Mountain Lumber Company Case Solution

The company has to insure that the incentive plan has absorbed all the key success factors in it and it does not allow employees to indulge in behavior which would result in potential conflict of interest.

2. Solutions 

Firstly, the measurement plan should accurately determine the performance of the employees against the critical success factors. It is pertinent to mention that the quality of flooring is the utmost priority of the company as it is the sole differentiating point for the company. Hence, the quality must be ensured by each department regardless of the volumes produced. However, volumes must not be ignored at all, the achievable volumes at every stage without harming the quality of wood must be budgeted. 

Secondly, there are sufficient evidence to suggest that the Mountain Lumber‘s strategic focus on quality and to differentiate its product based on exceptional customer service and outstanding flooring solutions allow it to charge higher price as compared to the other flooring providers. Thus, the cost of raw material should not be an issue in this scenario. As the target customers are aware of the fact the prices Mountain Lumber Company charges are higher. Therefore, purchase of lower cost raw material as an indicator of the performance of the purchase department is not appropriate.