Question: De Leon Engineering designs and constructs ar conditioning and hoating (PNAC) systems for hospitals and cinica. Currently the company/s stant is overloaded with design work.
De Leon Engineering designs and constructs ar conditioning and hoating (PNAC) systems for hospitals and cinica. Currently the company/s stant is overloaded with design work. There is a major design project duo in 8 weeks. The penalty for complesing the design late is $13,000 per week, since any delay well cause the faclity to cpen later than anticlpated, and cost the client significant revenve. If the company uses is inside engineers to complete the design, it wa have to pay them overtime for all work. Owner Roberta De Leon has estimated that i will cost $10,000 per week (wages and ovethead), including late weeks, to have company engineers complato the design. Foberta is also considering having an outside engineering firm do the design. A bid of $95, 000 has been received for the completed design. Yet another opton for completing the design is to conduct a joint design by having a third engineering conpany corriplete all electromschanical component of the design at a cost of \$56,000. De Leon Engineering would then complete the rest of the design and control systems at an estmated cost of $32,000. Roberta has estimated the following probabilites of completing the project within various time trames when using each of the the options. Those estimates are shown in the following table: The expected monetary value using inside engneers to complete the design is $ (Entar your response as an integer) The expected monetary value using an outuite engineering 5m to complete the design is $ (Enter your response as an integer) The expected monetary value of conducting a joint desion is 1 (Enter your mesponse as an integec) What is the best decision based on an expected monetary value criterion? Joint design Internas engineers
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
