assignment 7 for MGT
A1Homework_01
HU3500880_MGT254_Assignment4.docx
Kenneth Hutton
HU3500880
MGT 270 Assignment 4
Question 1
a. In such a case, a fixed price contract will be the best to use because a particular number of goods is given by the seller. 20,000 pencils are wanted by the company for the sellers to give a price that is fixed for the sold items. A fixed budget can be improvised by the buyer to pay for the goods with no surprises that are unwanted. It is not easy to make alterations in such kind of a contract after it is put in action. However, the odds of the need to edit and pencil type needed is quite minimal. Contract on fixed price basis is therefore the best for this situation.
b. In such a complex case, a cost plus contract is the most suitable with a fixed fee added. This is the best terms of contract as the project takes funds and pre-planning that is considerable in building the bridge. The contract that is most logical is therefore the cost plus fee that is fixed as buyer gets a worker who is dedicated to complete the work, with a set profit amount being earned by the contractor.
c. Having in mind that technology keeps evolving constantly, this task would be the best for a contract that is cost plus with a fee of award. Because the latest state-of-the-art circuit is needed, an incentive is provided for the provider of services to make most suitable product. The incentive on award is for the contractor to develop a product that is best possible.
d. A time and material contract would be the best for the situation. Contracted employees would be encouraged to maintain and operate the company in a similar manner that the current company is. The contractor will also acquire the incentive of continuing to perform at a level that is higher with a price that is reasonable.
Question 2
CPIF
Benefits
· . The criteria that is set has to be met for incentive fee to be earned
· Plans can be made by the contractor to reach set deadlines so as to meet incentive fee criteria that is needed.
Weaknesses
· The plan by contractor to reach bonuses get dismantled upon passing of deadline
· The contractor may delay project due to tiered system
CPAF
Benefits
· An award is not guaranteed for every company
· The contractor can perform well due to the incentive of award possibility
Weaknesses
· Award fee judgment may be harsh and very subjective
· Not having an award that is guaranteed may not provide enough motive for good performance by the contractor
