PROJECT MANAGEMENT
Reynolds Construction Company
BY
2008MBA036
10
1.
F
5
A 2
D 3
B Sta
En
5
rt
2
d
G
C
2
E
2
Activity
A D G F B Total
Original no. of weeks 3 5 4 7 6
No of weeks to crash by 1 2 2 2 1 8
New weeks for each activity 2 3 2 5 5
Additional Cost
5,000 8,000 14,000 6,000 6,000 39,000
a. Total cost for the project is now $(61,000 + 39,000) = $100,000
b.
The new critical paths are AF; ADG and BG. Hence, three critical paths exist.
c.
The path that has slack is the CEG path and the slack time is one week
ADG – CEG. 7 – 6 weeks
2.
F
7
A 3
D 3
B Sta
En
6
rt
4
d
G
2
C
E
2
Activity
Original weeks
D
5
No of weeks reduced by 2
New number of week for activity D 3
Cost for the reduction 8000
In revising to complete the job within ten weeks, the new critical path will takes a total of 10 weeks. This is done by reducing activity D by 2 weeks. The reduction will cost $8000.
Cost of initial planning = $61,000 Increase in cost as a result of reducing activity D by two weeks = $8,000 Hence final cost = $(61,000 + 8,000) = $69,000. The new critical path for doing the project within ten week would be paths BG, AF and ADG
3.
F
7
A 3
D 4
B Sta
En
6
rt
3
G
C
2
d
E
5
Using the critical path diagram for remote building project from exhibit 2, the steps to keep the project on track are: Increase activity C to 5 weeks, we have to reduce activity G by one week to bring the path CEG to 10 weeks as required and reduce D by one week. Hence Activity
A B C D E F
New weeks for each activity 3 6 5 4 2 7
Cost
5,000 14,000 7,000 14,000 8,000 11,500
G Total
3
17,000 76,500
d. Total cost for the project is now $76,500
The new critical paths are AF; ADG and CEG.
e.
4.
Option A
Given the scenario from question one, it is obvious that the project could not be reduced more than 7weeks owing to the fact that the critical path has minimum possible time it could be reduced. .
F
5
A 2
D 3
B Sta
En
5
rt
2
d
G
C
2
E
2
Activity
A D G F B Total
Original no. of weeks 3 5 4 7 6
No of weeks to crash by 1 2 2 2 1 8
New weeks for each activity 2 3 2 5 5
Additional Cost
5,000 8,000 14,000 6,000 6,000 39,000
f. Total cost for the project is now $(61,000 + 39,000) = $100,000
Using total project duration of 7 weeks The total cost = 100,000 Penalty for delay = 1 week X 10,000 Total cost = 100,000 + 10,000 = 110,000 Option B
Following the revised – program schedule for remote control building project from Exhibit 4. .
F
7
A 2
D 4
B Sta
En
6
rt
3
G
C
2
E
2
Planned cost + additional cost = $61,000 + 16,000 =$77,000 Using the total number of weeks of 9 weeks for the project, Total cost at 9 weeks = $77,000 Penalty per week = $10,000 Extra week to suffer penalty = 9 – 6 = 3 week Total penalty = 3 X 10,000 = 30,000
d
Total cost = 77,000 + 30,000 = 107,000
Hence, my action is to take option B, because it has the cheapest cost ($107,000) for executing the project.
