Birch Paper
CMA 302 – Tutorial Case Study: Final Draft
Birch Paper Company
1. Background
Birch Paper Company is a medium sized partly integrated company that produces Kraft papers and paperboard. There are four producing divisions and one timberland division which supplies part of the company’s pulp requirements. The divisions are
- Northern Division - Southern Division - Thompson Division - Division 4 - Timberland
Each division is operating independently with its own division manager. Also, each division’s performance had been judged on its profit and return on investment (ROI). The company policy of decentralizing responsibility and authority for all decisions except those relating to overall company policy, has been operated with the divisions.
Company policy states that each division manager is free to buy from whatever supplier he/she wished and also it could be on sales within the company.
Improvement has attributed upon the concept of decentralization that has applied to the company.
(as the company’s profits and competitive position has been improved)
2. Facts
- The Northern Division had designed a special display box for one of its papers in conjunction with the Thompson Division, which was equipped to make the box.
- Thompson Division was reimbursed for the cost of its design and development work
– Thompson Division usually sourced its supply’s in house from the Southern division. In this case material cost $280 of the total cost of $400 per thousand boxes.
3 – Southern division sold its materials at market price of $280 with a cost of about $168 leaving it with a profit of $112 or 40%.
4 – Northern division received 3 Quotes to make the box’s,
- Thompson division : $480,
- West Paper Company : $430
- Eire Paper Company : $432
5 – Eire paper would purchase outside liner from southern division for $90 per 1000 & it would be printed by Thompson division for $30 per
Birch Paper Company
1. Background
Birch Paper Company is a medium sized partly integrated company that produces Kraft papers and paperboard. There are four producing divisions and one timberland division which supplies part of the company’s pulp requirements. The divisions are
- Northern Division - Southern Division - Thompson Division - Division 4 - Timberland
Each division is operating independently with its own division manager. Also, each division’s performance had been judged on its profit and return on investment (ROI). The company policy of decentralizing responsibility and authority for all decisions except those relating to overall company policy, has been operated with the divisions.
Company policy states that each division manager is free to buy from whatever supplier he/she wished and also it could be on sales within the company.
Improvement has attributed upon the concept of decentralization that has applied to the company.
(as the company’s profits and competitive position has been improved)
2. Facts
- The Northern Division had designed a special display box for one of its papers in conjunction with the Thompson Division, which was equipped to make the box.
- Thompson Division was reimbursed for the cost of its design and development work
– Thompson Division usually sourced its supply’s in house from the Southern division. In this case material cost $280 of the total cost of $400 per thousand boxes.
3 – Southern division sold its materials at market price of $280 with a cost of about $168 leaving it with a profit of $112 or 40%.
4 – Northern division received 3 Quotes to make the box’s,
- Thompson division : $480,
- West Paper Company : $430
- Eire Paper Company : $432
5 – Eire paper would purchase outside liner from southern division for $90 per 1000 & it would be printed by Thompson division for $30 per