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V.G. Narayanan;Lisa Brem
Health care services
A forward-thinking manager at Owens & Minor (O&M), a large national medical and surgical distribution company, enlisted the help of both logistics and cost managers to develop an innovative pricing schedule based on the customer's activities instead of the price of the product since the existing cost-plus pricing structure made it impossible for O&M to price services appropriately. The case also explores the customer resistance to his new proposal.
Accounting;Activity-based costing;Distribution;Materials management;Performance measurement;Pricing;Supply chain management