrix which is not positive definite w Use high frequency data or an EM algorithm w Inclusion of liabilities or illiquid assets Approach #2 § Proxy each asset class with indices and then use full covariance. Adapted from trading desk systems § Advantage is simplicity. Works well for asset classes where instruments within the class are homogeneous...
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...I certify that my work upholds the standards for Academic Honesty outlined in the Graduate Catalog. I have not: * Cheated Used or attempted to use crib sheets, electronic sources, stolen exams, unauthorized study aids in an academic assignment, or copied or colluded with a fellow student in an effort to improve my grade. * Fabricated Falsified, invented, or misstated any data, information, or citation in an academic assignment, field experience, academic credentials, job application, or placement file. * Plagiarized Used the works (i.e. words, images, other materials) of another person as my own words without proper citation in any academic assignment, including submission (in whole or in part) of any work purchased or downloaded from a Web site or an Internet paper clearinghouse. Additionally, works I have produced for prior classes have been properly cited and not represented (in whole or in part) as new work produced for this assignment. * Facilitated Academic Dishonesty Assisted or attempted to assist any person to commit any act of academic misconduct, such as allowing someone to copy a paper or test answers. Additionally, I certify that I have been informed of the resources provided by the university to teach students about academic honesty, including the Online Writing Center and Webster’s plagiarism tutorials. I understand that it is my responsibility to learn and apply the principles of academic honesty, and cannot argue ignorance should I be...
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...Evaluation of Financial Performance Financial Analysis - The process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. In addition, one key area of financial analysis involves extrapolating the company's past performance into an estimate of the company's future performance. Financial ratios are tools used to analyze financial conditions and performance. Financial analysis means different things to different people.Trade creditors are primarily interested in the liquidity of the firm being analyzed. Their claims are short term and the ability of the firm to pay these can best be judged by an analysis of its liquidity. On the other hands, the claims of bondholders are long term. They are interested in the cash flow of the firm to service debts over a long period of time. The bondholders may evaluate this by analyzing the capital structures of the firm, the major sources and users of fund, the firms’ profitability. Five Different groups of ratios have been developed: * Liquidity ratios - A class of financial metrics that is used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher...
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...Mudra Institute of Communication, Ahmadabad | LGBT Marketing | Innovative Marketing – Individual assignment | Ranajay sengupta | 18054 | 8/25/2012 | Contents Why gay market is lucrative 2 LGBT as a customer segment 3 Over-indexing and Consumption 3 Entertainment 3 Travel and Leisure 3 Internet usage 3 Brand Loyalty 4 LGBT signs and symbols 5 Segments which have used LGBT marketing 6 Lifestyle of a typical LGBT consumer 6 Mistakes to avoid while marketing to the LGBT community 7 References 9 Decades after invisibility and reaching critical mass, a breakthrough July 1991 article in the conservative Wall Street Journal called the lesbian and gay community "a dream market." Today the American market is estimated to be valued at $660 billion, projected to reach $835 billion by 2011 --based primarily on U.S. population growth and steady 7% representation of gays and lesbians within the overall population. In 2004, 36% of Fortune 100 companies have advertised directly to the lesbian and gay market, and American corporations now spend about $223.3 million annually in gay print media, according to the 2006 Gay Press Report from Rivendell Marketing and Prime Access, which tracks 284 U.S. gay press publications. Much more has been spent in sponsorships and online advertising, which the survey does not track. The situation is fast changing in India as well, OutNowConsulting.com, The London-based consultancy firm has been conducting surveys across...
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...CASSAVA LEAVES AS AN POTENTIAL EMULSION SURFACTANT FOR DETERGENTS ____________________ A Research Project Presented to the Faculty of the Science Technology and Engineering Batasan Hills National High School IBP Road, Batasan Hills, Quezon City ____________________ In Partial Fulfilment of the Requirements for the Research III ____________________ by Borromeo, Kristine Joy R. March 2016 CHAPTER I THE PROBLEM AND ITS BACKGROUND Background of the Study Almost every human uses detergents everyday, the problem is we had gone too far in using detergents. Detergents are for cleansing that are daily in use. They are becoming more and more expensive and on demand because of their increasing purposes. In this modern age, detergents are not as effective as what like they said in ads and commercials because sometimes too much chemicals re used which can affect its effectivity. The research is done to find out an alternative solution for the problem said in detergents using cassava leaves. Cassava leaves is common inside the community. The solution aims to produce the as an potential emulsion surfactant for detergents using the cassava leaves. The product does the same job as others but is more natural because an organic specimen is added. It contains less harmful chemicals. The said product will perform important functions in detergents cleaning such as loosening emulsifying and holding suspension until it can be rinsed (Healthy Cleaning 101, 2010 ) . ...
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...significantly important for fashion business due to consumers’ increasing awareness of environment. When a fashion company aims to promote sustainability, the main linkage is to develop a sustainable supply chain. This paper contributes to current knowledge of sustainable supply chain in the textile and clothing industry. We first depict the structure of sustainable fashion supply chain including eco-material preparation, sustainable manufacturing, green distribution, green retailing, and ethical consumers based on the extant literature. We study the case of the Swedish fast fashion company, H&M, which has constructed its sustainable supply chain in developing eco-materials, providing safety training, monitoring sustainable manufacturing, reducing carbon emission in distribution, and promoting eco-fashion. Moreover, based on the secondary data and analysis, we learn the lessons of H&M’s sustainable fashion supply chain from the country perspective: (1) the H&M’s sourcing managers may be more likely to select suppliers in the countries with lower degrees of human wellbeing; (2) the H&M’s supply chain manager may set a higher level of inventory in a country with a higher human wellbeing; and (3) the H&M CEO may consider the degrees of human wellbeing and economic wellbeing, instead of environmental wellbeing when launching the online shopping channel in...
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...dislocate their production and companies outside the domestic market. Such phenomenon, known as “delocalization of production”, can be defined as the social/ managerial/ organizational process through which firms not only deploy their sales on foreign markets, but they also draw supplies like raw materials, technology, facilities, equipment, financial resources and manpower. The aim of this paper is to provide an analysis on winning internationalization strategies, that will help a company to successfully penetrate a new market. Further on we will see a little case study on the shoes and accessories company Geox, performing an overview of its presence on international markets, providing a little historical background of the company and evaluating its competitiveness. Competition intensification on the global scale has lead an increasing number of companies, in the last decade, to seek new job opportunities on international markets. Internalization, today, is not only a way to increase the firm’s value, extends its competitive advantage and access to new opportunities. In our current economic environment it has become an useful and practically necessary way that may guarantee a firm’s outliving. Going international for a company means going through a tough and long process, that will change its assets completely and with no coming back. It involves quite a bit of transformations in several areas, like the financial layout, organizational and technical structure, position on...
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