Buy Local or Pay Less: The Choice Facing Aid Associations in Haiti

19 Pages Posted: 19 Aug 2014

See all articles by Kip R. Krumwiede

Kip R. Krumwiede

Krumwiede Research & Consulting LLC

Daniel Gyung H. Paik

University of Richmond - Accounting

W. Darrell Walden

University of Richmond - Accounting

Date Written: August 18, 2014

Abstract

The purpose of this case is to enhance students’ understanding of various managerial accounting concepts, tools, and techniques as well as enhance their ethical reasoning skills. It introduces students to an important “world issue” involving how best to provide aid to countries devastated by disaster, war, corruption, and poverty. The primary issue in the case is how aid associations can best provide aid for tens of thousands of malnourished children in Haiti and help the country rebuild after years of poverty and a horrific earthquake in 2010. A peanut-based food product has been developed that has been very successful in saving these children. However, humanitarian groups must decide whether to buy more expensive peanuts from local farmers or purchase higher-quality peanuts from foreign suppliers at a lower price.

In addition to ethical issues, the case provides students an opportunity to apply cost and managerial accounting knowledge and tools to a real-world economic issue. Cost-volume-profit questions involve a Haitian farmer and give students a view of the situation that the Haitian farmers and citizens face. Product costing questions involve the cost of making Medika Mumba and how the source of the peanuts affects the cost of the product. After students see the situation from those two perspectives, they are faced with ethical questions from the point of view of a large humanitarian group relating to what is the best (most ethical) way to help the Haitian people.

Keywords: Instructional case, cost accounting, managerial accounting, and ethical decision making

Suggested Citation

Krumwiede, Kip R. and Paik, Daniel Gyung H. and Walden, W. Darrell, Buy Local or Pay Less: The Choice Facing Aid Associations in Haiti (August 18, 2014). AAA 2015 Management Accounting Section (MAS) Meeting, Available at SSRN: https://ssrn.com/abstract=2482598 or http://dx.doi.org/10.2139/ssrn.2482598

Kip R. Krumwiede (Contact Author)

Krumwiede Research & Consulting LLC ( email )

118043167149 (Phone)

Daniel Gyung H. Paik

University of Richmond - Accounting ( email )

United States

W. Darrell Walden

University of Richmond - Accounting ( email )

United States

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