Applied Management Science Case: Teaneck Construction Company TEANECK CONSTRUCTION COMPANY Teaneck Teaneck is a small organization with 90% of its peso olume o!tained from contracts for municipal decided to su!mit a !id for the construction in April of a mile#long e$tension to the main sewer syste which until now has used septic septic tanks" The !idding is e$pected e$pected to !e competitie !ecause !ecause whoee will hae some adantage in o!taining a contract to !e awarded !y the town later in the year worth 'n order to su!mit the most competitie !id possi!le( the pro)ect managers of Teaneck decid alternaties of using one( two or three work shifts"
Ta!le Ta!le * shows time and cost estimates of Teaneck+s engineers" The trunk sewer e$tension is to !e *,- its length. the remaining /,- is to !e constructed in trenches" To !uild the tunnel( a pri e$caated rst( then the secondary shafts can !e drien and the tunnel can !e dug simultaneously" started at the same time as the primary shaft" shaft" Another crew of workers workers follows follows the trench workers( workers( la concrete and relling relling trenches as far as they hae !een e$caated" The e$caators e$caators lose no time as a up" A third group group would !e performing performing a similar function in the tunnel"
Teaneck+s Teaneck+s direct la!or is hired from union pools" There is a strong chance that the local 1$caators the pro)ect+s inception date which may seriously a3ect its prota!ility" prota!ility" At a meeting of the pro)ect m a consensus to use 40% pro!a!ility pro!a!ility of such a strike for planning purposes" 5ith a strike( strike( direct unchanged( since the issue inoled was not one of wages. !ut indirect costs would accrue for the d at the same daily rate as indicated in Ta!le Ta!le *" 6eneral and administratie costs are are put at 70% of th indirect costs" 8ormally( Teaneck Teaneck aims at making a prot eual to *0% of total costs" There was also a recognized need to deelop some kind of estimate to descri!e the pro!a!ility pro!a!ility of th th 5ith a great deal of misgiing( the pro)ect managers came up with the following guesses:
ACTIVITY A
Move in machinery/equipment
B
Excavate primary shaft
C
Excavate secondary shafts
D
Excavate trenches
E
Excavate tunnel
F
Backfill (trenches only)
G
Pipelaying in trenches
H
Pipelaying in tunnel
J
Pour concrete in trenches
K
Pour concrete in tunnel
L
Landscape
M
Move out
PRECEDED BY
# A A ; < C(1 6 = >(? @
Critical ath: Actiity A B */ days Actiity < B -*/ days Actiity 6 B -/ days Actiity ; B 7-/ days Actiity > B 74/ days Actiity @ B 79/ days Actiity M B 79D days
ES 9Ear0y E6 9Ear0y Start: 6(n(sh:
C 24 84 xcavate secondary shat !" #$2 #%2
S 9ate Start:
6 9ate 6(n(sh:
& $2 24 Excavate 'r()ary shat $2 ** !%
Total B 79D days START
A " $2 Move (n )ach(nery-e./(')ent $2
"
E 24 #2+ Excavate t/nne0
$2
#"*
!%
#%2
, #2+ #%+ P('e0ay(n1 (n t/nne0 *"
#%2
422
K #%+ 4#+ Po/r concrete (n t/nne0 !"
422
482 $"
3 $2 #$2 Excavate trenches #""
$2
#$2
#$2 #!2 P('e0ay(n1 (n trenches *"
#$2
#!2
5 #!2 4#2 o/r concrete (n trenche %"
#!2
4#2
482 4+2 andsca'e 482
4+2
M *
4+2 4+% Move o/t 4+2
4+%
6 4#2 482 &ac700 9trenches on0y: *"
4#2
482
Critical ath: Actiity A B days Actiity < B *& days Actiity 6 B *4* days Actiity ; B /* days Actiity > B /7* days Actiity @ B /79 days Actiity M B /&/ days
ES 9Ear0y E6 9Ear0y Start: 6(n(sh:
C $8 42 xcavate secondary shat 24 $!2 $8!
S 9ate Start:
6 9ate 6(n(sh:
& ! $8 Excavate 'r()ary shat $2 $+ #$
Total B /&/ days START
A " ! Move (n )ach(nery-e./(')ent ! " !
E $8 $%# Excavate t/nne0 $** #$ $8!
, $%# $+8 P('e0ay(n1 (n t/nne0 2* $8! 2$$
K $+8 228 Po/r concrete (n t/nne0 #" 2$$ 24$ 8
3 ! $*! Excavate trenches $*" ! $*!
$*! $8$ P('e0ay(n1 (n trenches 2* $*! $8$
5 $8$ 2$! o/r concrete (n trenches #* $8$ 2$!
6 2$! 24$ &ac700 9trenches on0y: 2* 2$! 24$
24$ 24+ andsca'e 24$
24+
M #
24+ 2*2 Move o/t 24+
2*2
Critical ath: Actiity A B days Actiity < B *& days Actiity 6 B *4* days Actiity ; B /* days Actiity > B /7* days Actiity @ B /79 days Actiity M B /&/ days
ES 9Ear0y E6 9Ear0y Start: 6(n(sh:
C $8 42 xcavate secondary shat 24 $!2 $8!
