Essay - Boise Cascade Corporation is Boise Cascade's Cdps a Profit Center?...

Boise Cascade Corporation

Is Boise ********** CDPS a profit center?

Boise Cascade's Corporate Data Processing Services (CDPS) is considered a profit *****. A profit center is a business unit that is treated as a distinct unit within *****n organization, where expenses and revenues are calculated separately in order for *****ability to be determined. CDPS was a division of the Corporate Information ***** department within Boise Cascade Corporation, and was responsible for running the mainframe computer and all data processing support within the company, with no external customers. CDPS had its own distinct operating ***** capital budgets, which were $8.3 million and $4.8 ***** respectively in 1991. CDPS also reported ***** own growth and profit independent of the greater organization. The department experienced an annual growth rate of 40% in use of machine resources, independent of growth of the greater Boise ***** Corporation.

Assume that ***** CDPS organizational entity will continue to provide basically the same services it has been providing. Evaluate the rest of Boise Cascade's system for controlling ***** processing ***** and costs. Comment specifically on ***** responsibility center structure;

***** division ********** Boise Cascade employed its own programmers and had its own capital budget ***** the purc*****e ***** computer hardw*****. Some divisions, such as the Office Products and Timber and Wood Products Divisions *****d only a limited amount of CDPS services, while other divisions, such ***** human resource or corporate finance had no capital ***** ***** heavily relied on CDPS for computer service. Usage of the mainframe ***** within ***** organization shifted dramatically from batch processing to on-line processing in 1991, which necessitated work to be primarily done during regular business hours. Users ***** billed monthly for the usage costs of each *****, plus a mark-up of 22%, which was designed to provide a pre-tax return on *****. The reasons why CDPS billed for the use of computer services included: ***** account ***** expenses involved in the provision of services; an *****centive for ********** to be more cognizant in regards to how efficiently and effectively they use their resources; to assist ***** in the management of ***** capacity; and to establish financial justification for capital expense requests.

In regards ***** responsibility structure as it relates to CDPS and its services, it is primarily ***** responsibility ***** individual div*****ion managers to establish and monitor the use of computer resources. In ***** ***** divisions to cut costs involved in ***** use of data processing services, division managers were required to efficiently structure their ***** systems so ***** all functions could ***** effectively executed ***** still remaining within budget. This could be done by shifting times of day that processing takes place, since CDPS ********** a 75% discount for CPU usage outside the 8:00am ***** 5:00pm workday.

Evaluations of ***** CDPS entity and it's managers

CDPS ***** a highly organized ***** of the Boise ***** Corporation, that identified a m*****rket on which ***** could capitalize, and effectively did so. Essentially, CDPS ***** established charges ***** every type of resource ***** *****y