Total Forms Control

What managerial advice do you have for Allied about the Total Forms Control (TFC) business? How does Exhibit 1 relate to this question?

Allied has several beneficial aspects in their operations in conducting their business such as having a greater proportion of distribution centers and services provided. However they lack in the way they service to their clients. Therefore improvements must be made in order to operate fairly to all clients in their business. As a manager, it is his/her duty to oversee and advice on any changes that must be made to enhance the business and bring it to a positive view.

Managerial Advice:

• Adjustment of the management area to level of service. The reason for this is because although customer account A and B both make annual sales of $79,320 with cost of product being $50,000, the current system charged equal service fee. Although these accounts were same only in the products being sold, they were different in the level of service required by Allied.

• A review on the true and fair to the clients. That is all similar size clients need fair treatment.

• Service and treatment must be equal to all clients; whether small or large

• Fees must be charged for usage of distribution centre at level of services provided to clients.

In exhibit 1, it portrays a value chain concept of TFC, Allied operates its forms manufacturing and TFC activities as a separate profit centre. The transfer price of product to TFC was at arm’s length with the transfer price set at fair market value. Allied manufactures business forms in 13 locations. Although the TFC sales people had the option to outsource products if necessary, internal sourcing was more encouraged for customer orders. Clients