Your electrical subcontractor reports they cannot get the specified switchgear for 16 weeks, but the schedule allows only 8 weeks. What is the first step in material expediting?
Correct Answer
D) Verify the lead time with the manufacturer directly
The first step is to verify the actual lead time directly with the manufacturer, as subcontractors may not have current information or may be quoting conservative delivery times.
Why This Is the Correct Answer
Verifying lead time directly with the manufacturer is the first and most critical step in material expediting because subcontractors may not have the most current delivery information. Manufacturers often have updated production schedules, inventory levels, or expediting options that subcontractors aren't aware of. This verification step costs nothing but time and may reveal that the actual lead time is shorter than reported. Only after confirming the true lead time should other alternatives be explored.
Why the Other Options Are Wrong
Option B: Find an alternative supplier or equivalent product
Accepting the delay immediately without investigation is premature and poor project management practice that could result in unnecessary schedule impacts and increased costs.
Option C: Negotiate penalty clauses with the subcontractor
Negotiating penalties is a reactive approach that doesn't solve the immediate scheduling problem and should only be considered after all expediting efforts have been exhausted.
Memory Technique
Use 'VAN' - Verify lead times, Alternative sources, Negotiate solutions - always in that order for material expediting
Reference Hint
Project Management chapter, specifically sections on procurement management and material expediting procedures
More Business & Finance Questions
A general contractor purchases equipment worth $45,000 with a useful life of 9 years and no salvage value. Using straight-line depreciation, what is the annual depreciation expense?
What is the typical recommended coverage amount for general liability insurance for a small to medium-sized general contracting business?
A contractor estimates startup costs of $75,000 for equipment, $25,000 for initial inventory, $15,000 for insurance premiums, and $10,000 for working capital. They can finance 70% of the total. How much cash do they need?
When establishing professional relationships with architects and engineers, what is the most important factor for a general contractor to consider?
A partnership agreement for a construction company should address all of the following EXCEPT:
A contractor purchases a truck for $60,000. After 5 years, it has accumulated depreciation of $35,000. What is the truck's book value?
A contractor's business plan projects first-year revenue of $500,000 with a 15% net profit margin. If actual revenue is $450,000 with the same profit margin, what is the variance in net profit?
Using the Modified Accelerated Cost Recovery System (MACRS), construction equipment is typically depreciated over how many years?
A contractor is comparing financing options for equipment purchase. Option A: $80,000 cash purchase. Option B: $20,000 down, $65,000 financed at 6% for 4 years. What is the total cost of Option B?
A contractor purchases equipment using a capital lease with a present value of $120,000. How should this be recorded on the balance sheet?