A construction project consists of 10 identical units. The cost of the first unit is $25,000, and
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A construction project consists of 10 identical units. The cost of the first unit is $25,000, and a learning curve of 90% applies to the cost and the duration of consecutive units. Assume that the first unit takes 6 months to finish and that the project is financed by a loan taken at the beginning of the project at an annual interest rate of 10%.
a. Should the units be constructed in sequence (to maximize learning) or in parallel (to minimize the cost of the loan)?
b. Find the schedule for the 10 units that minimizes the total cost of the project.
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Related Book For
Project Management Processes Methodologies And Economics
ISBN: 9780130413314
2nd Edition
Authors: Avraham Shtub, Jonathan F. Bard, Shlomo Globerson
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