Question: Sox Engineering designs and constructs air conditioning and heating (HVAC) systems for hospitals and clinics, Currently the company's staff is overioaded with design work. There
Sox Engineering designs and constructs air conditioning and heating (HVAC) systems for hospitals and clinics, Currently the company's staff is overioaded with design work. There is a major design project due in 8 weeks. The penalty for completing the design late is $14,000 per week, since ary delay will cause the facily to open later than anticipated, and cost the client significant revenue. If the company uses is inside engineers to complete the design, it will have to pay them overtme for all work. Sox has estimated that it will cost $10,000 per week (wages and overhead), including late weeks, to have company engineers complete the design. Sax is also considering having an outside engineering firm do the design. A bid of $85,000 has been recelved for the completed design. Yot another option for completing the design is to conduct a joint design by having a third engineering company complete all electromechanical components of the design at a cost of 556,000 . Sox would then complete the rest of the design and control systems at an estimated cost of $32,000. Sox has estimated the following probabilities of completing the project within various time frames whan using each of the three options. Those estimates are shown in the following table: The expected monetary value using inside engineers to complete the design is 1 (Enter your response as an integer) The expected monetary value using an outside engineering firm to complete the design is 5 (Enter your rosponse as an integor.) The expected monetary value of conducting a joint design is $ (Enter your response as an integer.) What is the best decision based on an expected monetary value criterion? Intemal engineers Extemal engineering firm Joint design
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