Polysar Ltd.

BACKGROUND Polysar Limited is Canadas largest chemical company. It is structured into 3 groups, namely, fundamental petrochemicals, rubber, and diversified products. Rubber Group is the largest of the three operating units of Polysar Limited. The primary winding users of its products, such(prenominal) as butyl and halobutyl, be manufacturers of automobile tires; other users are from various industries. In 1986, Rubber group contributed 0.8 billion which is 46 percent of the company annual sale. The operation of the group is change integrity into four divisions, NASA (North America and South America) and EROW (Europe and rest of the world), Research section and Global Marketing department. NASA and EROW operate as profit centers for individually one produce butyl and halobutyl dedicated to regional customers. Both of the centers have relatively flexible producing schedule to satisfy the increasing demand of halobutyl. by and by establishing the second plant in Sarnia, NASA is able to have each plant producing halobutyl and regular butyl. EROW, which has been running near capability since 1980, wholly focus on the production of halobutyl. Any idle capacity is utilized in manufacturing butyl. EROWs demand exceeds its manufacturing capacity, so EROW buys butyl from NASA. fiscal PERFORMANCE ANALYSIS In 1986, Rubber NASA enjoyed sales worth $65.

872 meg which exceeded the estimated sales by $4.822 gazillion. However, when it came to the net contribution, the division ended up with a loss of $876,000. This was $2.8 million less than the expected contribution. Comparatively, EROW did sanitary in all aspects with sales worth $89 million and a net profit worth $22.6 million. After that exam, management concluded that the large fixed cost thoughtless the sale figure, due to which the two divisions with same products have such a difference. First it is important to understand the standard be system implemented in Rubber group. Standard be assigns quantity and price standards to each component of variable and... If you privation to get a full essay, order it on our website: Orderessay

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