Sharon Construction

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The following case represents a realistic situation facing construction firm that has just won a competitive contract. The realistic conditions complicating the project are described in detail, as are the alternatives offered by the staff for dealing with these complexities.

Case
The Sharon Construction Corporation

The Sharon Construction Corporation has been awarded a contract for the construction of a 20,000-seat stadium. The construction must start by February 15 and be completed within one year. A penalty clause of $15,000 per week of delay beyond February 15 of next year is written into the contract.
Jim Brown, the president of the company, called a planning meeting. In the meeting he expressed great satisfaction at obtaining the contract and revealed that the company could net as much as $300,000 on the project. He was confident that the project could be completed on time with an allowance made for the usual delays anticipated in such a large project.
Bonnie Green, the director of personnel, agreed that in a normal year only slight delays might develop due to a shortage of labor. However, she reminded the president that for such a large project, the company would have to use unionized employees and that the construction industry labor agreements were to expire on November 30. Past experience indicated a fifty-fifty chance of a strike. Jim Brown agreed that a strike might cause a problem. Unfortunately, there was no way to change the contract. He inquired about the prospective length of a strike. Bonnie figured that such a strike would last either eight weeks (70 percent chance) or possibly 12 weeks (30 percent chance). Jim was not pleased with these prospects. However, before he had a chance to discuss contingency plans he was interrupted by Jack White, the vice-president for engineering. Jack commented that a colder December that had been assumed…...

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