Your program office has just completed analysis of the latest Contract Performan

Question

Your program office has just completed analysis of the latest Contract Performance Report on its Cost Plus Incentive Fee contract with Jefferson Manufacturing. The original target price of the contract was $319 million. After combining EAC calculations with appropriately adjusted incentive fees, the following information is available: "Best Case" Price = $305 million "Most Likely" Price = $312 million "Worst Case" Price = $321 million Which one of the following represents the best estimate of the funding requirements for the Jefferson Manufacturing contract? $319 million $312 million $305 million $321 million

Explanation / Answer

Hi,  
best indicator for fund requirement is always the most likely price i,e 312$ million.
EAC represents the best case- which is the lowest potential price of contract and hence fund requirements are based on the most likely price
Thumbs up if this was helful, otherwise let me know in comments

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