What do you mean by dual pricing, Strategic Management

Assignment Help:

Q. What do you mean by Dual pricing?

Dual transfer pricing means setting one transfer price for the internal seller and another transfer price for the internal buyer.  The basic idea is to encourage trade by creating the most beneficial price for both parties.

  • Internal seller: The transfer price received would be set at the external market price e.g. the price that would normally be charged to external customers.
  • Internal buyer: The transfer price paid would be set at the sellers variable (marginal) cost of production.

The difference between the two transfer prices would need reconciling by head office when preparing the group consolidated financial results.  Dual pricing is a similar approach to the opportunity cost approach which is discussed later.


Related Discussions:- What do you mean by dual pricing

Characteristics of organic verses mechanistic organisations, Characteristic...

Characteristics of 'organic' verses 'mechanistic' organisations   Organic Mechanistic Management Style Partici

Financial perspective for not-for-profit organisations, Q. Financial perspe...

Q. Financial perspective for not-for-profit organisations? The primary objective is profit for most organisations, but for an NPO they are non-profit making. Value for money (V

Advantages of time study, 1. Output standards are easily convertible into...

1. Output standards are easily convertible into labor costs per unit of output. 2. Output standards facilities scheduling and controlling the flow of production thr

Develop a performance measurement system, Recommended process to develop a ...

Recommended process to develop a performance measurement system  1. Senior management need to determine a clear vision of the change that will be required and demonstrate comm

Dominant strategy combination, Janet decides to play a game with her childr...

Janet decides to play a game with her children, Jay and Jill (who are fraternal twins) and Mo. Each child is in their own room and cannot communicate with each other. Suppose Jill

Describe the concept of virtual organisation, Question: (a) Describe th...

Question: (a) Describe the concept of virtual organisation. (b) ‘It is critical for an organisation to attain congruence between its strategy and organisational structure

Calculate capacity of the system, Cookie company is open for all day and ni...

Cookie company is open for all day and night, 24 hrs. Enough demand exists to keepthe cookie company busy 24 hrs. Assume you have: (i) One oven which can accommodate one tray

Management decision - making case problem, Louise Nance had working on the ...

Louise Nance had working on the assembly line of the Jackson Manufacturing Company for about six months. During recent weeks, her supervisor, Ben Miller, noticed that her productio

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd