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

Briefly explain the it merger process, Question: (a) Company mergers a...

Question: (a) Company mergers are major change projects. Briefly explain the IT merger process involved. (b) A study showed that successful steering committees introduce a

Cadbury dairy milk, Value proposition and product customer connect of cadbu...

Value proposition and product customer connect of cadbury dairy milk

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

Q. 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 c

Explain about hopwood’s self-control, Q. Explain about hopwood’s Self-contr...

Q. Explain about hopwood’s Self-control? Self-regulation e.g. members of staff or managers exerting self-control by the modification of their own behaviour.  This is essence de

astro line, (A)    What is the optimal solution, i.e., how many units of e...

(A)    What is the optimal solution, i.e., how many units of every watch should be formed to maximize daily profits and how much daily profit will the company create? (B)    How m

Tangy spices ltd, what strategic alternatives followed by Tangy spices ltd?...

what strategic alternatives followed by Tangy spices ltd?

Describe the elements of external environment analysis, Question 1: (a)...

Question 1: (a) What is diversification? Distinguish between the different types of diversification. (b) Give the advantages and disadvantages of these types of diversifica

Focused factories - limited vertical integration, Focused Factories - Limit...

Focused Factories - Limited Vertical Integration Japanese companies prefer specialisation (derived from Adam Smith's theories on division of labour), with a limited or focused

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