Activity 11: Develop a Gantt chart, using Microsoft Project, for the WBS you created for the alternative solution you selected as best.
A discussion of Gantt charts and an illustration of a Gantt chart generated using Microsoft Project are provided in the reference list. The illustration is similar to what you will produce for your Activity 11. It illustrates the level of detail appropriate for the Gantt chart you prepare for your project. Submit your Gantt chart as a .mpp file (a file produced by Microsoft Project).
T11-Gantt Chart.pdf
Activity 12: Prepare the Performance Requirements Summary for your recommended solution. Use the PRS template in the IT Economics document titled T12-PBWS.pdf. This statement will be the heart of your request for a proposal, assuming you will prepare and distribute one to solicit proposals. (You will not be asked to prepare an RFP in this course.)
The IT Economics Template 12 for a Performance Requirements Summary is provided in the reference list. Note: The Template material describes how the PWS and the WBS are related to each other and how they should be cross-referenced. You are not required to cross-reference them for your individual project.
Providing PWS Information to Potential Contractors
Performance-Based Work Statements
IT Acquisition Template 12
Role of the Performance-Based Work Statement
At this point, you should have prepared a work breakdown structure and a Gantt chart for your selected
alternative solution to the performance problem. You should have made a clear determination of your
objectives, the quality standards required, and the desired schedule for implementing the solution. You
are ready to make sure you have identified all of the required outcomes for the solution.
At this point, you should not be too concerned with the methods that the contractor will use, but should
be very concerned with obtaining the desired results, the desired quality, an acceptable schedule, and a
way of monitoring the achievement of these objectives. Also, you want to provide incentives for the
contractor to do a good job and to provide penalties if the contractor does not performance as required
by the contract. You may be willing to pay more for a solution that exceeds the stated performance
requirements if the value justifies the price.
These are elements that you want to build into your PBWS. Template 12 will help you summarize all of
these performance requirements. You want to be sure that none is missed, because it would mean that
the contract would need to be modified to make up for the oversight. Template 12 is a tool to help you
make sure that you have covered all of the basis, so to speak.
Template 12 is important because the performance-based work statement is the foundation of the
contract you will negotiate with the selected contractor. This is the basis for “performance-based
contracting,” which federal regulations define as:
“Performance-based contracting” means structuring all aspects of an
acquisition around the purpose of the work to be performed with the
contract requirements set forth in clear, specific, and objective terms with
measurable outcomes as opposed to either the manner by which the work is
to be performed or broad and imprecise statements of work. (Definition of
performance based contracting taken from FAR Subpart 2.101.)
There are certain basic categories of information that you will need to include in your performancebased work statement. They are:
•
Required outcomes or results – These are the demonstrable results, or outcomes, from
conducting the project. These outcomes need to be complete, accurate, and clearly stated
because they will be provided to the contractor in the written PBWS. If an outcome is not
stated, the contractor is not obligated to produce it. Required outcomes need to be stated in the
present tense, such as :”Product unit cost is reduced by 20%.” If you’ve prepared traditional
statements of work (SOWs) in the past, keep in mind how a PBWS differs from a SOW. The
PBWS replaces the SOW.
•
Performance standards – These are the performance standards for completeness, reliability,
accuracy, timeliness, etc.
•
Acceptable quality levels (AQL) – These generally refer to the degree of accuracy, completeness,
reliability, timeliness, and so forth applicable to each outcome. They take into account possible
exceptions or allowable deviations from the performance standards. For example, the
performance standard may be a 3-second response time for a certain type of online query. The
acceptable quality level might be “98% of the time.” A “Priority 1” deliverable may need to be
on time and accurate 99.5% of the time, while a “Priority 2” deliverable may need to be on time
and accurate 95% of the time. The AQLs may be stated as part of the performance standards (as
in Template 12).
•
How contractor performance will be monitored – Monitoring methods can include, for
example, physical observation, weekly project status reports, results on performance
dashboards, financial reports, user surveys, sampling, and statistical analysis.
•
Incentives and disincentives (penalties) – These are intended to motivate the selected
contractor to do good work or to exceed the requirements (e.g., for meeting objectives earlier
than scheduled), yet penalize the contractor if performance requirements are not met.
The following is a template that can be used to document the core elements of the Performance-Based
Work Statement (PBWS).
Required Outcomes
Performance Standards
Monitoring Methods
Incentives and Disincentives
(What must be demonstrated or
accomplished as the end results of
this contract?)
