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omis 338 De Leon Engineesing designs and constructs air conditioning and heating (HVAC) systems for hospitals and clinics. Currently the company's staif is overloaded with
omis 338
De Leon Engineesing designs and constructs air conditioning and heating (HVAC) systems for hospitals and clinics. Currently the company's staif is overloaded with detign work. There is a major doslgn project due in 8 weeks. The penalty for completing the design late is $14,000 per weak, 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 $12,000 per week (wages and overhead). including late weeks, to have company engineers complete the work. Ower. Roberta is also considoring having an cutside engineering firm do the design. A bid of $92.000 has been received for the completed design. Yet another option for completing the design is to conduct a foint design by having a third engineering company complete all electromechanical components of the design at a cost of $54,000. De Leon Engineering would then complate the rest of the design and control systems at an estimated cost of $32,000. Roberta has estimated the following probabilities of compleling the project within various fime frames when using each of the throe options. Those estimates are shown in the following table: The expected monetary valke using inside engineers to comploto the design is $ (Enter your response as an integer) The expecied monetary value using an outside engineering firm to complete the design is $. (Enteryour response as an integer) The expected monetary value of conducting a joint design is: (Enter your response as an integer) What is the best docision based on an expected monetary value criterion? Internal engereets External onginearing firm Joint design Step by Step Solution
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