Managing Construction 3

Question 1

The cost of loss, theft, and mistakes comes out of:

Answer 1

PROFIT. PROFIT IS A FUNCTION OF REVENUE.

Question 2

To pay for losses, theft, rework, etc., we must:

Answer 2

generate a substantial amount of revenue.

Question 3

The cost of mistakes is high, up to:

Answer 3

three to five times the original cost.

Question 4

An employee loses a 1K tool. The company’s net profit is 3%. This means that:

Answer 4

the company has to earn $33,000 to break even on that loss. EMPLOYEES MUST HAVE THAT INFORMATION.

Question 5

ATTAINING AND KEEPING PROFITABILITY IS DONE BY:

Answer 5

a. CONTROL WHAT YOU CAN CONTROL
b. PERFORM THE WORK YOU ARE GOOD AT.
c. FOCUS ON TWO THINGS: FINANCING AND SCHEDULING.

Question 6

Construction is a COST SIDE BUSINESS. Most contractors cannot receive a premium of even 1% over their competitors. This means that:

Answer 6

there’s little cushion for mistakes.

Question 7

The contractor has to be excellent at MANAGING RESOURCES to compete. THE KEY COMPONENT TO BEING A SUPERIOR RESOURCE MANAGER IS:

Answer 7

INFORMATION. Whether labor productivity, cash flow, or return on working capital. Without information, he is no better than average.

Question 8

The greatest risk factor and greatest reward opportunity is:

Answer 8

LABOR.

90% of projects that have cost overruns do so because of the labor cost of the job.

Question 9

LABOR is the single greatest opportunity to make or lose money:

Answer 9

NONE OF THE OTHER COST ITEMS COMPARE. Not material buyout, subcontracting, or equipment utilization.

Question 10

Wasted labor on an average project is:

Answer 10

over 30%