The Squeaky Lawn Harvard Case Solution & Analysis

The Squeaky Lawn Case Study Solution

Impact of Different Compensation Arrangements on Profits

If Squeaky horn maintains the billing price of minor repair of band and orchestral instruments to $35 and $32.5 instead of reducing it to $30 and $28, the revenue from Band and orchestral instruments would increase by 22% and 29% respectively, leading to a rise in profits. However lowering down of the prices has proven to be beneficial for Squeaky Horns, as ithas resulted in 35 additional jobs previously.

Similarly if the cost of replacement parts is not increased to $60 as compared to the planned cost the profits would increase by 10%. Maintaining the shipping cost at$30 per package, instead of $35 would be advantageous for Squeaky horns as it would increase the band’s profits by 14%.

If Squeaky horns sticks to the same time of 2 hours per job required to complete minor repair of band instruments instead of increasing it to 3 hours per job; the band repairers’ wages would reduce by 33%, increasing the overall profits of Squeaky Horn.

It is also observed that number of jobs for minor repair of band instruments reduced to from 1830 to 1740 budgeted jobs as Squeaky Horns doubled the time to complete minor repairs. This led to customer dissatisfaction, and hence lowered therecruitment by the company.

Recommendations

Since price reduction lead to 35 additional jobs, there is a high probability that jobs would increase further in future, therefore Squeaky horns should keep the billing rates for minor repair of bands and orchestral instruments to $30 and $28.

The time duration required to complete minor repair of bands should be reduced to 2 hours per job in order to ensure the maximum customer satisfaction and higher number of jobs in future.

To control the shipping costs, Squeaky horns should negotiate with multiple carriers and switch from box packaging to poly mailers as they take less space and are cost effective.The shipping cost can also be reduced by negotiating the bulk shipping discounts with the shipping companies, which might lead to lower billing rates.

Appendices

Appendix-1: Factors for Differences

Appendix-2: Revised Budget

Appendix-3: Profit Reconciliation Statement

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