(What performance standards and
acceptable quality levels/metrics
will be used for the outcomes?)
(What monitoring methods will our
organization use to determine that
success has been achieved?)
(For Meeting or Not Meeting the
Desired Outcomes and/or
Performance Standards)
[Describe first required
outcome.]
[Describe second required
outcome.]
[Describe third required
outcome.]
[Describe fourth required
outcome.]
[And so on, as needed]
[Describe the performance
[Describe the monitoring or
standards and acceptable
surveillance method.]
quality levels.]
[Describe the performance
[Describe the monitoring or
standards and acceptable
surveillance method.]
quality levels.]
[Describe the performance
[Describe the monitoring or
standards and acceptable
surveillance method.]
quality levels.]
[Describe the performance
[Describe the monitoring or
standards and acceptable
surveillance method.]
quality levels.]
[And so on, as needed]
[And so on, as needed]
Template 12. Performance-Based Work Statement
[Describe the incentives and
disincentives.]
[Describe the incentives and
disincentives.]
[Describe the incentives and
disincentives.]
[Describe the incentives and
disincentives.]
[And so on, as needed]
Example of Entries (This is not the complete filled-in template):
Required Outcomes
Performance Standards
Existing digital graphic
images are converted to the
Group IV TIFF format suitable
for the new graphics
management system, with
Optika’s proprietary header
removed from each image.
99% of existing digital graphic
images are converted
without error to the Group IV
TIFF format, with the Optika
header removed, and are
suitable for the new graphics
management system.
99% of the converted images
can be accessed and
manipulated by users of the
new graphics management
system with no error due to
image conversion,
compatibility of a converted
image, or entry of the image
into the system’s database.
The new graphics
management system
database is populated with
the converted graphic images
and the images can be
accessed and manipulated by
users of the new system.
Monitoring Methods
Incentives and Disincentives
Random samples of
converted images.
+2.5% of contract price for
exceeding the performance
standard; -0.5% of contract
price for each negative
variance of 0.5% from the
performance standard.
Use of graphics management
system to access and
manipulate random samples
of the converted images in
the system’s database.
+2.5% of contract price for
exceeding the performance
standard; -0.5% of contract
price for each negative
variance of 0.5% from the
performance standard.
Your Performance-Based Work Statement (PBWS) should use Template 12, above, which is a summary
of the performance information that will be included in the PBWS in the request for proposal. The
template facilitates reviews to ensure that the focus is on outcomes and related information and not on
“how” the work is done. The information in the template is the heart of the written PBWS provided to
potential contractors.
Relation to the Work Breakdown Structure
The work breakdown structure (WBS) identifies the deliverables that the project is to provide. Your
PBWS describes those deliverables as measurable outcomes. The PBWS and the WBS should be crossreferenced. This will help to confirm that all of the intended deliverables are listed in the PBWS. The
content of the PBWS will give project team members working with the WBS a clear understanding of
what must be delivered and how it will be measured. Having each deliverable in the WBS described in a
measurable way in the PBWS is not only advantageous to the individuals and teams preparing each
deliverable, it also facilitates project management, especially deliverable tracking and quality control.
[Students are not required to cross-reference their WBS and PBWS unless it is a course assignment.]
NOTES:
1. This template should be used with a Microsoft Word (or other word processor) document. It should
not be used in an Excel worksheet because this is not an appropriate medium for transmitting the
document to others or for printing it for distribution.
2. The template is adjustable. After the template is copied to a Word document, replace the preexisting entries in the data cells with your own information. You can change the length and width of
the template and its cells after you copy the template to your document. If you put your cursor on a
line in the template, the line can be moved horizontally or vertically, depending on the line, to best
fit your information. There is no need to color any of the cells in your Word version, though color is
used in the example above.
The Gantt Chart
IT Acquisition Template 11
Templates 1 through 10 provide the objectives of the proposed project, the requirements, and the
constraints, such as cost limits and a required or target date for completing the project. The results from
using the ten preceding templates give you the information needed to prepare a Gantt chart, which is
essentially a project schedule showing the beginning and ending dates of each task, the resources
required by each task, and the milestones in the project. A milestone is an important event, such as the
completion of a project phase or the completion and acceptance of a key deliverable.
In some cases, the statement of work (SOW) or performance-based work statement (PBWS) is prepared
before the Gantt chart. You do not need to rely upon a work statement in order to prepare your Gantt
chart because all of the information required for the preparation of a SOW or PBWS has been generated
by Activities 1 through 10. However, after you have prepared your Gantt chart you should in most cases
strive to develop a performance-based work statement (PBWS), which is an improvement over the
SOW.
