The internal price decided which subsidiary was profitable

# Self-authored for the EML case corpus (no external origin). A group has two
# subsidiaries: one makes a part, the other fits it and sells the product. Each
# keeps exact books, each reports its own profit, and each manager is paid on
# it. What the number that moves profit between them is, and who sets it, is
# computed below.
#
# The books are careful. The part's cost is real; the customer price is real;
# each subsidiary's ledger is exact; and the intent is exactly 'which
# subsidiary is making money'.
#
# The maker sells the part to the fitter at an internal price nobody outside
# the group ever pays, and moving that price moves profit from one ledger to
# the other while the group's total does not change by a unit.

60 => cost_to_make_the_part
10 => cost_to_fit_and_sell
100 => price_the_customer_pays
70 => internal_price_setting_one
90 => internal_price_setting_two

price_the_customer_pays - cost_to_make_the_part - cost_to_fit_and_sell => group_profit
internal_price_setting_one - cost_to_make_the_part => maker_profit_setting_one
price_the_customer_pays - internal_price_setting_one - cost_to_fit_and_sell => fitter_profit_setting_one
internal_price_setting_two - cost_to_make_the_part => maker_profit_setting_two
price_the_customer_pays - internal_price_setting_two - cost_to_fit_and_sell => fitter_profit_setting_two
maker_profit_setting_one + fitter_profit_setting_one => group_total_setting_one
maker_profit_setting_two + fitter_profit_setting_two => group_total_setting_two
maker_profit_setting_two - maker_profit_setting_one => profit_moved_by_the_internal_price

"cost to make the part           : " + str(cost_to_make_the_part) ^0
"cost to fit and sell            : " + str(cost_to_fit_and_sell) ^0
"price the customer pays         : " + str(price_the_customer_pays) ^0
"group profit, whatever the internal price : " + str(group_profit) ^0
"" ^0
"internal price " + str(internal_price_setting_one) + "               : maker " + str(maker_profit_setting_one) + ", fitter " + str(fitter_profit_setting_one) + ", group " + str(group_total_setting_one) ^0
"internal price " + str(internal_price_setting_two) + "               : maker " + str(maker_profit_setting_two) + ", fitter " + str(fitter_profit_setting_two) + ", group " + str(group_total_setting_two) ^0
"profit moved by the internal price : " + str(profit_moved_by_the_internal_price) ^0
"" ^0

# ---- what the books verified ----

"the two ledgers" ^0
"  part cost : real, " + str(cost_to_make_the_part) ^0
"  customer price : real, " + str(price_the_customer_pays) ^0
"  each ledger : exact" ^0
"  intent : which subsidiary is making money" ^0
"  entries misrecorded : 0" ^0
"  verdict : AT 90 THE MAKER EARNS 30 AND THE FITTER NOTHING" ^0
"" ^0
"  keeping each ledger exact is the part done right here," ^0
"  and it is why each subsidiary's figure is precisely what" ^0
"  its ledger says" ^0
"" ^0

# ---- what the internal price is ----

"a price nobody pays" ^0
"  who pays the internal price : the fitter, to the maker," ^0
"    both inside the group" ^0
"  what it changes for the group : nothing - " + str(group_total_setting_one) + " either way" ^0
"  what it changes for each ledger : everything - the maker" ^0
"    earns " + str(maker_profit_setting_one) + " or " + str(maker_profit_setting_two) + " on the same part" ^0
"  who sets it : head office" ^0
"  so 'which subsidiary is profitable' : is answered by a" ^0
"    setting, not by either subsidiary" ^0
"" ^0

# ---- what the managers got ----

"the bonuses" ^0
"  at " + str(internal_price_setting_two) + " : the maker's manager is a star, the fitter's is on" ^0
"    notice" ^0
"  at " + str(internal_price_setting_one) + " : the reverse" ^0
"  is either ledger wrong : no" ^0
"  does either ledger measure its manager : no; it measures" ^0
"    a number head office chose" ^0
"" ^0

# ---- null control ----

# The same group judging each subsidiary on what it controls - the maker on
# cost per part, the fitter on customer price and volume - or on the
# consolidated result.
20 => nc_swing_in_reported_profit_between_the_two_settings
0 => nc_swing_in_cost_per_part_between_the_two_settings
0 => nc_swing_in_group_profit_between_the_two_settings

