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De Leon Engineering designs and constructs air conditioning and heating (HVAC) systems for hospitals and clinics. Currently the company's staff is overloaded with design work.
De Leon Engineering designs and constructs air conditioning and heating (HVAC) systems for hospitals and clinics. Currently the company's staff is overloaded with design work. There is a major design project due in 7 weeks. The penalty for completing the design late is $15 comma 000 per week, since any delay will cause the facility to open later than anticipated, and cost the client significant revenue. If the company uses its inside engineers to complete the design, it will have to pay them overtime for all work. Owner Roberta De Leon has estimated that it will cost $11 comma 000 per week (wages and overhead), including late weeks, to have company engineers complete the design. Roberta is also considering having an outside engineering firm do the design. A bid of $85 comma 000 has been received for the completed design. Yet another option for completing the design is to conduct a joint design by having a third engineering company complete all electromechanical components of the design at a cost of $56 comma 000 . De Leon Engineering would then complete the rest of the design and control systems at an estimated cost of $30 comma 000 . Roberta has estimated
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