Chemical Bank Allocation of Profits Case Solution

Case Solution

Describes a conflict among your metropolitan (branch banking) and treasury groups within the bank. The issue is which group is deserving of the profits created having a product including both: Due bills. It's a kind of transfer prices problem, in a unique (i.e., service) setting.

Excel Calculations

Existing Profit and Loss sharing for Due Bill (Considering only the Revenue Income)                                         

Revised or Proposed Profit and Loss sharing for Due Bill (Considering only the Revenue Income) 

Questions Covered

1.       Show how to calculate split up profits and reasons behind it. Also, refer to organization architecture (Decision right, Reward system, Evaluation system)

2.       Appendix