WZ Inc. is an event planning and promotion company who organizes events of different sizes for their clients. Planning and managing events have more than their fair share of frustrations and stressors. From last-minute changes to procrastinating clients, the profession isn’t for the faint of heart. Luckily, executing a successful event makes everything else (like the crazy long hours) worth it. There is a major event planning project due in 8 weeks. The penalty for planning the event late is $14 000 per week, since any delay will cause the venue to open later than anticipated, and cost the client significant returns. If the company uses its inside event planner to complete the planning, it will have to pay them overtime for all work. WZ Inc. has estimated that it will cost $12 000 per week (wages and overhead), including late weeks, to have the event planners finish the job. WZ is also considering outsourcing the planning work to other event planning companies. A bid of $92 000 has been received for the completed event plan. Yet another option for completing the job is to conduct a joint planning by having a third party complete all the preliminary work at a cost of $56 000. WZ would then complete the rest of the planning at an estimated cost of $30 000. WZ has estimated the following probabilities of completing the project within various time frames when using each of the three options. Those estimates are shown in the following table:
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
2. WZ Inc. is an event planning and promotion company who organizes events of different sizes for their clients. Planning and managing events have more than their fair share of frustrations and stressors. From last-minute changes to procrastinating clients, the profession isn’t for the faint of heart. Luckily, executing a successful event makes everything else (like the crazy long hours) worth it. There is a major event planning project due in 8 weeks. The penalty for planning the event late is $14 000 per week, since any delay will cause the venue to open later than anticipated, and cost the client significant returns. If the company uses its inside event planner to complete the planning, it will have to pay them overtime for all work. WZ Inc. has estimated that it will cost $12 000 per week (wages and overhead), including late weeks, to have the event planners finish the job. WZ is also considering outsourcing the planning work to other event planning companies. A bid of $92 000 has been received for the completed event plan. Yet another option for completing the job is to conduct a joint planning by having a third party complete all the preliminary work at a cost of $56 000. WZ would then complete the rest of the planning at an estimated cost of $30 000.
WZ has estimated the following probabilities of completing the project within various time frames when using each of the three options. Those estimates are shown in the following table:
Probability of completing the planning
Alternatives
On Time
1 Week Late
2 Week Late
3 Week Late
Internal Planner
.4
.5
.1
-
Outsourcing
.2
.4
.3
.1
Joint Work
.1
.3
.4
.2
What is the best decision based on an expected monetary value criterion?
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