Destron Petroleum Services: Bidding for a Project
(4 pages of text)
Destron Petroleum Services (DPS) was an oil drilling contractor that had just won a bid to provide a land drilling rig on a rental basis to a major oil producing company in Pakistan. The case outlines how the company projected all of its costs related to the project and finally quoted a price for the project to the client.
This case is suitable for an introductory management accounting class at both the undergraduate and graduate levels. The case is designed to introduce students to the NPV technique and job costing method in the context of an oil service company. After working through the case and assignment questions, students will be able to do the following:
- Understand the function of each department in a service company’s value chain.
- Conduct a project appraisal using the net present value (NPV) technique.
- Understand the ethical issues involved in a bidding process.
- Apply the job costing technique.
- Identify the risks of the project.
Pakistan, Large, 2016
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