Hay Minion Inc. is an agricultural machinery manufacturer. With agriculture becom-ing more and more industrialized in many
Question:
Hay Minion Inc. is an agricultural machinery manufacturer. With agriculture becom-ing more and more industrialized in many markets, Hay Minion’s customer base is increasingly marked by big cooperatives and large landowners, who are all very price-sensitive. Hay Minion, therefore, wants to start an efficiency improvement initiative together with two of its key suppliers. One of them, Shafts United, is a family-owned and family-run manufacturer that has a long-standing business relationship with Hay Minion. Shafts United clearly depends on its business with Hay Minion. The second target supplier, Global Screws Inc., is a large multi-national group that serves a large customer base in various industries. Hay Minion is an important, but not business-critical, customer for Global Screws.
Hay Minion wants to propose open book accounting to both suppliers but recognizes that the initial situation differs between the companies. How could a workable OBA solution look like that helps Hay Minion identify efficiency gaps, but takes into account the particular characteristics of the two different supplier relationships? Should Hay Minion aim for a unified scheme or rather go for two separate agreements?
Step by Step Answer:
Management Accounting In Supply Chains
ISBN: 978-3658412999
2nd überarb. U. Erw. Edition
Authors: Andreas Taschner, Michel Charifzadeh