Homework Answers
Answer:
Target Price (T.P) = Target Cost + Target Fee
T.P = 1,000,000 + 100,000 = 1,100,000
PTA = [(Ceiling Price - Target Price) / Buyer's Share Ratio] + Target Price
PTA = [(1,300,000 - 1,100,000) / 0.8] + 1,100,000
PTA = (200,000 / 0.8) + 1,100,000 = 250,000 + 1,100,000 = 1,350,000
It means the cost of development should not touch the Point of Total Assumption (PTA) (1,350,000). And, it should be the target of the seller. If it touches PTA then all further cost overrun the seller has to pay.
Add Answer to:
5. In a project, a cost incentive contract has been awarded to a contractor with the...
5. In a project, a cost incentive contract has been awarded to a contractor with the...
5. In a project, a cost incentive contract has been awarded to a contractor with the following parameters: Target Cost 1,000,000 Target Profit for Seller 100,000 Target Price 1,100,000 Ceiling Price 1,300,000 Share Ratio 80% buyer-20% Evaluate the point of total assumption (PTA, breakpoint) of the project.
A Fixed Price Incentive Fee (FPI) contract has a Target Cost of $130,000, a Target Profit...
A Fixed Price Incentive Fee (FPI) contract has a Target Cost of $130,000, a Target Profit of $15,000, a Target Price of $145,000, a Ceiling Price of $160,000 and a share ratio of 80/20. e.) How much profit does the seller make if the actual cost is $120,000? f.) What is the ROS? g.) How much profit does the seller make if the actual cost is $ 165,000? h.) How much profit does the seller make if the actual cost...
The target cost of a fixed price contract is $50,000. The price of the contract is...
The target cost of a fixed price contract is $50,000. The price of the contract is targeted at $75,000 with a ceiling price of $100,000. The share ratio is 80/20. What is the Point of Total Assumption of this procurement? $100,000 $125,000 $81,250 $112,500
For cost plus incentive fee contract, calculate the final payment made to the supplier, Target cost...
For cost plus incentive fee contract, calculate the final payment made to the supplier, Target cost = $100,000 Target profit = $12,000 Maximum fee = $14,000 Minimum fee = $9,000 Sharing below target (customer/supplier) = 80/20 Sharing above target (customer/supplier) = 70/30 1) How much will the contractor be reimbursed if the cost of performing the work is $85,000? 2) How much will the contractor be reimbursed if the cost of performing the work is $120,000?
Calculate the organization's total cost for the following scenario: The organization has signed a cost-plus-incentive-fee contract....
Calculate the organization's total cost for the following scenario: The organization has signed a cost-plus-incentive-fee contract. The sharing formula is 90/10 (90 percent by buyer). The seller estimate of allowable expenses is $150,000. The target fee is set at $10,000. The maximum fee is $19,750. The minimum fee is $5,000. a. (15 points) Calculate the result if the project is completed by the seller at a cost of $146,000. b. (10 points) Calculate the result if the project is completed...
A Client has decided to use a Cost Plus Incentive Fee contract price arrangement to motivate...
A Client has decided to use a Cost Plus Incentive Fee contract price arrangement to motivate the Contractor to be more efficient and productive in executing the project. The Contractor’s Fee will be calculated based on a Sliding Fee approach by considering a $110,000,000 target price and a 4% Base (R). Calculate Contractor’s Fee and Total Payment to the Contractor for two following scenarios: Scenario 1) Actual Cost of Project = $102,000,000 Scenario 2) Actual Cost of Project = $124,000,000
Project Procurement Management Senior management at Manage Your Health, Inc. (MYH) decided that it would be...
