internal customer

internal customer

a division or department of a vertically integrated firm (see VERTICAL INTEGRATION) which acts as a BUYER for raw materials, components or services supplied by other divisions or departments of the firm. The TRANSFER PRICE at which materials, components or services are ‘bought’ from internal suppliers by internal customers needs to be considered by managers; and the QUALITY standards of these items needsto be agreed. See TOTAL QUALITY MANAGEMENT.
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