Case 14-1: AB Thorsten 1. Which proposal should Gillot support -- the Swedish or the Belgian proposal?

Explain your answer . 2. Regardless of your answer to the previous question, if the plant were not built and the product were produced in Belgium and shipped to Sweden, what transfer price would be appropriate? (Note: You do not need a numeric transfer price, but rather you should describe how the transfer price would be determined.) 3. What changes in the management control systems would you recommend to Gillot? Case 14-3: Nestle' S.A. In a country with high inflation:

You want to collect accounts receivable as soon as possible (because the money will be worth less later) and pay your accounts payable as late as possible (because the money will be worth less). You want to acquire inventory as soon as possible (because it will cost more later) and you want to avoid billing in advance of shipment (so you can charge the higher price). You also want to set your selling prices as late in the transaction as you can.

Clearly there are problems in Argentina with Nestle’ S.A. Assume that the situation presented in the case is happening today and that Nestle’ has successfully implemented the company-wide ERP described in the article “Nestle’s ERP Odyssey” ( http://www.cio.com/archive/051502/nestle.html ). Answer the following questions: What specific information would you use the ERP to collect to help the Centre control Nestle’ S.A., i.e., what information does the Centre need to manage Nestle’ S.A.? 1. How would you use this information to control Nestle’ S.A.?

2. Discuss whether or not you feel Gonzalez is doing a good job of managing? How would you recommend the Centre deal with him?

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