1. Why do smaller projects appear to be more or at least equally profitable as lager projects? By exhibit 2A the have divided the projects based on equal salary costs and overhead costs. From that graph the difference lies
by the project revenue. The net income in higher by the smaller projects.
By exhibit 2B the have divided the projects in to equal sized groups. So the total of 120 project are divided by 2, so 60 large projects and 60 small projects. There the difference lies in the projects revenue, salary costs and the overhead costs. In this graph the smaller projects are equally profitable as the larger projects.
The smaller projects appear to be more or at least equally profitable as larger projects because the gross profit are higher, the salary costs are lower than the larger projects, the smaller projects costs less time, there for your net income is higher with the small projects.
2. What are your conclusions about the relationship between project size and project profitability? (exhibit 3)
3. Should Survey Masters continue to take all project offered to the company? Why or why not? On which size of project should they focus their sales efforts? Should they refuse to take on larger or smaller projects in the future? What should be their strategy in selecting future projects to undertake with their clients?\ We think that the company should focus on the small projects. The company should take on more small projects because the net income of these projects are higher than the larger projects.