The Kingsville Real Estate Co. (KREC) owns 800 acres of undeveloped land on a scenic area. In the past, little or no regulation was applied to new developments near the lake. As a result, lakeshores are now dotted with many vacation homes. Lack of sewage services, especially septic tanks, mostly improperly installed, are in extensive use. Seepage from septic tanks causes a severe water pollution problem. To curb further degradation in the quality of water, the Town of Kingsville officials approved strict regulations applicable to all future developments. 1. Only single-, double-, and triple-house units can be constructed, with the single-house units accounting for at least 50% of the total. 2. To limit the number of septic tanks, minimum lot sizes of 2, 3 and 4 acres are required for single-, double-, and triple-house units, respectively. 3. Multiple recreation areas of 1 acre each must be established at the rate of at least one recreational area per 200 houses. 4. To preserve the ecology of the lake, underground water should not be pumped for house or garden use. The president of KREC is studying the possibility of developing company's 800 acres. The new development will include single-, double-, and triple-house units. It is estimated that 15% of the acreage will be consumed for the openings, streets, and easements for utilities. KREC estimates the returns from the different housing units as (Table 3): Table 3: Cost Variates Housing unit Single Double Net return per unit' ($) 10,000 12,000 INote: Water service charges are included in the net return per unit. Triple 15,000 The cost of connecting water service to the area is proportionate to the number of houses constructed. However, the City stipulates that a minimum of $100,000 must be collected from water service charges for the project to be economically feasible. Additionally, the expansion of the water system beyond its present capacity is limited to 200,000 gallons per day during peak periods. Following data summarize the cost of connecting water service as well as the water consumption assuming an average size family (Table 4): Table 4: Cost Variates Housing unit Single Double Triple Recreation Water service charge per unit ($) 1000 1200 1400 800 (per acre) Water consumption per unit (gal/day) 400 600 840 450 (per acre) KREC wants to maximize their profits. a) Identify the decision variables? (3 Marks) b) What is the objective function? (2 Marks) c) What are the constraints? (4 Marks) d) Site preparation work for this project is currently underway. The site preparation work package is estimated 12,000 man-hours calculated at $60.00 per hour. Material costs were estimated as $100,000. The estimated duration was 6 months. The amount of the workload and material consumption for each month was estimated as 10%, 20%, 30%, 20%, 10%, and 10%. At the end of the 3rd month, Earned Value Analysis was performed and realized that only 40% of the work was completed. 45% of the man-hours were spent by the end of the 3rd month. Moreover, 40% of the materials were used by the end of the 3rd month. Approved "changes in the 2nd month cost an additional $ 15,000. Provide answers for the following questions based on the Earned Value Analysis at the end of 3rd month. i. ii. iii. iv. V. vi. vii. viii. What is the Budget at Completion (i.e., full project completion)? - (2 Marks) What is the Budgeted Cost of Work Scheduled? - (2 Marks) What is the Budgeted Cost of Work Performed? - (2 Marks) What is the Actual Cost of Work Performed? - (2 Marks) What is the Schedule Variance? - (2 Marks) What is the Cost Variance? - (2 Marks) What is the Estimate at Completion? - (1 Mark) What are your observations about the project's performance? - (1 Mark) The Kingsville Real Estate Co. (KREC) owns 800 acres of undeveloped land on a scenic area. In the past, little or no regulation was applied to new developments near the lake. As a result, lakeshores are now dotted with many vacation homes. Lack of sewage services, especially septic tanks, mostly improperly installed, are in extensive use. Seepage from septic tanks causes a severe water pollution problem. To curb further degradation in the quality of water, the Town of Kingsville officials approved strict regulations applicable to all future developments. 1. Only single-, double-, and triple-house units can be constructed, with the single-house units accounting for at least 50% of the total. 2. To limit the number of septic tanks, minimum lot sizes of 2, 3 and 4 acres are required for single-, double-, and triple-house units, respectively. 3. Multiple recreation areas of 1 acre each must be established at the rate of at least one recreational area per 200 houses. 4. To preserve the ecology of the lake, underground water should not be pumped for house or garden use. The president of KREC is studying the possibility of developing company's 800 acres. The new development will include single-, double-, and triple-house units. It is estimated that 15% of the acreage will be consumed for the openings, streets, and easements for utilities. KREC estimates the returns from the different housing units as (Table 3): Table 3: Cost Variates Housing unit Single Double Net return per unit' ($) 10,000 12,000 INote: Water service charges are included in the net return per unit. Triple 15,000 The cost of connecting water service to the area is proportionate to the number of houses constructed. However, the City stipulates that a minimum of $100,000 must be collected from water service charges for the project to be economically feasible. Additionally, the expansion of the water system beyond its present capacity is limited to 200,000 gallons per day during peak periods. Following data summarize the cost of connecting water service as well as the water consumption assuming an average size family (Table 4): Table 4: Cost Variates Housing unit Single Double Triple Recreation Water service charge per unit ($) 1000 1200 1400 800 (per acre) Water consumption per unit (gal/day) 400 600 840 450 (per acre) KREC wants to maximize their profits. a) Identify the decision variables? (3 Marks) b) What is the objective function? (2 Marks) c) What are the constraints? (4 Marks) d) Site preparation work for this project is currently underway. The site preparation work package is estimated 12,000 man-hours calculated at $60.00 per hour. Material costs were estimated as $100,000. The estimated duration was 6 months. The amount of the workload and material consumption for each month was estimated as 10%, 20%, 30%, 20%, 10%, and 10%. At the end of the 3rd month, Earned Value Analysis was performed and realized that only 40% of the work was completed. 45% of the man-hours were spent by the end of the 3rd month. Moreover, 40% of the materials were used by the end of the 3rd month. Approved "changes in the 2nd month cost an additional $ 15,000. Provide answers for the following questions based on the Earned Value Analysis at the end of 3rd month. i. ii. iii. iv. V. vi. vii. viii. What is the Budget at Completion (i.e., full project completion)? - (2 Marks) What is the Budgeted Cost of Work Scheduled? - (2 Marks) What is the Budgeted Cost of Work Performed? - (2 Marks) What is the Actual Cost of Work Performed? - (2 Marks) What is the Schedule Variance? - (2 Marks) What is the Cost Variance? - (2 Marks) What is the Estimate at Completion? - (1 Mark) What are your observations about the project's performance? - (1 Mark)
