A XYZ company has been offered a contract to build and deliver nine extruding presses to the ABC bottling company. The c

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A Xyz Company Has Been Offered A Contract To Build And Deliver Nine Extruding Presses To The Abc Bottling Company The C 1 (31.28 KiB) Viewed 35 times

A XYZ company has been offered a contract to build and deliver nine extruding presses to the ABC bottling company. The contract price is contingent on meeting a specified delivery time, a bonus being given for early delivery. The marketing department has established the following cost and the time information: Normal Time (weeks) Crash Normal Crash Activity Most Time Optimistic Pessimistic Cost (²) Cost (3) Likely (weeks) 1-2 1 5 3 15,000 1 19,000 2-3 1 7 4 18,000 3 24,000 2-4 1 5 3 14,000 2 16,000 2-5 5 11 8 15,000 7 16,000 3-6 2 6 4 13,000 2 15,000 4-6 5 7 6 12,000 4 13,000 5-7 4 6 5 20,000 4 24,000 6-7 1 5 3 17,000 1 20,000 The normal delivery time is 16 weeks for a contract price of 1,24,000. Based on the probability for each of the following specified delivery time, recommend the delivery schedule that XYZ company should follow. Page 2 Contract delivery time Contract Amount (3) 15 1,42,500 14 1,45,000 13 1,50,000 12 1,52,500