1. Does Colorscope make cost-quality tradeoffs with regard to some of its customers? Please explain.
2. How should Colorscope change its incentive system?
3. Even though the Colorscope case dealt primarily with the implications of a two stage cost system, did Colorscope have unused capacity costs? If so, what caused them to have unused capacity, and should these costs be allocated to jobs/customer orders? Why or why not?
Harvard Business School Case #910-410 197040
Case Software #XLS-812
Copyright © 2010 President and Fellows of Harvard College. No part of this product may be reproduced, stored in a retrieval system or transmitted in any form or by any means—electronic, mechanical, photocopying, recording or otherwise—without the permission of Harvard Business School.