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University of The Cumberlands Cost Reimbursable Contract Calculation Case Study

University of The Cumberlands Cost Reimbursable Contract Calculation Case Study

University of The Cumberlands Cost Reimbursable Contract Calculation Case Study

Question Description

Question 1

Your team has been asked to test and document enhancements to a web application that allows buyers to purchase custom-printed canvas shoes. The tasks and dependencies are as follows:

  • Create a testing plan

Once the testing plan is ready, your team can:

  • Test the user interfaces
  • Test the database
  • Test the network
  • Write the documentation first draft

When the user interface tests are complete, you can:

  • Perform user testing—enlist some users to test the user interface

When the database and network testing are complete, you can:

  • Perform integration testing—network with the database

When the user testing of the user interface and the database testing are complete, you can:

  • Perform integration testing—database, network, and user interface

When all integration testing and user testing are complete, you can:

  • Perform system testing

Then you can:

  • Review and revise documentation

After all other tasks are complete, you can:

  • Obtain management approval

Duration estimates for the tasks:

a.

3 days

b.

10 days

c.

6 days

d.

7 days

e.

20 days

f.

5 days

g.

3 days

h.

2 days

i.

8 days

j.

4 days

k.

5 days

  1. Create a network diagram and a Gantt chart for the project tasks. Ask your instructor if you are permitted to use software such as Microsoft Project to help you prepare your diagrams.
    1. What is the planned duration for the testing project?
    2. What is the critical path for the testing project?
    3. For each task NOT on the critical path, calculate the amount of slack available.
    4. If the user testing of the user interface takes 15 days, what will the impact be on the project duration?

Question 2

Wedding cost estimation: Given the following information, calculate the estimated costs for a wedding with 250 guests and a bridal party of six, using the methods indicated. Show your work.
Note that members of the bridal party are already counted as guests, you don’t need to add them twice.

  1. Parametric estimate
  2. Bottom-up estimate
  3. Analogous cost estimate
  4. You will probably notice some differences in the estimated values. Are these differences significant? What might cause the differences? If you were estimating a significant project in the future, which method(s) would you use and why?

Wedding Cost Estimates

Item

Dollars

Groom’s brother’s wedding, last year, 175 guests, similar venue and style

$20,300

Catering

$65 per person

Photographer

$1,500

Rental of hall

$500

Clothing, bride

$2,000

Clothing, groom

$750

Flowers

$800

Other décor items

$500

Cake

$500

Gifts for bridal party

$80 each

Wedding planner

$2,000

Wedding planner’s estimate of typical cost for this kind of wedding

$10,000 plus $75 per guest

Question 3

Cost reimbursable contract calculation.

  1. A contract calls for a total payment of $800,000 with a guarantee. Essentially the contractor is guaranteed to make at least $200,000 above his costs. If the contractor can demonstrate his costs exceed $600,000, the project will pay the difference, with a $50,000 ceiling on the overage. The contractor demonstrates he spent $623,000. How much (gross) must the project remit to the contractor?
  2. Another option for the same contract has the contractor guaranteed to be paid his costs plus 20%, for costs that exceed $600,000. With the same initial assumption—guarantee of $800,000 gross payment (no requirement to itemize costs), but if the contractor can show that costs exceed $600,000, the project will pay $800,000 plus the costs that exceed $600,000, plus 20% of those excess costs, with a ceiling of $900,000 gross. The contractor demonstrates he spent $623,000. How much (gross) must the project remit to the contractor?
  3. Under option 3.2, at what dollar amount of total costs would the contractor be assuming all of the excess costs beyond that point?
  4. In which option did the project assume more of the risk of a cost overrun? Explain.

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