The objective in preparing a Gantt chart is to determine what would be a realistic schedule for the
project so your organization can plan accordingly and be in a better position to evaluate proposed
schedules submitted by competing contractors. In their proposals responding to your RFP, contractors
will include their proposed Gantt charts. You, as the buyer, will have your own Gantt chart that can help
you to evaluate those submitted by contractors.
The PBWS identifies the outcomes that must be produced by the project to implement your solution. A
Gantt chart provides your view of the project schedule for implementing your solution. A Gantt chart
and a PBWS are key inputs in preparing the request for proposal (RFP) that is to go to prospective
external service providers (contractors). Keep in mind that the Gantt chart is a tool for planning and
managing the project. It focuses on the phases and tasks of the project and not on pre-project
planning activities.
Assigning Resources
In order for project tasks to be scheduled efficiently and effectively, resources must be assigned to tasks.
In doing so, you need to temporarily wear both your own hat and the hat of a contractor in assigning
resources to tasks. Staffing involves assigning individuals and other resources necessary to accomplish
each task, including the tasks that a contractor is expected to perform. Some tasks can be performed in
parallel and some must be performed in a certain sequence because, for example, they depend on an
output from another task. We know that one person cannot be 100% on two tasks at the same time, but
the person could perform both tasks if they could be scheduled in sequence. We need to know when
task sequencing might lengthen the project too much, perhaps exceeding an important date when the
system needs to ready for use.
Different tasks may require different skills to perform them efficiently and effectively. At the same time,
it is important to make the best use of each individual (resource) assigned to the project. Accordingly,
the knowledge and skill requirements of tasks need to match as closely as possible the knowledge and
skills of the individuals to which the tasks are assigned. As an example, a training specialist should be
assigned to training tasks and not to, for example, system design or software development tasks.
The resources assigned to the Gantt chart should reflect those identified in the related WBS. It is
possible that preparing the Gantt chart will identify the need for resources that were overlooked when
preparing the WBS. If so, the WBS should be updated to reflect that added resources or resources that
were identified.
WBS Codes in the Gantt Chart
The phases and tasks in the Gantt chart need to be identified with the same WBS codes used to identify
the phases and tasks in the related WBS. This provides a useful cross-reference.
Negotiations and Gantt Chart Modifications
After proposals responding to the RFP have been received and evaluated, there are usually negotiations
with the finalists (two or three contractors, perhaps more). The negotiations will lead to the selection of
the “best” source, the winning contractor. The buyer organization and the winning contractor will then
negotiate a final “contract PBWS” and related “contract WBS” and, depending on the type of contract
and project, a “contract Gantt chart.” These may differ in many ways from those originally prepared by
the buyer organization before issuing the RFP.
Assuming you are the buyer, you must prepare the buyer’s original Gantt chart. It will be based on your
WBS and other information documented in your previous templates. Your WBS, Gantt chart, and PBWS
will provide you with a basis for evaluating the proposals received from potential contractors.
Nature of Gantt Charts
A Gantt chart is used in IT acquisitions to schedules tasks and resources over the life of the project. It is
an aid to planning, coordinating, and tracking project tasks. The Gantt chart takes into account the
resources required by each phase and task in the project. One of the objectives is prepare a task
schedule that balances and controls the use of resources to maximize efficiency and effectiveness and to
successfully complete the project as of a target date.
In project management, a software tool such as Microsoft Project is generally used to help construct a
Gantt chart. Although you can find documents describing using Microsoft Excel to develop Gantt charts
or even using Microsoft Word, the projects involved are usually small and relatively simple. Excel lacks
many important capabilities contained in Microsoft Project, so it is not a tool recommended by
experienced project managers. A professional project management software system is the
recommended tool. Microsoft Project is probably the most popular project management software
system and one of its strengths is facilitating the development of a professional Gantt chart for planning
and managing a project.
In a Gantt chart, a bar is used to depict the length of a phase or a task. The bar is set against a calendar,
so the dates for the beginning and end of the phase or task can be seen.
Gantt charts enable the planning team to determine how to best schedule project phases, tasks, and
resources, taking into account project objectives, when resources are available, the interdependencies
among tasks, target or required completion dates, and other considerations. Some Gantt charts build in
the capability to use related tools, such as Earned Value Management (EVM).
