A company is currently located in Rafah and employs 50 people. Due to strong growth the company needs additional office space. The company has the option of renting additional space at its current location in Rafah for the next two years, but after that will need to move to a new building. Another option the company is considering moving the entire operation to Jabalia immediately. A third option is for the company to rent a new building in Rafah immediately. If the company chooses the first option and rent new space at its current location, it can, at the end of two years, either rent a new building in Rafah or move to Jabalia. The following are some additional facts about the alternatives and current situation: The company has a 75 percent chance of surviving the next two years. Renting the new space for two years at the current location in Rafah would cost $750,000 per year. Moving the entire operation to a Jabalia would cost $1 million. Renting space would cost $500,000 per year. Moving to a new building in Rafah would cost $200,000, and renting the new building’s space would cost $650,000 per year. The company can cancel the rent at any time. The company will build its own building in five years, if it survives. Assume all other costs and revenues are the same no matter where the company is located. WHAT COULD THE COMPANY DO?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
- A company is currently located in Rafah and employs 50 people. Due to strong growth the company needs additional office space. The company has the option of renting additional space at its current location in Rafah for the next two years, but after that will need to move to a new building. Another option the company is considering moving the entire operation to Jabalia immediately. A third option is for the company to rent a new building in Rafah immediately. If the company chooses the first option and rent new space at its current location, it can, at the end of two years, either rent a new building in Rafah or move to Jabalia.
The following are some additional facts about the alternatives and current situation:
- The company has a 75 percent chance of surviving the next two years.
- Renting the new space for two years at the current location in Rafah would cost $750,000 per year.
- Moving the entire operation to a Jabalia would cost $1 million. Renting space would cost $500,000 per year.
- Moving to a new building in Rafah would cost $200,000, and renting the new building’s space would cost $650,000 per year.
- The company can cancel the rent at any time.
- The company will build its own building in five years, if it survives.
- Assume all other costs and revenues are the same no matter where the company is located.
WHAT COULD THE COMPANY DO?
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