Three options for pouring the concrete foundation

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A construction-site project manager has three options for pouring the concrete foundation. The day before the concrete is poured, the weather bureau forecasts a 20% chance of rain. Calculate estimated values for each option.

Option I: Pour as scheduled with no protection. There is a $ 55,000 loss if it rains since the concrete has to be removed and re-done later.

Option II: Install a large tent to cover the site for $ 5,000. There is a 4% chance that the tent collapses in heavy rain, leading to removal and rework on the concrete and loss of the tent for $ 85,000.

Option III: Delay pouring foundation by two days. There are charges for reworking the concrete mixer rental and labor which amount to $ 25,000. There is a 6% chance of rain forecast for the delayed schedule. There is a $ 55,000 loss if it rains since the concrete has to be removed and re-done later.

Reference no: EM132217677

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