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Company Background Birch Paper Company (Birch) is a five-division pulp and paper corporation that produces white and kraft paper as well as paperboard. Birch is comprised on four production divisions, including Northern, Southern and Thompson, as well as a pulp supplying timberland division. Each division is considered a profit center. The managers of each division control both the revenue and costs for their particular divisions and they are judged based on divisional profits and returns on investment. Strategically, Birch has been moving towards a more decentralized management scheme, so much of the decision-making authority has been pushed down the corporate hierarchy to lower level managers. The division managers in the company are free to purchase raw materials from whatever supplier they chose to do business with. Given the composition of the company the division managers were also free to purchase raw materials internally. The internal suppliers were expected to meet...

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