1)An agreement included the target price of $180,000 while the fees ware set as

Question

1)An agreement included the target price of $180,000 while the fees ware set as 20% of the actual cost. If the actual cost of the project ended up being $125,000, the total amount to be paid to the contractor should be $___

2)In human-made system, the following is categorized as a system:

a)Something that is irrelevant to the system and system designers/managers can control it.

b)Something that is irrelevant to the system and system designers/managers cannot control it.

c)Something that is relevant to the system and system designers/managers can control it.

d)Something that is relevant to the system but system designers/managers cannot control it.

Explanation / Answer

1) Actual cost= $1,25,000

Fees(20% of actual cost)= 20/100*1,25,000

= $25000

Total amount to be paid to the contractor= Target Price + Fees

= $1,80,000 + $25000

= $2,05,000

Ans 2) c) Something that is relevant to the system and system designers/managers can control it.

Human-made systems are developed for a defined purpose, objectives and use. Human-made systems are developed only after proper identification of the requirement and same is properly monitored and controlled by designers/managers. E.g. Irrigation techniques provide continuous source of water which was previously dependant on rainfall.

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