1. The cost per square foot for the units is given in the text together with its standard deviation. What other areas of cost or revenue are likely to have cost uncertainty? How should these uncertainties be handled?

2. How would you suggest the team handle the issue of Dr. Link’s supposedly inflated medical equipment costs?

MINI CASE 

Fred Splient gave his ALF Project Steering Committee two months to develop an action plan for their area of responsibility in the project. Each member was told to include the tasks, predecessors and successors, resources needed, responsible person, and an estimated cost. He asked that these be presented to the steering team on August 31. All through July the ALF project team scrambled to identify the steps required to open the facility and to determine what it would cost. Each team member met with his or her departmental staff to get help in identifying what was needed. For example, the COO spoke with the Dietary Department head and asked that she develop a plan to meet all requirements to set up the facility to feed the residents. The COO then asked the Facilities Manager to develop an action plan to prepare the building and maintain it. The COO also met with the Rehab Services Medical Director and his clinical staff to identify the residents’ probable medical needs based on the projected population, and to develop an action plan to prepare to meet the residents ’ health needs. The COO asked the therapy manager to prepare a plan to develop social activities for the residents.