The Assembly Division of Canadian Car Company Has Offered to Purchase

question 46

Essay

The Assembly Division of Canadian Car Company has offered to purchase 90,000 batteries from the Electrical Division for $104 per unit.At a normal volume of 250,000 batteries per year, production costs per battery are as follows:
The Electrical Division has been selling 250,000 batteries per year to outside buyers at $136 each.Capacity is 350,000 batteries per year.The Assembly Division has been buying batteries from outside sources for $130 each.Required:
a.Should the Electrical Division manager accept the offer as is, make a counter offer, or reject the offer? Explain.
b.From the company's perspective, will the internal sales be of any benefit? Explain

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Definitions:

Long-Range Strategic Plans

Strategic plans that outline an organization's goals, strategies, and actions over an extended period, usually three to five years or longer, to achieve long-term objectives.

Voluntary Family Activities

Activities organized and participated in by employees and their families outside of work, often sponsored or supported by the employer to promote work-life balance.

Duty to Accommodate

The legal and ethical obligation of employers to adjust working conditions or procedures to address the needs of employees with disabilities.

Canadian Human Rights Act

Legislation in Canada that prohibits discrimination on various grounds such as race, gender, and disability.