The Bathtub Period Case Study

896 WordsJan 27, 20184 Pages
THE BATHTUB PERIOD CASE STUDY Park Industries was awarded an exclusive contract with the Scott Corporation in January 1897. The firm fix-priced contract consisted of a 10-month R&D project with possible follow-on contracts being awarded at the end of the initial project. It is important to say, Park Industries was elated with the prospect of future business with the Scott Corporation. Jerry Dunlap was selected as the project manager for the Scott project. In staffing the project, He was provided with seven full-time project office personnel and eight team members from the various functional departments within the company. Of the eight functional employees, four were assigned to the project full-time and four employees were assigned to the project part-time. The project was planned and scheduled and it was determined that for the duration of the project a total of 2,080 man-hours per month were required to complete the project. It was also determined that the average hourly wage was about $60.00 an hour per person. With four months remaining, Jerry was informed that due to funding issues, the Scott Corporation was not able to fund any follow-on contracts until March Next year. It is a great problem for Jerry because he did not wish to break the project. In order to keep his key personnel, Jerry estimated that he would need $125,000.00 to cover salaries during this period and approached his project team members regarding the situation. Jerry told the team members that
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