"null control - judge on what each controls, or on the group" ^0
"  swing in a subsidiary's reported profit : " + str(nc_swing_in_reported_profit_between_the_two_settings) ^0
"  swing in the maker's cost per part : " + str(nc_swing_in_cost_per_part_between_the_two_settings) ^0
"  swing in group profit : " + str(nc_swing_in_group_profit_between_the_two_settings) ^0
"  no cost and no customer changed; the managers stopped" ^0
"  being measured on a dial in another building" ^0
"" ^0

# ---- the rule ----

"what an exact subsidiary ledger guarantees" ^0
"  the subsidiary's profit at the internal price is right :" ^0
"    exactly, real costs, exact books" ^0
"  the profit is the subsidiary's doing : not addressed; the" ^0
"    internal price moves " + str(profit_moved_by_the_internal_price) + " between the ledgers while the group" ^0
"    stays at " + str(group_profit) + ", so the split is a setting" ^0
"" ^0

"a price between two parts of one whole is a knob and not a market; each" ^0
"ledger is exact about a number the ledger did not earn, and the total that" ^0
"nobody can move is the only one that measures anything" ^0
"" ^0

"Both ledgers are exact and the group makes " + str(group_profit) + " whatever the internal price." ^0
"But that price moves " + str(profit_moved_by_the_internal_price) + " of profit from one subsidiary to the other - the" ^0
"maker shows " + str(maker_profit_setting_one) + " or " + str(maker_profit_setting_two) + " on the same part - so which subsidiary is profitable" ^0
"is a head-office setting, until each is judged on what it controls." ^0

cost_to_make_the_part = 60
cost_to_fit_and_sell = 10
price_the_customer_pays = 100
internal_price_setting_one = 70
internal_price_setting_two = 90
group_profit = price_the_customer_pays - cost_to_make_the_part - cost_to_fit_and_sell
maker_profit_setting_one = internal_price_setting_one - cost_to_make_the_part
fitter_profit_setting_one = price_the_customer_pays - internal_price_setting_one - cost_to_fit_and_sell
maker_profit_setting_two = internal_price_setting_two - cost_to_make_the_part
fitter_profit_setting_two = price_the_customer_pays - internal_price_setting_two - cost_to_fit_and_sell
group_total_setting_one = maker_profit_setting_one + fitter_profit_setting_one
group_total_setting_two = maker_profit_setting_two + fitter_profit_setting_two
profit_moved_by_the_internal_price = maker_profit_setting_two - maker_profit_setting_one
print("cost to make the part           : " + str(cost_to_make_the_part))
print("cost to fit and sell            : " + str(cost_to_fit_and_sell))
print("price the customer pays         : " + str(price_the_customer_pays))
print("group profit, whatever the internal price : " + str(group_profit))
print("")
print("internal price " + str(internal_price_setting_one) + "               : maker " + str(maker_profit_setting_one) + ", fitter " + str(fitter_profit_setting_one) + ", group " + str(group_total_setting_one))
print("internal price " + str(internal_price_setting_two) + "               : maker " + str(maker_profit_setting_two) + ", fitter " + str(fitter_profit_setting_two) + ", group " + str(group_total_setting_two))
print("profit moved by the internal price : " + str(profit_moved_by_the_internal_price))
print("")
print("the two ledgers")
print("  part cost : real, " + str(cost_to_make_the_part))
print("  customer price : real, " + str(price_the_customer_pays))
print("  each ledger : exact")
print("  intent : which subsidiary is making money")
print("  entries misrecorded : 0")
print("  verdict : AT 90 THE MAKER EARNS 30 AND THE FITTER NOTHING")
print("")
print("  keeping each ledger exact is the part done right here,")
print("  and it is why each subsidiary's figure is precisely what")
print("  its ledger says")
print("")
print("a price nobody pays")
print("  who pays the internal price : the fitter, to the maker,")
print("    both inside the group")
print("  what it changes for the group : nothing - " + str(group_total_setting_one) + " either way")
print("  what it changes for each ledger : everything - the maker")
print("    earns " + str(maker_profit_setting_one) + " or " + str(maker_profit_setting_two) + " on the same part")
print("  who sets it : head office")
print("  so 'which subsidiary is profitable' : is answered by a")
print("    setting, not by either subsidiary")
print("")
print("the bonuses")
print("  at " + str(internal_price_setting_two) + " : the maker's manager is a star, the fitter's is on")
print("    notice")
print("  at " + str(internal_price_setting_one) + " : the reverse")
print("  is either ledger wrong : no")
print("  does either ledger measure its manager : no; it measures")
print("    a number head office chose")
print("")
nc_swing_in_reported_profit_between_the_two_settings = 20
nc_swing_in_cost_per_part_between_the_two_settings = 0
nc_swing_in_group_profit_between_the_two_settings = 0
print("null control - judge on what each controls, or on the group")
print("  swing in a subsidiary's reported profit : " + str(nc_swing_in_reported_profit_between_the_two_settings))
print("  swing in the maker's cost per part : " + str(nc_swing_in_cost_per_part_between_the_two_settings))
print("  swing in group profit : " + str(nc_swing_in_group_profit_between_the_two_settings))
print("  no cost and no customer changed; the managers stopped")
print("  being measured on a dial in another building")
print("")
print("what an exact subsidiary ledger guarantees")
print("  the subsidiary's profit at the internal price is right :")
print("    exactly, real costs, exact books")
print("  the profit is the subsidiary's doing : not addressed; the")
print("    internal price moves " + str(profit_moved_by_the_internal_price) + " between the ledgers while the group")
print("    stays at " + str(group_profit) + ", so the split is a setting")
print("")
print("a price between two parts of one whole is a knob and not a market; each")
print("ledger is exact about a number the ledger did not earn, and the total that")
print("nobody can move is the only one that measures anything")
print("")
print("Both ledgers are exact and the group makes " + str(group_profit) + " whatever the internal price.")
print("But that price moves " + str(profit_moved_by_the_internal_price) + " of profit from one subsidiary to the other - the")
print("maker shows " + str(maker_profit_setting_one) + " or " + str(maker_profit_setting_two) + " on the same part - so which subsidiary is profitable")
print("is a head-office setting, until each is judged on what it controls.")

