Case Study on Aloha Products.

Aloha Products Evaluation of the current management control system Aloha Products maintains a centralized control system. This includes the purchase of raw materials, marketing and sales. This management control structure does not give the plant managers control on any of the major activities of a production facility. According the case information, the plant manager does not control the green beans purchase, production schedule or the production mix, nor do they have control over sales or …

…point. EVA approach allows assigning same profit objectives of each plant and also allows assigning different interest rates for coffee beans depending on the time of purchase. This approach also allows the plant managers to make plant investments without negatively affecting their performance. When plant managers are evaluated and compensated based on the EVA of the plant, they are motivated to increase the EVA of their plant, which in turn will benefit the whole company.