Gantt charts have a number of specific advantages. They help to:
•
•
•
•
Lay out the order in which tasks need to be carried out
Manage the interdependencies between tasks
Determine and schedule the resources needed
Monitor task performance against the schedule when the project is under way
Even with a relatively simple Gantt chart, it is still necessary to identify the resources used by each task
and note the milestone events. Scheduling the effective use of resources, such as specific individuals
with certain skills, can be challenging because there are often competing demands and other
constraints.
Scheduling Tasks and Resources
Scheduling the tasks and the use of resources can require many tradeoffs because of the inter-task
dependencies and the limits on the amounts of resources, and when specific resources will be available.
Your WBS, since it identifies phases and the tasks and the resources required, is an important input to
the Gantt chart preparation process.
It is recommended that you use Microsoft Project’s built-in guides for completing each section in the
development of your Gantt chart. As suggested by the guides, here is a general approach for developing
a Gantt chart:
1. List the project phases.
2. In each project phase, list the tasks in their chronological order, taking into account which tasks
cannot be started until a preceding task (or tasks) is completed. In doing this, also take into
account the resources required and how they will be used by each task. Do not attach start or
end dates to the tasks at this point.
3. Alongside of each task, identify its product or deliverable.
4. Enter the estimated calendar time required to complete each task and the resources required to
do the work in that amount of calendar time.
5. Now note the date when the project must be finished and enter it as the end date for the last
task and the phase it is in.
6. Work backward from the project end date to schedule the tasks. Take into account tasks
dependencies. Also, consider whether certain tasks can be performed in parallel. Adjust
calendar lengths of tasks and resources as needed to fit within the project time frame. This can
require many tradeoffs to arrive at the best schedule within the time and resources constraints.
7. Identify all of the milestones, such as the end of a phase or the completion and expected
acceptance of a key deliverable.
This procedure can help produce a reasonable Gantt chart. Several iterations are usually required before
the final schedule and Gantt chart are achieved. Generally, the members of the integrated project team
(IPT) as well as others, especially representatives of the user groups, participate in the preparation of
the chart. If the organization has a program office, it is usually a participant, either through the IPT or
through a review and recommendations process.
Screenshot of Microsoft Project Gantt Chart
A screenshot of Microsoft Project-prepared Gantt chart is shown below. Look at the left-most column
(after the line numbers) and you will see a column heading “WBS.” This is a column heading you must
enter so your phases and tasks can be marked with the WBS numerical designations, as was done in this
illustration.
Figure 12. Illustration of a Microsoft Project Generated Gantt Chart
Contractor Use of WBS and Gantt Chart
As stated above, the buyer organization generally prepares a WBS and Gantt chart internally as part of
its project planning. When there is to be an acquisition of IT services from an external source, the WBS
and Gantt chart, as well as other aspects of the implementation plan, are likely to be modified by the
selected contractor’s proposal and the final negotiated contract. The contractor will likely take the
negotiated WBS and Gantt chart and develop them in greater detail for its own internal management
purposes. These more detailed versions are usually not provided to the buyer organization.
Your Gantt Chart
As stated above, it is recommended that you use Microsoft Project and its built-in guides to prepare
your Gantt chart. The guides provide much assistance.
1
Activity 7-10 Project Management Software
Stacy-Winifred B Taylor
IMAT 637 9040
7/1/22
2
Activity 7
Alternative 1
Alternative 2
Value Assessment
Criteria
ROI and NVP
Strategic Match
Competitive
Response
Definition Certainty
Executive Support
Quality of Work Life
Enterprise
Architecture
Total Weighted
Value Score
IT INVESTMENT ASSESSMENT Matrix
Property Management System
use Software as a Service (SAAS)
Alt 1
Alt 2
Criterion
Alt 1
Weighted
Alt 2
Weighted
Weight
Ratings
Scores
Ratings
Scores
8
5
40
5
40
4
5
20
5
20
5
4
Alt 3
Weighted
Scores
40
16
Alt 3
Ratings
2
2
2
1
5
5
4
4
10
10
8
4
4
4
3
4
8
8
6
4
4
4
3
4
8
8
6
4
1
5
5
4
4
4
4
97
90
86
Activity 8
Risk
Assessment
Criteria
Organizational
Risk
Infrastructure
Risk
Information
Security
Complexity
Risk
External Risk
Total
Weighted Risk
Score
Criterion
Weight
Alt 1
Alt 2
Alt 1
Weighted Alt 2 Weighted Alt 3
Ratings
Scores
Ratings
Scores
Ratings
Alt 3 Weighted
Scores
6
1
6
2
12
3
18
4
1
4
2
8
3
12
4
2
8
2
8
4
16
3
3
3
3
9
9
3
5
9
15
4
5
12
15
36
52
73
The most cost-effective option from the list above, when weighing the advantages, costs, and dangers,
is:
Invest in a centralized Property management system.
