=+Northern, it probably would buy its linerboard and corrugating medium from the Southern division of Birch. The walls of a corrugated box consist of outside and inside sheets of linerboard sandwiching the fluted corrugating medium. About 70% ofThompson's out-of-pocket cost of $400 for the order represented the cost of linerboard and corrugating medium. Though Southern had been running below capacity and had excess inventory, it quoted the market price, which had not noticeably weakened as a result of the over-supply. Its out-of-pocket costs on both liner and corrugating medium were about 60% of the selling price.

The Northern division received bids on the boxes of $480 a thousand from the Thompson division, $430 a thousand from West Paper Company and $432 a thousand from Eire Papers Ltd. Eire Papers offered to buy from Birch the outside linerboard with the special printing already on it, but would supply its own inside liner and corrugating medium. The outside liner would besupplied by the Southern division at a price equivalent of $90 a thousand boxes, and it would be printed for $30 a thousand by the Thompson division. üf the $30, about $25 would be out-of-pocket costs.