PTA - Point of Total Confussion ... Please help
Submitted by rahul178 on Wed, 05/25/2011 - 10:12
This is question number 16 from oliverlehmann.com:
You are running a project for a customer based on a cost reimbursable contract with the following terms:
Target costs: | $ | 1,000,000 | ||
Fixed fee: | $ | 100,000 | ||
Benefit/cost sharing: | 80% / 20% | |||
Price ceiling: | $ | 1,200,000 |
Which is the PTA (= Point of total assumption, Break point) of the project?
Now the anser is: $1,125,000 .... HOW???
Forums:
gk
Wed, 05/25/2011 - 11:48
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PTA
PTA = [(ceiling price - target price) / Buyer profit] + target cost
=[(1200000-1100000)/0.8] + 1000000
=1125000
Note: target price = targer cost + target fee
niteshrs
Wed, 05/25/2011 - 14:17
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How is buyer profit arrived
How is buyer profit arrived at 0.8 here?
aaron
Wed, 05/25/2011 - 19:36
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.8 comes from 80% of 80/20
.8 comes from 80% of 80/20 benefit sharing ratio.
arvind_bhatt25
Tue, 06/14/2011 - 13:03
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calculation is wrong..Target
calculation is wrong..
Target price is 1,000,000, not 1,100,000. u have used both in th formula.. :)
PMPBOY
Tue, 06/14/2011 - 15:51
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arvind_bhatt25, please check again... You are wrong!
calculation is RIGHT because
Target price is 1,100,000 and not 1,000,000. [see formula Target Price = Target Cost + Fee]
sudhir_mr
Sun, 08/21/2011 - 15:29
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PTA for CR valid??
But i thought PTA is only valid for Fixed Price incentive fee contract's (As mentioned in Rita's PMP exam book Page 438). I thought PTA is not valid for CR projects.
Thanks,
Sudhir
admin
Wed, 06/15/2011 - 03:52
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I would want to highlight
I would want to highlight that this is a very good question on PTA and one should expect such questions in real exam too.
Regards
Akshay Singh
Mon, 06/27/2011 - 07:47
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Target Price = Target Cost +
Target Price = Target Cost + Fixed fee= 1000,000 + 100,000=1100,000
Celining price = 1200,000
PTA = [(ceiling price - target price) / Buyer profit] + target cost
Buyer profit is 80 % or 0.8 based on cost sharing formula.
=[(1200000-1100000)/0.8] + 1000000
=1125000
Regards
Akshay Singh
akshay@emensuslearning.com
www.emensuslearning.com
jyotig
Tue, 04/05/2016 - 07:47
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Total Price = Target Cost + Target Fee
Gabrielay
Mon, 06/10/2019 - 07:21
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