Dakota Office Products Case Essay

1252 Words Dec 2nd, 2011 6 Pages
Dakota Office Products
(A)
Dakota Office Products Company priced its products to the customers by marking up the purchased product cost by about 15% to cover the cost of warehousing, distribution, and freight, and adding another markup to cover the approximate cost for general and selling expenses, and profit. This pricing system was inadequate for its current operating environment since each customer required different product ordering and distributing ways which cost differently. Moreover, according to the case scenario, we know that those costs that were considered in product pricing strategy were not accurately assigned to each order and needed to be finely reallocated. So, in order to set up a better pricing system for the company
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When carefully looking at each cost assigned to the customers, it varies significantly between Customer A and B due to their different product ordering and delivery service they had. Though these two customers

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