PA $ 46 25% 03:36 minimum position. The 5 percent change in learning curve efficiency amounts to approximately $ 1 million. We should be well covered. "The first move will be up to them. I expect that they'll come in with an offer of $ 18 to $19 million. Using the binary chop procedure, that'll give us our guaranteed minimum position. Gus Bell: "Do you know the guys who you'll be negotiating with?" Jeff: "Yes, I've dealt with them before. The last time, the negotiations took three days. I think we both got what we wanted. I expect this one to go just smoothly Gus Bell: "Okay, Jeff. I'm convinced we're prepared for negotiations. Have a good trip" The negotiations began at 9:00 A .M on Monday morning. The customer countered the original proposal of $22.2 million with an offer of $15 million. After six solid hours of arguments, Jeff and his team adjourned. Jeff immediately called Gus Bell at Cory Electric. Jeff: "Their counteroffer to our bid is absurd. They've asked us to make a counteroffer to their offer. We can't do that. The instant we give them a counter-offer, we are in fact giving credibility to their absurd bid. Now, they're claiming that, if we don't give them a counteroffer, then we're not bargaining in good faith. I think we're in trouble" Gus Bell: "Has the customer done their homework to justify their bid?" Jeff: "Yes, very well". Tomorrow we're going to discuss every element of the proposal, task by task. Unless something drastically changes in their position within the next day or two, contract negotiations will probably take up to a month Gus Bell: "Perhaps this is one program that should be negotiated at the top levels of management. Find out if the person that you're negotiating with reports to a vice president and general manager, as you do. If not, break off contract negotiations until the customer gives us someone at your level. We'll negotiate this at my level, if necessary." Source: John Wiley & Sons Inc. Answer ALL the questions in this section. Question 1 (20 Marks) "I'd like to negotiate the bottom line only, but that's a dream. We'll probably negotiate the raw materials, the man-hours and the learning curve, the overhead rate, and finally the profit percentage. Hopefully, we can do it in that order." In light of the above statement and considering variability (uncertainty) on man-hours, discuss an appropriate time estimating approach using an example. Question 2 (60 Marks) For the above case study, create a PERT schedule with the key activities for the $20 million contract negotiation project. There should be between SIX (6) to TEN (10) activities identified from the case study. Additional relevant activities may be included. Create an AON network diagram and find the critical path using slack once estimated activity time is established. Question 3 (20 Marks) Analyse the various types of Gantt charts Gus Bell and Jeff can use to schedule preparations for the above negotiation. Present an example of each type of Gantts Chart from the schedule created in Question 2