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Kapala Con Comp Cas

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Kapala Construction Company Case

Table of Contents

Project Overview………………........

Executive Report…………………….


Appendix 1………………………….

Appendix 2………………………….

Appendix 3 …………………………

Appendix 4………………………….

Project Overview

The Kapala Construction Company is building the new Kona Country Club Villas project, consisting of 18 buildings, each housing 10 condominiums. Each building will border the Kona Country Club golf course designed by Arnold Palmer. The minimum price for a condominium unit is $275,000, and buyers expect a high-quality project. Response to the initial promotion was so great that Kapala Construction pre-sold all 180 units based solely on an artist’s conception and schematic plans of the project. One reason for the quick sellout may have been the “YOU CAN MOVE IN BY SUMMER” campaign. As part of this campaign, Kapala promised rebates of $10,000 cash to all 180 buyers if all the facilities, buildings and other amenities were not completed by June 15 of next year.

As of September 15, the project is well underway. Table 1 provides the details concerning the tasks remaining to be completed in the project. All tasks except for Activity R, the underground sewer activity, and Activity T, the stream building activity, have been assigned to the appropriate subcontractors. The company has already incurred costs in the amount of $30,000,000 (e.g., land costs, etc.). Table 2 shows the list of activities remaining with the normal cost given for each activity, the maximum amount by which any activity can be crashed, and the additional cost of crashing that activity by the amount shown.

Assume that today is Monday, September 15, and that all work is to be done on a five-day-per-week basis that includes holiday periods [i.e., assume a total of 195 days to complete project]. Refer to Table 3. As one…...

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