cost to make the part           : 60
cost to fit and sell            : 10
price the customer pays         : 100
group profit, whatever the internal price : 30

internal price 70               : maker 10, fitter 20, group 30
internal price 90               : maker 30, fitter 0, group 30
profit moved by the internal price : 20

the two ledgers
  part cost : real, 60
  customer price : real, 100
  each ledger : exact
  intent : which subsidiary is making money
  entries misrecorded : 0
  verdict : AT 90 THE MAKER EARNS 30 AND THE FITTER NOTHING

  keeping each ledger exact is the part done right here,
  and it is why each subsidiary's figure is precisely what
  its ledger says

a price nobody pays
  who pays the internal price : the fitter, to the maker,
    both inside the group
  what it changes for the group : nothing - 30 either way
  what it changes for each ledger : everything - the maker
    earns 10 or 30 on the same part
  who sets it : head office
  so 'which subsidiary is profitable' : is answered by a
    setting, not by either subsidiary

the bonuses
  at 90 : the maker's manager is a star, the fitter's is on
    notice
  at 70 : the reverse
  is either ledger wrong : no
  does either ledger measure its manager : no; it measures
    a number head office chose

null control - judge on what each controls, or on the group
  swing in a subsidiary's reported profit : 20
  swing in the maker's cost per part : 0
  swing in group profit : 0
  no cost and no customer changed; the managers stopped
  being measured on a dial in another building

what an exact subsidiary ledger guarantees
  the subsidiary's profit at the internal price is right :
    exactly, real costs, exact books
  the profit is the subsidiary's doing : not addressed; the
    internal price moves 20 between the ledgers while the group
    stays at 30, so the split is a setting

a price between two parts of one whole is a knob and not a market; each
ledger is exact about a number the ledger did not earn, and the total that
nobody can move is the only one that measures anything

Both ledgers are exact and the group makes 30 whatever the internal price.
But that price moves 20 of profit from one subsidiary to the other - the
maker shows 10 or 30 on the same part - so which subsidiary is profitable
is a head-office setting, until each is judged on what it controls.

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