Operations Management-CASE STUDY

KAPPER INDUSTRIES CORPORATION is a Philippine based Fire and other industrial equipment
supplier. The company is a general merchandising firm of VALIANT Fire Extinguisher. One of its
suppliers is in India. The corporation is considering purchasing the supplier before its competitor
makes a bid for the company. The company sells around Php 25 million per year in fire
extinguishers and other industrial equipments to KAPPER, on which 5.5% duty is paid plus 12%
Sales tax (VAT). The annual purchase price is at Php 50 million. The supplier sells at a 50% mark-
up. India’s corporate income tax are at 30%. For liability purposes, KAPPER would like to keep the
supplier as a corporation. KAPPER is in the 2.41 million + 35% tax bracket for the Philippine
income tax purposes is concerned.

Condition:
1.) Make a SAVANT Framework
2.) Shall KAPPER INDUSTRIES CORPORATION acquire their supplier? Why or Why not?
3.) What are the implications of your actions if they acquire/not acquire the supplier?