=+Pillercat Ltd is a highly decentralised company. Each division manager has full authority for sourcing decisions and selling decisions. The Machining Division of Pillercat Ltd has been the major supplier of the 2000 crankshafts that the Tractor Division needs each year.

The Tractor Division, however, has just announced that it plans to purchase all its crankshafts in the forthcoming year from two external suppliers at $200 per crankshaft. The Machining Division of Pillercat Ltd recently decided to increase its selling price for the forthcoming year to $220 per unit

(from $200 per unit in the current year).