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Why Zappos management argue for discounted transfer price

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Reference no: EM132887065

Question - Amazon has some of the biggest data centers in the world, where it runs cloud-based hosting services. Amazon Web Services, Inc. (AWS), is the division of Amazon.com that provides compute, storage, and database services to a wide variety of companies, including GE, Netflix, Pfizer, Pinterest, and others.

Amazon's divisions also use its cloud-based hosting services. Amazon has several divisions; one of these divisions is Zappos, an online shoe and clothing shop. Assume Zappos uses AWS's cloud-based hosting services.

Other cloud-based hosting services exist, including Terremark, Savvis, and Dimension Data.

Required - Answer the following questions and post your response:

1) Why might Zappos' management argue for a discounted transfer price?

2) Why might the management of AWS argue for a transfer price at the market price?

Reference no: EM132887065

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