Bath Tub Period

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Bath Tub Case Study Case Overview Park Industries was given the Scott Contract on January 3, 1987. If the Scott Project was managed effectively, it will open up tremendous opportunities for the company in the next several years. This Project is considered strategic in nature. Scott Project is a 10-month endeavor for a new product. If delivered successfully, sole-source production contracts (to be negotiated year-to-year) would follow for the next 5-years. Jerry Dunlap was chosen to be the project manager. He is aware of the impact of this project to Park Industries’ growth. For the Scott Project, he maintained the best employees consisting of- 7 full-time people (including Dunlap) throughout the duration of the project and 8 people from functional departments (4 full-time and 4 half-time). The team’s manpower level was constant at 2,080 hours/month with each person incurring a cost of $60.00/hr., fully burdened. At the end of June, with 4 months remaining, Scott Corporation informed Park Industries that due to cash-flow problem, follow-on work will not be rewarded until March 1988. Jerry is now worried that he would have to break up the project team after the Scott project is done and he will not be able to get the same people for the upcoming projects. Good project office personnel are always in demand. Jerry estimated that he needed $40,000/month during the “bathtub” period to support and maintain his key people. Fortunately, the bathtub period fell over the holiday season when the plant is shut down for 17 days and employees typically take time off. He revised his estimate to $125,000 for the entire bathtub period (approximately $36,215/month). With this estimate in mind, Jerry told the team members to “tighten their belts” for the remainder of the Scott Project in order to establish a $125,000 management reserve. The team understood. The team

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