In the past year, a company paid US$60,000 to an external subcontractor for an ongoing project. The project manager has been asked to evaluate if the project can be delivered more cost effectively this year by using internal labor. The project manager used an optimistic term of 4 months, a pessimistic term of 6 months, and a most expected term of 5 months, and has concluded that the service can be delivered with the following resources:
✑ Two engineers (monthly salary of US$700 each)
✑ One project manager (monthly salary of US$1,600)
✑ Additional estimated monthly expenses of US$2,000
The project manager used the program evaluation and review technique (PERT) to calculate the savings if the project is delivered with in-house resources.
How much money will the project manager estimate the company can save?
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