On October 31, Juan Jackson sent a memo to his boss, the director of project management, stating that the ABX project would require thirteen weeks for completion. Juan realized that the customer wanted the job completed in less time. After discussions with the functional managers, Juan developed the table attached.
a. According to the contract, there is a penalty payment of $5,000 per week for every week over six. What is the minimum amount of additional funding that Juan should request?
b. Suppose your answer to part a gives you the same additional minimum cost for both an eight-week and a nine-week project. What factors would you consider before deciding whether to do it in eight or nine weeks?
