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HURDLE-20 : DATA INTERPRETATION - Liquidated Damages of Construction company.

(Solve this Hurdle by 20th April)

A construction company took a contract for building 6 identical residential projects (P1,P2,P3,P4,P5,P6) with the delivery date of the first project being 1st Jan 2004 and the remaining project to be completed at a interval of 60 days each. If all the projects were delivered on time the company would have earned a profit of 99.5 lakh in total. For delay in the delivery of each project, the liquidated damages are as following :
Rs . 10,000 per day for first 20 days, Plus,
Rs. 12,000 per day for the delay over 20 days but less than 41 days, Plus
Rs 15,000 per days for the delay over 40 days but less than 61 days, plus
Rs 20,000 per days for the delay over 60 days but less than 81 days, plus
Rs. 25,000 per day for the delay over 80 days.

As the delivery date approached, the project manager can clearly see that none of the projects cannot be delivered in time unless he invests more on labour and machinery. He has 10 options as following to change the delivery dates of the projects. Each option also has a cost attached to it that the company would require to pay for the overtime of workers and for extra machinery usage.

Answers of This Hurdle-20
Following are the answers and solutions of Hurdle 20 and answers send by some of subscribers
Hurdle 20-Answers

  Links of Hurdle 1 to 30
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OPTION 1: He make P1,P2,P3 to deliver on time thereby paying no penalty on the first three project and pays a penalty of 85 days, 65 days, 45 days respectively on the last three project. To implement this option it would cost Rs. 3.5 Lakh.

OPTION 2: He makes P1,P2 to deliver on time thereby paying no penalty on the first two project and pays a penalty of 66 days each on P3 and P4 and penalty of 15 days each on P5 and P6. To implement this option it would cost Rs. 10.5 Lakh.

OPTION 3 : He makes P1 and P3 deliver on time thereby paying no penalty on these two project. On P4 he will have to pay a penalty of 55 days and on P2,P5 and P6 he will have to pay penalty of 25 days each. To implement this option it would cost Rs. 12.5 Lakh.

OPTION 4 : He makes no changes and pays penalty of 45 days,42 days,70 days,86 days, 68 days and 70 days respectively
on P1,P2,P3,P4,P5,P6.

OPTION 5: He makes changes in allocation of resources in such a way that he has to pay a penalty of 35 day, 30 days , 25 days, 15 days, 5 days, 60 days respectively on on P1,P2,P3,P4,P5,P6. (UrPercentile.com) To implement this option it would cost Rs. 9.5 Lakh.

OPTION 6 : He makes changes in allocation of resources in such a way that he has to pay a penalty of 25 day, 20 days , 20
days, 10 days, 5 days, 65 days respectively on on P1,P2,P3,P4,P5,P6. (UrPercentil e.com) To implement this option it would cost Rs. 21.5 Lakh.

OPTION 7 : He makes changes in allocation of resources in such a way that he has to pay a penalty of of 25 days,10 days, 10 days , 5 days, 5 days, 5 days respectively on on P1,P2,P3,P4,P5,P6. To implement this option it would cost Rs. 22.5 Lakh.

OPTION 8 : He makes all the project to deliver on time and it would cost 34.5 Lakh to make it happen.

OPTION 9 : He makes P4, P5 and P6 to deliver on time and on P1,P2 and P3 has to pay a penalty for 35 days, 30 days and 25 days. It would cost the company 17.5 lakh to implement this option.

OPTION 10 : He make P3,P4,P5 and P6 deliver on time and pays penalty of 42 days and 25 day on P1 and P2. This option
would cost 21.5 lakh.

Q1. How much would be company's profit , if option 1 is selected?

Q2. How much would be company's profit , if option 2 is selected?

Q3. How much would be company's profit , if option 3 is selected?

Q4. How much would be company's profit , if option 4 is selected?

Q5. How much would be company's profit , if option 5 is selected?

Q6. How much would be company's profit , if option 6 is selected?

Q7. How much would be company's profit , if option 7 is selected?

Q8. How much would be company's profit , if option 8 is selected?

Q9. How much would be company's profit , if option 9 is selected?

Q10. How much would be company's profit , if option 10 is selected?

Q11. Which option should be selected to minimise the loss?

Q12. Which option if selected would maximise the loss, and thus would be the worst decision to make ?

Q13. If the company gets an incentive of Rs 2 Lakh for each project delivered on time, which option should be selected to minimise the loss?

Q14. If the company gets an incentive of Rs 2 Lakh for each project delivered on time, which option if selected would maximise the loss, and thus would be the worst decision to make ?

Q15. If somehow the implementation cost of each option is reduced to half, which option should be selected to minimise the
loss? Assume that there is no incentive for finishing the project on time.

Q16. If somehow the implementation cost of each option is reduced to half, which option if selected would maximise the loss, and thus would be the worst decision to make ? Assume that there is no incentive for finishing the project on time.

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MATCH THE WORDS IN SET A WITH THEIR MEANINGS IN SET B

SET A
Q17. Recusant, Q18. Trite, Q19. Carp, Q20. Nefarious, Q21. Obstreperous, Q22. Heresy, Q23. Ruminate,

SET B:
A. To come to a conclusion.
B. To implicate someone.
C. A person who refuses to obey authority.
D. Penchant
E. Made commonplace by overuse hence lacking interest.
F. Dole
G. Extremely wicked.
H. To keep complaining and finding fault
I. Waves of the sea
J. Boisterous.
K. To regurgitated partially digested food and chew again.
L. Stone carving.
M. Opinion contrary to popular belief

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