3
Activity 9 Value Proposition
The switch from manual processes to computerized ones and the installation of closedcircuit television cameras (CCTV) in every area of the Hotel will, in addition to improving the
record-keeping system and raising the level of safety throughout the establishment, result in an
annual cost savings of $10,000 for the business.
Activity 10 Acquisition Strategy Statement
Name of IT Services Acquisition Project: Computerized System and CCTV Cameras Submitted
by: Stacy Taylor Date Submitted: 7/4/22
Proposal Summary
The Royal Suites Hotel intends to purchase cutting-edge computerized technology and
CCTV cameras shortly. These upgrades will help the Hotel enhance its services and activities
while enhancing its safety level. However, This will be necessary to cut expenses, improve data
storage operations, and strengthen data security. Because the upgraded information will be freely
available and in good condition, the management can make quick decisions thanks to upgrading
computerized systems. The systems will work with various operating software, including
Windows 10, 11, and Linux. Eight thousand dollars’ worth of expenses will be incurred due to
the procurement and its subsequent installation. The cost takes into account the purchase, its
subsequent installation, and the installation of an internet connection, cloud computing
connections, and employee training following the findings (Jayanth et al.,2020). Implementing
the new system will signal the end of the use of antiquated technology, reduce the number of
instances of theft and other security problems, and boost earnings by making it more
4
straightforward for customers to make purchases. When making investments, choosing the
appropriate tools for everyone is essential, as the company’s performance can only be improved
by making suitable investments in the proper people and devices.
This purchase endeavor is fraught with a variety of hazards, including organizational
risks, risks about information security and privacy, risks about complexity, risks about structures,
and external risks. It is hypothesized that the likelihood of these hazards materializing into actual
consequences is. Eliminating the vendor’s control over the system will be good in terms of risk
reduction.
2. System Life Cycle
Implementation of
Control and
computerized systems
Cost: 8,700
Design Stage
Testing Stage
Internal
Test
Databas
e
Integration
Test
Softwar
e
Cost: 3,500
Cost: 2,500
3. Basic
Acquisition Approach
Development
Phase
cost: 2,000
5
Cloud computing is becoming increasingly popular among organizations since it enables
administrators and staff members to access and work with an organization’s information from
any location. A new computerized system will be purchased from a vendor who will also be
responsible for the processes of staff training and installation, according to the strategy that
management has decided to implement throughout the process of making the acquisition. This
strategy will be put into effect.
The research on the product was carried out by surveying other Hotels and businesses
that had already implemented the system to investigate the positive effects that the system had on
the Hotels. In addition to the survey, various methods of data collecting and analysis were
utilized, including interviewing and ethnographic research. To obtain precise and comprehensive
information, one-on-one interviews with actual system users. With the help of this strategy,
information about the system’s operation was successfully acquired. Because retrieving
information became simple and quick, the recovered data was very dependable, which
contributed to the general functionality of the system in terms of serving clients and paying them
for their purchases.
During the interview, the management of the Hotel emphasized how the decision-making
process has been made more straightforward as a result of the availability of adequate data at the
appropriate moment. The poll findings suggested that employees felt less weary when working
with the system and liked the new system over the old, outdated one since it made work more
accessible. The survey also indicated that employees preferred the new system over the outdated
one. By doing ethnographic research on both the staff and the consumers, researchers understood
better how both parties felt when utilizing the system to serve others and how satisfied they were
with the experience overall. Establishing a reliable internet connection network at the highest
6
possible speed is, in my opinion, the single most crucial consideration to make when shopping
for a new computer system. Because of this research, we finally understand how important the
system is for efficiency.
3.1 Use Case Competition
To achieve our primary goal with this acquisition, which is to increase the company’s earnings
and revenues, our primary objective is to locate a system that provides security services and
makes sales easier. Most hotels that catered to the same market had already purchased the
system, which made its installation procedure go quickly. In addition, the system needed a low
overall cost while increasing in value over time. The selection process was designed to be open
so that each potential vendor could present their wares to our company. The choices that made it
onto the final list were based on the remunerations offered, the dangers involved, the return on
investment, the cost, and the timetable.
