Singapore Metals Limited Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Singapore Metals Limited Case Solution

What is the economic value to the customer of the curled metal pads?

Market Capacity

Total demand = 290 - 390 m base of piles to be operated
One set of wrap metal pads 10000 f
One set of wrap metal pads = 4 originally installed, plus two added)
Market condition = 29,000 - 39,000 sets of wrap metal pads e. 174,000 - 234,000 wrap metal pads
Economic value = $121.7m - $163.7m at $700 per pad

What should be the price charged for the curled metal pads

Seeing by the estimated cost data provided by the production manufacturer assuming that the planned cost would be 360% of the cost of the wrought iron workers as in any other product made by SML the prices would be as follows.

Estimates per Pad With Existing Equipment
SML Pad Size	30 cm	35 cm	44 cm	51 cm	58 cm	75 cm
V.C
Material	46.92	61.71	95.43	121.71	159.48	287.07
Labor	86.4	99.21	150.06	171.21	207.48	355.08
T.V.C	133.32	160.92	245.49	292.92	366.96	642.15
Fixed FOH
Dl - 360%	311.04	357.156	540.216	616.356	746.928	1278.288
TMC	444.36	518.076	785.706	909.276	1113.888	1920.438
CM - 50%	222.18	259.038	392.853	454.638	556.944	960.219
Selling Price	666.54	777.114	1178.559	1363.914	1670.832	2880.657

And based on the calculation it’s material cost is $46.92 for 30 cm SML Pad Size. Total V.C is 133.2. The total Manufacturing cost is 444.36 and by adding Contribution Margin of 50%, thus the selling price is 666.54. And same calculation for other sizes as well.

Estimates with purchase of $150,000 of Permanent Tooling
SML Pad Size	30 cm	35 cm	44 cm	51 cm	58 cm	75 cm
V.C
Material	46.92	61.71	95.43	121.71	159.48	287.07
Labor	34.92	45.75	65.55	80.85	91.71	168.27
T.V.C	81.84	107.46	160.98	202.56	251.19	455.34
Fixed FOH
Dl - 360%	125.712	164.7	235.98	291.06	330.156	605.772
TMC	207.552	272.16	396.96	493.62	581.346	1061.112
CM - 50%	103.776	136.08	198.48	246.81	290.673	530.556
Selling Price	311.328	408.24	595.44	740.43	872.019	1591.668

Tan had the option to buy extra permanent equipment, which would decrease the labor costs of the item which would have a major impact on the supply of F.C as well and would decrease the total cost of the product by half.

In this scenario of purchasing the 150000 of Permanent Tooling that means less labor will be used for manufacturing, as in 30 cm the variable cost will be same 46.92, but the labor cost will be reduced. That is why the total variable cost is 81.84. the total Manufacturing cost is also decreased as well by that and the overall selling price is 311 for the 30 cm pad size after the purchase.......................

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Singapore Metals Limited Harvard Case Solution & Analysis