Your program plans to acquire a total of 600 end items costing $535 million over a five-year period. The first production contract is to be awarded in FY04. The number of items to be procured (not delivered) each year and their estimated cost (in then-year dollars) is shown below:
FY Lot Quantity Total Lot Cost
FY04 50 $ 50 million
FY05 100 $ 95 million
FY06 150 $135 million
FY07 150 $130 million
FY08 150 $125 million
What is your question?
Assuming there is no advance procurement and that this is NOT a multiyear contract, what is the correct amount to includes in your budget request for FY04 and FY05 for this contract?
FY04 50 $50 million
FY05 100 $95 million
$145 million for FY04 and $ 0 million for FY05
$145 million for FY04 and $ 0 million for FY05
FY04 50 $50 million
FY05 100 $95 million
To find the total quantity and total cost of end items to be procured each year, you need to sum up the values for each year.
For FY04, the quantity is 50 and the total lot cost is $50 million.
For FY05, the quantity is 100 and the total lot cost is $95 million.
For FY06, the quantity is 150 and the total lot cost is $135 million.
For FY07, the quantity is 150 and the total lot cost is $130 million.
For FY08, the quantity is 150 and the total lot cost is $125 million.
To find the total quantity and total cost over the five-year period, you can add up the quantities and the total lot costs for each year.
Total quantity = 50 + 100 + 150 + 150 + 150 = 600 items
Total cost = $50 million + $95 million + $135 million + $130 million + $125 million = $535 million
Therefore, over the five-year period, a total of 600 end items will be procured at a cost of $535 million.