Project Procurement Management Senior management at Manage Your Health, Inc. (MYH) decided that it would be best to outsource employee training on the Recreation and Wellness system, which will be rolled out soon. MYH also wants to outsource the incentive program designed to motivate employees to use the system and improve their health. MYH feels that the right outside company could get people excited about the system and provide a good incentive program. As part of the seller selection process,...
engineering economics A contractor has been awarded the contract to construct a 6-mile-long tunnel in the...
engineering economics
A contractor has been awarded the contract to construct a 6-mile-long tunnel in the mountains. During the 5-year construction period, the contractor will need water from nearby stream. She will construct a pipeline to carry the water to the main construction yard, an analysis of costs for various pipe sizes is as follows 3. Pipe Sizes (in) 24,000 28,000 30,000 Installed cost of pipeline and pump 20,000 Cost per hour for 1.5 0.75 0.55 0.35 Salvage value of...
1 You are the project manager in an engineering project and have recently signed a contract...
1 You are the project manager in an engineering project and have recently signed a contract with a software vendor for the development of a complicated control solution. The software will be used to control machinery equipment which your project team is currently developing. The contract is a lump-sum contract. The contractor has target cost estimated which seem rather low to you. Which of the following statements is not true for this situation? a It is the contractor's risk in...
Industrial Designs has been awarded a contract to design a label for a new wine produced...
Industrial Designs has been awarded a contract to design a label for a new wine produced by Lake View Winery. The company estimates that 150 hours will be required to complete the project. The firm’s three graphic designers available for assignment to this project are Lisa, a senior designer and team leader; David, a senior designer; and Sarah, a junior designer. Because Lisa has worked on several projects for Lake View Winery, management specified that Lisa must be assigned at...
5. In a project, a cost incentive contract has been awarded to a contractor with the following parameters: Target Cost 1,000,000 Target Profit for Seller 100,000 Target Price 1,100,000 Ceiling Price 1,300,000 Share Ratio 80% buyer-20% Evaluate the point of total assumption (PTA, breakpoint) of the project.
Calculate the organization's total cost for the following scenario: The organization has signed a cost-plus-incentive-fee contract. The sharing formula is 90/10 (90 percent by buyer). The seller estimate of allowable expenses is $150,000. The target fee is set at $10,000. The maximum fee is $19,750. The minimum fee is $5,000. a. (15 points) Calculate the result if the project is completed by the seller at a cost of $146,000. b. (10 points) Calculate the result if the project is completed...
engineering economics
A contractor has been awarded the contract to construct a 6-mile-long tunnel in the mountains. During the 5-year construction period, the contractor will need water from nearby stream. She will construct a pipeline to carry the water to the main construction yard, an analysis of costs for various pipe sizes is as follows 3. Pipe Sizes (in) 24,000 28,000 30,000 Installed cost of pipeline and pump 20,000 Cost per hour for 1.5 0.75 0.55 0.35 Salvage value of...
Most questions answered within 3 hours.
-
Random characters You decide to create a program characters.py
that fills a two-dimensional list with random...
asked 3 minutes ago -
What are the major sources of error in your determination of the
molar mass? Select all...
asked 7 minutes ago -
A. Suppose your manager indicates that for a normally
distributed data set you are analyzing, your...
asked 28 minutes ago -
During the month of August, the average temperature of a lake
next to a local college...
asked 10 minutes ago -
Which of these four researchers is most likely to have made Type
1 error
Kim who...
asked 24 minutes ago -
In a performance test, each of two cars takes 8.9 s to
accelerate from rest to...
asked 24 minutes ago -
Sapphire Aerospace operates 52 weeks per year, and its cost of
goods sold last year was...
asked 28 minutes ago -
Create ER Model
Assets are resources that are used in CMS to display content.
Each asset...
asked 23 minutes ago -
For each the following molecules draw the best possible
structure based on formal charges for each...
asked 29 minutes ago -
A proton moves in the plane of this paper toward the top of the
page. A...
asked 38 minutes ago -
different divisions differing lines of business use
different costs of capital because their cost of equity...
asked 34 minutes ago -
Give an algorithm to determine whether or not the elements
of
an array of integers are...
asked 41 minutes ago