The 1993 Budget Report for Waikerie Co-Operative Producers Ltd., an Australian citrus co-operative, listed "the four singularly most important factors in the operation of the co-operative":
1. Are we making a profit and close to budget on our cash flow?
2. Are we paying a competitive price for all produce supplied?
3. Is our volume of handling near or better than our estimate?
4. Are our sales targets being achieved?
The budget for fiscal year 1993 was calculated "with these factors uppermost in all considerations," but Duncan Beaton, general manager of the co-operative had concerns in each of these areas. The co-operative had had a negative operating surplus in each of the last two fiscal years and its managers were forecasting another, in large part because it was operating at less than 50 percent of its capacity. Some grower-members were complaining that the co-operative was not paying a competitive price for produce (although Duncan was not convinced that their criticisms were valid). And Waikerie managers found it difficult to prepare even reasonably accurate sales and budget targets both because of volatility in the produce markets and less than complete cooperation from the grower-members.

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EXHIBIT 1 Waikerie Co-Operative Producers Limited Organization Structure Bourd of diresctor eneral g D. Beaton office Mu masip D Douglas nanags C Carthew Rajare MG RMarlhan Paynaster af Rohde Bak s M.Hudion Kal officersR. DufieldP Ha R. Leston S Cain Depst Plan egneeig iductionDreied fruit Transport statt