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Cost of operation should always be minimized by all available means. For a firm to remain competitive in the market, it must charge prices that are considered competitive (Kerzner 69).
This is only possible if it cuts down on the costs of production. H. L. Winman and Associates is no exception. For this firm to remain competitive in the current market, it must reduce its overhead costs to be able to earn any meaningful income.
In its current project, the client, Terrapin Control System expects the firm to deliver products within the specified time of three months. Every single day counts and any day that the project fails to operate for one reason or the other may lead to delay of the project.
However, this is expensive because for every single day past predetermined date, a fine of $ 1000 would be charged. This amount is too large and it would eat into the profits that this company would have earned. The current power supply is very unreliable.
The project has experienced power shortages twice and this destroyed tests for those particular days. This did not only increase the cost of production but also rendered the project two days behind the schedule. The project must be completed within the stipulated time to avoid fines.
The cost of production should also be minimized to ensure high profits are gained. There is therefore need to have a backup power supply to ensure that the process runs without any inconvenience.
Special Requirements of the Project
This project must be completed within the planned time in order to eliminate any fines. This would also help cut the costs associated with extended deadlines. Therefore, time is one of the most important resources in this project. To ensure success, the project demands a constant power supply.
Because the current power supply has proven to be unreliable, there is need to install a backup power supply that would ensure that no disruptions are caused by power outage from the current power supply.
For H. L. Winman and Associates, buying a backup power generator would be the best option. This company may consider leasing the generator at a lesser cost. However, the difference in cost is very negligible. It is therefore cost effective to buy as it could be used for future projects.
Buying also gives the firm an opportunity to control the generator fully hence, the project will be free from any external interruption. Two 12000 watts portable diesel generators with Subaru engines will be sufficient to operate the two units of the project.
Other alternative sources of energy that the project may consider include wind powered generator and solar panels. However, the two depends on nature, which may not be controlled as per the requirements of the project (Frame 45). This makes them unreliable sources of energy.
Twice the project has witnessed power outage that rendered brought business to a standstill. This wastage increased the total cost of production. It also rendered the project two days behind the schedule. The project cannot afford another power outage as it is already behind the schedule.
The generator will help maintain a constant power supply to ensure that the two units are maintained at the recommended temperatures. With constant power supply, the system can be programmed to shut down at night when the switches have been tested.
This would eliminate the need to hire personnel to monitor the chambers at night. Moreover, hiring personnel to monitor the system without a power backup may not make any positive difference. The personnel will have very little to do in case of a power outage.
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The two power generators will be sufficient to operate the two chambers successfully. The cost implications of the two generators are as follows:
The cost estimated above is about $ 15000. By meeting this cost, the management will be assured of the project running without any interruption until its completion. There will be no need to hire extra personnel further reducing the cost of labor.
This is a long-term investment as the generators can still be used in the subsequent projects. It is therefore cost effective in the end. By incurring the above cost, the management will be assured that the project will be completed in time hence avoid any penalties due to lateness.
The main aim of H. L. Winman and Associates in this project is to deliver quality service to its current client, Terrapin Control Systems, at the least cost possible. The management is keen to ensure that this client is satisfied so that a long-term business relationship can be developed.
For this to be successfull there is need for a proper power supply that would ensure the two chambers maintain temperatures to facilitate continuous test of switches. Through this, the client would be satisfied and the firm would maintain its competitive advantage in the market.
Frame, Davidson. Frame Managing Projects in Organizations’, How to Make the Best Use of Time, Technique, and People. New York: John Wiley & Sons, 2003. Print.
Kerzner, Harold. Project Management, a Systems Approach to Planning, Scheduling, and Controlling. New York: Wiley, 2003. Print.