Super Appliance Manufacturers Ltd has a wide range of manufacturing activities. The company operates on a divisionalised basis with each division being responsible for its own manufacturing, sales and marketing, and working capital management. Divisional chief executives are expected to achieve a target of 20% return on sales. A disagreement has arisen between two divisions which operate on adjacent sites. The Boiler division has the opportunity to manufacture a geyser using a new heater element developed by the Electric division. Currently there is no other source of supply for an equivalent heater in the required quantity of 45 000 units a year, although a foreign manufacturer has offered to supply up to 15 000 units in the coming year at a price of N$13.50 each. Electric's current