Case: WALD PRESS
Wald Press, a large New York based printing firm for many years had close association with Campbell brothers, a Manhattan based publishing house, which supplied it with the major portion of its work. Campbell Brothers couldn't supply Wald Press with enough work to keep it operating at reasonable output level during depression of thirties. Thus Wald Press obtained contracts from other publishing firms. When Campbell brothers' sales increased again, they wanted Wald Press to drop outside contracts as they would supply them with enough of work. Wald Press is in dilemma as to drop or not to drop outside contracts.
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Wald Press, a large New York based printing firm for many years had close association with Campbell brothers, a Manhattan based publishing house, which supplied it with the major portion of its work. During the depression of the thirties, the publishing house had drop in its sales and could not supply Wald Press with enough work to keep it operating at a reasonable level of output. Wald Press obtained outside contracts to cure that. Wald Press told them that their work was being taken for an indefinite period of time and that they would not abandon it when business condition improved. In 1946 Campbell Brothers' sales increased and they wanted Wald Press to drop outside contracts and take all their remaining work. Outside contracts were not so profitable and would also have more finished goods inventory but were less exacting and an average outside book took 15% less time to produce than the average Campbell Brothers' book.
Billing on outside contracts amounted to $277,625.09 in 1944 and $242,348.55 in 1945. In the same years, production costs on these contracts were $324,625.55 and $232,698.49. In 1944, billings to Campbell Brothers totaled $1,172,862.06 and in 1945 they were $1,555,944.25. The Wald Press as a whole was making money,...