You are project manager for a construction project, and have the option of building a mock up before undertaking full scale construction The mock up is extensive and will cost $200,000 to build If you build the mock up, the probability that the full scale build at the site will not be as you intended is estimated to be 0 1 If this happens, there is an estimated extra cost impact of $100,000 for re work If you dont build the mock up, the probability that the full scale build at the site will not be as you intended is estimated to be 0 4 In addition, without the mock up, you will pursue an alternative construction method that, if re work is needed, will have an estimated extra cost impact of $450,000 For both cases, with and without the mock up, if the constructed result is adequate and no re work is needed, there is no cost impact a) Should you spend the extra $200,000 to build the mock up (You can assume there is no schedule impact of building the mock up to take into account when making the decision ) b) If the cost of building the mock up is reduced to $150,000, does your decision change as to whether you should build the mock up or not Problem 1 You are project manager for a construction project, and have the option of building a mock up before undertaking full scale construction The mock up is extensive and will cost $200,000 to build If you build the mock up, the probability that the full scale build at the site will not be as you intended is estimated to be 0 1 If this happens, there is an estimated extra cost impact of $100,000 for re work If you don't build the mock up, the probability that the full scale build at the site will not be as you intended is estimated to be 0 4 In addition, without the mock up, you will pursue an alternative construction method that, if re work is needed, will have an estimated extra cost impact of S450,000 For both cases, with and without the mock up, if the constructed result is adequate and no re work is needed, there is no cost impact Should you spend the extra $200,000 to build the mock up (You can assume there is no schedule impact of building the mock up to take into account when making the decision ) a) b) If the cost of building the mock up is reduced to $150,000, does your decision change as to whether you should build the mock up or not

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You are project manager for a construction project, and have the option of building a mock-up before undertaking full-scale construction. The mock-up is extensive and

You are project manager for a construction project, and have the option of building a mock-up before undertaking full-scale construction. The mock-up is extensive and will cost $200,000 to build. If you build the mock-up, the probability that the full-scale build at the site will not be as you intended is estimated to be 0.1. If this happens, there is an estimated extra cost impact of $100,000 for re-work. If you dont build the mock-up, the probability that the full-scale build at the site will not be as you intended is estimated to be 0.4. In addition, without the mock-up, you will pursue an alternative construction method that, if re-work is needed, will have an estimated extra cost impact of $450,000. For both cases, with and without the mock-up, if the constructed result is adequate and no re-work is needed, there is no cost impact.

a) Should you spend the extra $200,000 to build the mock-up? (You can assume there is no schedule impact of building the mock-up to take into account when making the decision.)

b) If the cost of building the mock-up is reduced to $150,000, does your decision change as to whether you should build the mock-up or not?

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Problem 1 You are project manager for a construction project, and have the option of building a mock-up before undertaking full-scale construction. The mock-up is extensive and will cost $200,000 to build. If you build the mock-up, the probability that the full-scale build at the site will not be as you intended is estimated to be 0.1. If this happens, there is an estimated extra cost impact of $100,000 for re-work. If you don't build the mock-up, the probability that the full-scale build at the site will not be as you intended is estimated to be 0.4. In addition, without the mock-up, you will pursue an alternative construction method that, if re-work is needed, will have an estimated extra cost impact of S450,000. For both cases, with and without the mock-up, if the constructed result is adequate and no re-work is needed, there is no cost impact. Should you spend the extra $200,000 to build the mock-up? (You can assume there is no schedule impact of building the mock-up to take into account when making the decision.) a) b) If the cost of building the mock-up is reduced to $150,000, does your decision change as to whether you should build the mock-up or not