S 9ate Start:
6 9ate 6(n(sh:
& ! $8 Excavate 'r()ary shat $2 $+ #$
Total B /&/ days START
A " ! Move (n )ach(nery-e./(')ent ! " !
E $8 $%# Excavate t/nne0 $** #$ $8!
, $%# $+8 P('e0ay(n1 (n t/nne0 2* $8! 2$$
K $+8 228 Po/r concrete (n t/nne0 #" 2$$ 24$ 8
3 ! $*! Excavate trenches $*" ! $*!
$*! $8$ P('e0ay(n1 (n trenches 2* $*! $8$
5 $8$ 2$! o/r concrete (n trenches #* $8$ 2$!
24$ 24+ andsca'e 24$
24+
M #
24+ 2*2 Move o/t 24+
2*2
6 2$! 24$ &ac700 9trenches on0y: 2* 2$! 24$
Critical ath: Actiity A B 7 days Actiity < B *07 days Actiity 6 B */* days Actiity ; B *7 days Actiity > B *- days Actiity @ B *9 days Actiity M B *D* days
ES 9Ear0y E6 9Ear0y Start: 6(n(sh:
C $! 28 xcavate secondary shat $2 $$! $28
S 9ate Start:
6 9ate 6(n(sh:
& 4 $! Excavate 'r()ary shat $2 $$ 2#
Total B *D* days START
A " 4 Move (n )ach(nery-e./(')ent 4
"
E $! $2$ Excavate t/nne0
4
$"*
2#
$28
, $2$ $#! P('e0ay(n1 (n t/nne0 $*
$28
$4#
K $#! $*! Po/r concrete (n t/nne0 2"
$4#
$!# !
3 4 $"4 Excavate trenches $""
4
$"4
$"4 $2$ P('e0ay(n1 (n trenches
%$$"4
$2$
5 $2$ $4! o/r concrete (n trenches 2*
$2$
$4!
6 $4! $!# &ac700 9trenches on0y:
%$$4!
$!#
$!# $!+ andsca'e $!# $!+
M
$!+ $%$ Move o/t 2 $!+ $%$
Critical ath: Actiity A B 7 days Actiity < B *07 days Actiity 6 B */* days Actiity ; B *7 days Actiity > B *- days Actiity @ B *9 days Actiity M B *D* days
ES 9Ear0y E6 9Ear0y Start: 6(n(sh:
C $! 28 xcavate secondary shat $2 $$! $28
S 9ate Start:
6 9ate 6(n(sh:
& 4 $! Excavate 'r()ary shat $2 $$ 2#
Total B *D* days START
A " 4 Move (n )ach(nery-e./(')ent 4
"
E $! $2$ Excavate t/nne0
4
$"*
2#
$28
, $2$ $#! P('e0ay(n1 (n t/nne0 $*
$28
K $#! $*! Po/r concrete (n t/nne0
$4#
2"
$4#
$!# !
3 4 $"4 Excavate trenches $""
4
$"4
$"4 $2$ P('e0ay(n1 (n trenches
%$$"4
$2$
5 $2$ $4! o/r concrete (n trenches 2*
$2$
$4!
$!# $!+ andsca'e $!# $!+
M
$!+ $%$ Move o/t 2 $!+ $%$
6 $4! $!# &ac700 9trenches on0y:
%$$4!
$!#
One Sh(t ACTIVITY
Preceded by
Days
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T;o Sh(ts Total Days
Days
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Three Sh(ts Total Days
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Pesos
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&
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Move in machinery/equipment
B
Excavate primary shaft
+
Excavate secondary shafts
B
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B
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Backfill (trenches only)
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Total Cost
D(000 day -/"& days
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Three Sh(ts Total Days
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Move in machinery/equipment
B
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Three Sh(ts Total Days
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Total Cost
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Move in machinery/equipment
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Total Cost
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T;o Sh(ts Total Days
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Move out
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(/7D(&00
3otal ,irect +osts P0P
D(000 day 0"0 days
4ndirect +osts P0P ddtl 4ndirect +osts due to strike
-(7D9(000 # -(7D9(000
3otal 4ndirect +osts P0P eneral and dministrative cost ('$5 of the sum of ,irect and 4ndirect +osts)
Total Cost
/0 -0 70
ro!a!ilit y F$G 0"/& 0"/& 0"&0 *"00
$ E F$G
-/"&000 Mean
/(0*(000 # /(0*(000
9(000 day
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-(*7(700 */(&0(700
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*(-*(D*0
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F$#uGH/
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4(000 day
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Pro
J of Strike
D(0/0(000
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F$#uGH/ E F$G -9"0/& *"&/& /4"*/&0 4"D&000 Iariance 4"/9*& Standard
J of Strike
ro!a!ilit y F$G 0"/& 0"/& 0"&0 *"00
$ E F$G
F$#uGH/
&"00 D"&0 /0"00 -/"&000 Mean
*&"/& "/& &"/&
F$#uGH/ E F$G -9"0/& *"&/& /4"*/&0 4"D&000 Iariance 4"/9*& Standard
