Question: A contractual term update has been made by the client because of the changing market condition. Specifically, the following information is added, If the project

A contractual term update has been made by the client because of the changing market condition. Specifically, the following information is added, If the project team can complete the project in 30 days, there will be a one-time $50,000 cash reward. The project manager reviewed several options. The following cost table was identified.

Activity

Current

Duration

Shortest Possible

Duration

Number of Days can be Shortened

Cost to Shortened the

Activity by 1 Day

A

7

5

7- 5 = 2

$ 14,000

B

13

10

13 10 = 3

$ 8,000

C

16

12

16 12 = 4

$ 9,000

D

10

8

10 8 = 2

$ 10,000

E

8

6

8 6 = 2

$ 18,000

F

7

4

7 4 =3

$ 12,000

G

5

3

5 3 = 2

$ 5,000

Is the contractual change worthy of pursuing? (Worthy of pursuing is defined as generating a positive cashflow that is as little as $0.01.) Please evaluate the decision. If it is worthy of pursuing, please find out how much net cash inflow does it incur?

Hint: Please think about the idea of critical path and what it means for the project duration. This problem will take several steps in order to be fully solved.

Please type answer, not write it out. Thanks!

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