Fair market value for scrap

[mman1506]

We have a sponsor who donated us some 7075 from their scrap bin. The sheet we would like to use has a a market value of around 2000$ if you purchased it from a store but it was being scrapped at the value of aluminium chips (.75$/pound). What value do we use for the BOM?

[Richard Wallace]

The sponsor had a $2000 sheet of aircraft aluminum in their scrap bin?

Do they also blow stacks of dollar bills off their loading dock with a giant fan?

Seriously, when I have been an inspector in situations like this, I have always asked what price the donor would normally sell the item for. The blue box under <R12> in the 2014 FRC Manual uses that same description for fair market value.

Also, are you planning to use all of the sheet? If not, you might be allowed to account for a smaller quantity, if you can identify a source for the smaller quantity and its fair market value -- see another example further down in that same blue box.

[Cory]

Find the sheet on McMaster, in the smallest quantity that you can order it, yet still fit the size of your part into, and that's your BOM cost.

[FrankJ]

$2000 will by a lot of aluminum. Maybe it had certifications that drove the price up. In that case the scrap doesn't have the certs & is not worth as much. Try www.onlinemetals.com to get a price per square foot or per pound. You only need to cost what actually gets put on the robot not the whole quantity donated. The rest is stock.

[Bob Steele]

Originally Posted by FrankJ

$2000 will by a lot of aluminum. Maybe it had certifications that drove the price up. In that case the scrap doesn't have the certs & is not worth as much. Try www.onlinemetals.com to get a price per square foot or per pound. You only need to cost what actually gets put on the robot not the whole quantity donated. The rest is stock.

That's not exactly correct. In your Bill of Materials you need to include the cost of the metal you had to purchase in order to make the part. If it required a 4 foot X 2 foot piece of aluminum to cut out your part you must include the cost of the entire piece. You don't have to purchase it that way but you do have to find out what the smallest piece that you could purchase is that you could have cut your pieces out of and use that as a cost in the BOM. You can't just figure out the square feet of aluminum in your parts and multiply that by some square foot cost and put that in the BOM. The waste counts.

[geomapguy]

Originally Posted by Bob Steele

That's not exactly correct. In your Bill of Materials you need to include the cost of the metal you had to purchase in order to make the part. If it required a 4 foot X 2 foot piece of aluminum to cut out your part you must include the cost of the entire piece. You don't have to purchase it that way but you do have to find out what the smallest piece that you could purchase is that you could have cut your pieces out of and use that as a cost in the BOM. You can't just figure out the square feet of aluminum in your parts and multiply that by some square foot cost and put that in the BOM. The waste counts.

Yes this is correct

Example from manual

Example 6: A Team purchases a 4 by 4 ft sheet of aluminum, but only uses a piece 10 by 10 in. on their ROBOT. The Team identifies a source that sells aluminum sheet in 1 by 1 ft pieces. The Team may cost their part on the basis of a 1 by 1 ft piece, even though they cut the piece from a larger bulk purchase. They do not have to account for the entire 4 by 4 ft bulk purchase item.

[pfreivald]

But still, finding a general price from onlinemetals or metalsupermarket and prorating it is the right way to go--you don't have to account for an entire 4x8 sheet if you used a 1x1 square of it. Just prorate for the waste you make, too!

[MechEng83]

Originally Posted by pfreivald

But still, finding a general price from onlinemetals or metalsupermarket and prorating it is the right way to go--you don't have to account for an entire 4x8 sheet if you used a 1x1 square of it. Just prorate for the waste you make, too!

Our local metal vendors will sell cuts of extrusion and sheet at a pro-rated price, generally by the foot. For example, if I wanted a 1' piece off a 25' extrusion that costs $50, I'd pay 2 bucks and walk out of there.

[pfreivald]

Originally Posted by MechEng83

Our local metal vendors will sell cuts of extrusion and sheet at a pro-rated price, generally by the foot. For example, if I wanted a 1' piece off a 25' extrusion that costs $50, I'd pay 2 bucks and walk out of there.

We get our sheet aluminum for free from an awesome local sponsor (a small machine shop), so have the great burden of having to figure out what we'd have paid for it had we paid for it.

[FrankJ]

Teach me not to go by old rules. This one is kinda unworkable though. But in this case, since the shop would otherwise sale it for scrap by the pound, that is the fair market price.


Example of unexpected applications of this rule: So 3D printers that use expensive cartridges have to cost parts at the price of the cartridge since that is smallest unit price?

[Al Skierkiewicz]

Frank,
That opens a real issue, teams should cost as if they were purchasing the smallest quantity as shown in the copied rules. Your sponsor's scrap may be my sponsor's bread and butter.

[FrankJ]

I see your point Al. I have to admit that since our robot has never come close the budget limit, we have been conservative in costing stock, so I have not thought much about this rule. The trouble about pricing metal is that on an industrial scale the price depends on a lot of factors. So figuring out a true price for the minimum quantity allowed in the rules is always going to be a little arbitrary.

In our case we buy stock in bulk. Much gets used for stuff other than the comp bot. The price/lb is affected by the total buy, but I do have an idea of a minimum sell quantity of a particular shape so I guess that is what we will use.

[DELurker]

Originally Posted by mman1506

We have a sponsor who donated us some 7075 from their scrap bin. The sheet we would like to use has a a market value of around 2000$ if you purchased it from a store but it was being scrapped at the value of aluminium chips (.75$/pound). What value do we use for the BOM?

With everything being bandied about, what size is the piece and what size pieces are you planning to cut from it? That might help everybody move from abstracts to actual numbers. Of course, it'll also open up the "Why are you using a piece like that?" can, too.

[mman1506]

We are considering CNC milling wheels to save money if we have the time. The stock to make a wheel would be worth around 50-70$ per if you use McMaster pricing. We might also make some pocketed mechanism structure. They gave us a few 5/8" to 3" thick 44" *16" sheets.

The sponsor manufactures parts for defense contractors like Boeing and Lockheed. The customers have already been charged for the stock so the scraps are not worth much to them.

[Cory]

Originally Posted by mman1506

We are considering CNC milling wheels to save money if we have the time. The stock to make a wheel would be worth around 50-70$ per if you use McMaster pricing. We might also make some pocketed mechanism structure. They gave us a few 5/8" to 3" thick 44" *16" sheets.

The sponsor manufactures parts for defense contractors like Boeing and Lockheed. The customers have already been charged for the stock so the scraps are not worth much to them.

If you don't expect to come close to the budget limit, just use the McMaster pricing and have $300 in wheel material.

If you do think you'll come close, call up a local vendor and ask for the price of 2 or 3 feet of 7075 in whatever the smallest cross section is that will fit your wheel and account for it that way. Sometimes this might not be cheaper though, as many places will charge you for a full 12' bar if they have to cut 2 or 3 feet off it, as they can't sell it after that.