StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Project Management exercise question - Essay Example

Cite this document
Summary
Q17-3) Your company has asked you to determine the financial risks of manufacturing 6,000 units of a product rather than purchasing them from a vendor at $66.50 per unit. The production line will handle exactly 6,000 units and requires a one-time setup cost of $50,000. The…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER93.2% of users find it useful
Project Management exercise question
Read Text Preview

Extract of sample "Project Management exercise question"

Project management exercise questions Lecturer: Q17-3) Your company has asked you to determine the financial risks of manufacturing 6,000 units of a product rather than purchasing them from a vendor at $66.50 per unit. The production line will handle exactly 6,000 units and requires a one-time setup cost of $50,000. The production cost is $60/unit. Your manufacturing personnel inform you that some of the units may be defective, as shown below:% defective     0       1       2       3       4probability of occurrence (%)   40      30      20      6       4Defective items must be removed and replaced at the cost of $145/defective unit.

However, 100 percent of units purchased from vendors are defect-free. Construct a payoff table, and using the expected-value model, determine the financial risk and whether the make or buy option is best.Units purchased=6000 Cost per unit=$66.50Set up cost=$500006000*66.50+6000*60+50000=809000Nature Action 01234 Probability Production 410000418700427400436100444800 (0.4)164000410001640328001744401779200.31674801674801674.803349687220889600.21709601709601709.603419226166266880.0617440017440017443488017444177920.

041779201779201779.2035584Total s6978006978008547.60170952=6000*60=360000 =6000*60=360000 =6000*60=360000 =6000*60=360000 =6000*60=360000Total Cost =410000 418700 427400 436100 444800Expected Cost of manufacturing =410000*0.4+418700*0.3+427400*0.2 +436100*0.06 +444800*0.04=419048Expected cost of manufacturing = 41*0.4+418700*0.3+427400*0.2=419048The total cost of manufacturing is $419048, but if the firm buys from a vendor, the total cost would be $809000. The firm should therefore manufacture instead of purchasing the product from vendors.

In manufacturing, the firm will be able to save $389952. BibliographyKerzner, H. (2009). Project management: A system Aproach to planning, Scheduling, and Controlling . John Wiley $ Sons .

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Project Management exercise question Essay Example | Topics and Well Written Essays - 250 words”, n.d.)
Project Management exercise question Essay Example | Topics and Well Written Essays - 250 words. Retrieved from https://studentshare.org/information-technology/1590230-project-management-exercise-question
(Project Management Exercise Question Essay Example | Topics and Well Written Essays - 250 Words)
Project Management Exercise Question Essay Example | Topics and Well Written Essays - 250 Words. https://studentshare.org/information-technology/1590230-project-management-exercise-question.
“Project Management Exercise Question Essay Example | Topics and Well Written Essays - 250 Words”, n.d. https://studentshare.org/information-technology/1590230-project-management-exercise-question.
  • Cited: 0 times

CHECK THESE SAMPLES OF Project Management exercise question

Planning and Control Issues in Project Management

– Estimating with PERT Beta Distribution question # 1 Data: The equipment of the company installs in the following time durations: The best case = 12 hours, The worst case = 18 hours, The most typical case = 14 hours Part A: Expected Time = (The best case + 4 * (The most typical case) + the worst case) / 6; Expected Time = (12 + 4 * (14) + 18) / 6; Expected Time = 14.... 3 hours Part B: Standard Deviation = (the worst case – the best case) / 6; Standard Deviation = (18 – 12) / 6; Standard Deviation = 1; Part C: The part A of the question presents that the expected time of installing the equipment in the company is 14....
17 Pages (4250 words) Coursework

Project Management - Cathway Pacific

The paper analyzes Cathway Pacific and the project management.... hellip; This paper focuses on project management.... The paper "project management - Cathway Pacific" investigates project management in the context of Cathway Pacific.... This juncture warrants Cathway management's attention to roll out a project aimed towards addressing the matter conclusively.... The criteria to be used must meet the desired purpose of the project....
9 Pages (2250 words) Assignment

Marketing Strategy Group Project

hellip; As a result, Dunkin donuts conduct a survey exercise aiming at collecting information concerning the perception of the segment's consumers on the company's products (Nigel, 2007).... (Constant Sum Scale) b) Administering Questionnaires In every research process, the success of a research exercises depends on the method used to administer data collection exercise.... In a survey exercise, a researcher should choose an appropriate venue and context for administering questionnaires....
3 Pages (750 words) Assignment

Effecitve Risk Management in Softwatre Development Utilizing Different Methodologies

Risks exist throughout the lifecycle, as it can be seen, some risks on budgeting, scheduling or others might be the reason for failure in project management.... It is easily assumed that ineffective risk management, or even lack of risk identification, risk analysis and risk mitigation in project life-cycle are the rational reason for being failure ((Baccarini; Salm and Love, 2004).... Thus, an efficient risk management process for the project becomes more and more essential....
5 Pages (1250 words) Dissertation

Financial Analysis Questions and Exercises

Chapter 18: Discussion question 3Present value of money is important in Capital budgeting decisions because these are usually longer term decisions and cash inflows and outflows occur at different points in time.... Practice exercise 15-8 Fixed Costs and Variable Costs Correct answer: 3.... Wood used to make custom tablesPractice exercise 15-13 Direct and Indirect Costs Best answer: 1.... To evaluate business segments on the basis of only those costs directly traceable to each segmentPractice exercise 15-15 Out-of-Pocket Costs and Opportunity Costs Correct Answer: 1....
2 Pages (500 words) Essay

Ethics Modules Evaluation

Comment: A cognitive scientist studying the effect of mood states on problem solving behaviors has research question and is interacting with living individuals.... Finally, in the class exercise described, the intention is pedagogical � to learn how to conduct and interview, rather than to answer a research question.... The study is designed to contribute to generalizable knowledge about student performance and the research question can only be answered using a systematic investigation....
33 Pages (8250 words) Essay

Exercise during Pregnancy

The research proposal “exercise during Pregnancy” aims at investigating the potential influence of technology in supporting, as well as encouraging physical activity behaviors in the course of pregnancy.... The study focuses on the utilization of three directional objectives....
6 Pages (1500 words) Assignment

Defining Knowledge Management and Its Functioning

The aim of this study "Defining Knowledge management and Its Functioning" is to identify and define knowledge management and its functioning and application of theoretical concepts to real-world situations, designs, and tools, and its influence on an organization, with specific reference to Greece.... hellip; The present paper outlines that knowledge management, in its simplest definition, seeks to formulate the superlative use of knowledge obtainable to an organization and in so doing generating new knowledge that will ensure the survival and competence of an organization in a constantly evolving environment....
16 Pages (4000 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us