Dispute Resolution: Facets of Transfer Pricing

Conclusion: We should go with Option 1. While we will have to terminate employees, which will cost us $6 million, segmenting our products across under-utilized factories will increase productivity and efficiency in our product line therefore resulting in a higher NPV and future

The workers of Tesco PLC are interested in the level of profit which is due to workers would want to receive a higher wage, incentives and more flexible work hours. So, the workers will feel motivated to do better among all the other workers. As this could lead to a promotion to move up in their career at Tesco PLC. The workers would want to be working in clean and safe environments and that their job at Tesco PLC is secure. Therefore, from this the level of profit is important as this can be reinvested for the higher wages or can be reinvested into the store to fix any issues. For example, more cleaners in case of a hygiene issue.

We decided to decrease the price of mountain bike production from $134 per bike to $108. The difference of $26 for 11,000 units results in a saving of almost $300,000. In the meanwhile, we also decided to dump our finish goods inventory, incurring a loss of $175,000. We decided to increase our capacity from 20,000 to 27,500 and efficiency from 1,000,000 to 2,000,000. We want to avoid increasing capacity significantly in order to avoid low efficiency. At the same time we want to keep our wastage at a minimum. We reduced our retail margin for the bike and sports store to 20% while reducing the discount stores to 27%. These new retail margins

When the employees sweat out to reach the production targets, they give their best and the mind-set or the attitude of the employees towards the organization changes. The management should set up monthly workshops to interact with their employees, thus making the employees feel that the management is well within their reach and is ready to listen to their pleas. Organizing such workshops will stimulate the feedback process which will help the management to cut down on production and sales costs in turn maximising the returns (Arnolds & Boshoff, 2002). Organizing technical trips and field tours further improves the management employee relationship as this allows the two parties to work together in a different environment and gain better ideas. The concepts of the ERG (existence, relatedness, growth) Model can be applied by recognizing individual employees who attain the highest productivity and then rewarding them with various benefits such as growth. Growth is what employees look for in any organization as the more

Managers need to ensure that targets are met and improvements if necessary are made. They need to plan ahead to ensure that their targets are achievable and control the workload to ensure all activities are carried out effectively.

In order for any business to be successful they would need to know how to make the most profit for the goods they are producing and selling.

If Jones-Blair cut prices by 20%, they would need to maintain the profit of $1.14M to keep the status quo. The contribution margin right now is 35%, if the prices were cut by 20%, the contribution margin decreases to 15%. 35% is converted into .35 and 20% is converted into .20. The required sales in order to maintain the status quo if prices were reduced by 20% is 28M. This is found by finding the gross margin which is current sales multiplied by the contribution margin, 12M * .35 = 4.2M. We would then need to maintain the same gross margin to find out the required sales, (12M + x) * .15 = 4.2M. Computation equates x to be $16M. The $16M that is required to maintain the same gross margin, added to the $12M of the current sales equals $28M. In order to maintain the current profit, Jones-Blair would have to increase sales by $16M, more than double the current amount. If chosen, this alternative would be a very poor choice.

Firstly, it is strategically beneficial for the company to continue to produce products A, C, and D. However, you should discontinue production of product B, as it is unprofitable and is losing the company money. Product B has been losing the company $2,307 per reel. If the company deems it is essential to keep producing product B in order to retain their customer base, we recommend changing the production schedule. For example, during times of lower demand, you can produce products such as B that do not make as much money, but you will still retain your customers’ business and satisfy their needs. During times of higher demand, by discontinuing the production of product B, the company will be able to produce the more profitable products such as A, C, and D.

Employees require motivation, reward and encouragement for maximum productivity. Punishment to workers not performing is also mandatory to prevent cases of poor performance. Ethical considerations must be looked at and employees must follow rules and company policies for plans made by management to be successful. Workers and management relate like a family and this has enabled the company perform to its expectation. These plans are aimed at ensuring total customer satisfaction and delight.

Productivity is the cornerstone of any organizations profitability. This means that any organization can be deemed productive if all its moving parts are working

Kirkham’s strategy was to integrate the different systems of each division into an “all-inclusive” product and also to involve all the divisions together with regards to product development, instead of letting each division be responsible for just products within that division. Mr. Donaldson chose Kathleen Quinn, Vice-President of R&D, to be responsible for coordinating the development of new products. This proved to be quite a challenging task considering that each managing director (of each division) still retained responsibility for the turnover and profitability of their respective decisions and also for the strategies to achieve the goals of their divisions. In addition, regardless of the trend of their customers in purchasing integrated systems, the majority of each division’s turnover came from the sale of stand-alone products.

The productivity of any organization depends on the satisfaction of the employees, as happier employees also make more profit as they work faster and harder.

One of the main objectives in any organization is to have a team of employees that is able to work at their maximum best to meet the set organizational targets. For this objective to be achieved, employees of the organization should be fit enough to ensure maximum production. Organizations that appreciate that success is mainly dependent on the output of their employees place priority on the wellbeing of employees.

Although production needs are being met, improvements in productivity are always at the forefront of management’s thoughts. Doing more with less is a constant effort for middle management and hourly laborers. Over all the

* Management needs to be transparent and make sure to communicate with employees, especially when the organizations is making