3.2 Potential Sources
The process of installing our computerized system and CCTV cameras will be handled by
several vendors who have been determined to be in a solid position to do so. However, there is a
requirement that the proposals be presented to the management so that they can be evaluated and
reviewed (Chamoso et al.,2018). Modis, bridge technical talent, and TEKsystems were the three
major qualified suppliers featured in the competition. Even though TEKsystems could have been
the most suitable choice, the Modis company was chosen as the supplier. TEKsystems has an
excellent reputation in the IT business and a good market share in the major cities of Asia,
Europe, and the United States. They also have staff that is highly knowledgeable and skilled;
nonetheless, our concern with their price caused the management to decide to go with Modis.
3.3 Contract Type
7
To complete the acquisition process, the management has settled on using a contract with
the vendor with a Firm-Fixed-Price (FFP) clause. Because our company is not so large, the entire
price of the fixed-price contract is first agreed between the two parties before the contract is
signed. The price quotation in the agreement is not open to any adjustments; this is an essential
provision that helps keep costs under control while placing the risks on the vendor. After the
money is placed into the vendor’s account, all the burdens are on the vendor. Cost rises won’t
hurt the company. The contract provides the vendor with the benefit of giving him the right to
have complete control over the expenses by giving him the option to manage the costs while still
providing quality services. However, This is an advantage for the vendor.
3.4 Contract Incentives and penalties
Contract language specifies that the vendor will be compensated if certain milestones are
met within a certain period of time, which protects both the vendor and the other party to the
agreement. It was necessary to add this clause in the contract to secure the interests of both
parties. The award fee incentive in the contract is designed to encourage the vendor to deliver on
time to save time and money. If the vendor fails to meet the needed criteria, a punishment
provision will be introduced to guarantee that they don’t put in an unsatisfactory amount of
effort. If this happens, the vendor will be held liable for the costs of purchasing and installing a
new CCTV system and cameras, which the customer will cover. An award fee was included in
this contract as a sort of incentive. The government can use an award fee as an incentive to
motivate a contractor if and when it so desires. It could not use any other incentives because the
performance could not be reliably measured. We have a back-up incentive ready to be integrated
into a provision in case things don’t go as planned. Within a defined time frame, the condition is
8
a duty that must be fulfilled in line with the terms of the contract. The ultimate purpose is to
protect one or both people involved in the initiative.
3.5 Risk Assessment
There is no such thing as a project that does not involve some risk. Because of this, while
we were purchasing this system, we eliminated a significant number of risks by considering
other solutions. The answers were found by considering the likelihood that anything undesirable
would occur. Our primary concerns were organizational risks, concerns regarding privacy and
information security, risks associated with dealing with outsiders, risks related to dealing with
complexity, and risks related to dealing with infrastructure. We have concluded that all of the
participating stakeholders in the business as well as the business structure should engage the
team that is in charge of the project. This will ensure that the risks are well minimized. Because
management always operates with the assumption that employees would agree with whatever
they say, the organization’s risks will likely be evaluated. They were creating an internal risk
management program, training employees on how to use the new system, and performing system
maintenance as part of developing a comprehensive risk management program. Additionally,
they were using appropriate risk controls to execute the database, training employees on how to
use the new system.
The arrangement that we went with was not without its share of potential downsides. The
seller-provided price was far higher than what was anticipated to be paid. Because the risks
connected with this type of contract are more likely to be borne by the vendor than by the
customer, it was up to us to choose a fixed-price arrangement. Though, the seller wants to err on
the side of caution, so they set the price higher; however, because the contract has a fixed price,
there is no space for bargaining. Another unknown risk or disadvantage is included with changes
9
in market patterns. If the cost of the system suddenly goes up, then we will be in a better
position, but a decline in the price of the system implies that we will incur a loss. However, This
is because if we could have waited even one minute longer, the loss would have been on our
side.
10
References
Chamoso, P., González-Briones, A., Rodríguez, S., & Corchado, J. M. (2018). Tendencies of
technologies and platforms in smart cities: a state-of-the-art review. Wireless
Communications and Mobile Computing, 2018.
Jayanth, B. V., Prathap, P., Sivaraman, P., Yogesh, S., & Madhu, S. (2020). Implementation of
lean manufacturing in the electronics industry. Materials Today: Proceedings, 33, 23-28.