Now, Mike would like to determine if the company should pursue the bonus opportu
ID: 446588 • Letter: N
Question
Now, Mike would like to determine if the company should pursue the bonus opportunity for this project. In cooperation with the crew leaders, he has identified the fastest each activity can be completed and the associated costs for shortening the activity durations. All of this information is in Table 2.
Table 2
Time (weeks) Cost
Activity Normal Crash Normal Crash
A 2 1 $180,000 $280,000
B 4 2 $320,000 $420,000
C 10 7 $620,000 $860,000
D 6 4 $260,000 $340,000
E 4 3 $410,000 $570,000
F 5 3 $180,000 $260,000
G 7 4 $900,000 $1,020,000
H 9 6 $200,000 $380,000
I 7 5 $210,000 $270,000
J 8 6 $430,000 $490,000
K 4 3 $160,000 $200,000
L 5 3 $250,000 $350,000
M 2 1 $100,000 $200,000
N 6 3 $330,000 $510,000
1. What is the normal project duration (i.e., without any crashing)? What is the associated total cost? What is the associated likelihood that the normal project duration time will be met? Please explain the rationale that you used in arriving at your probability estimate.
2. What is the minimum project duration? What is the associated all-crash total cost? What is the critical path associated with the all-crash scenario?
3. Which activities have been crashed without reducing the total project completion time? After accounting for activities that do not need to be crashed, what is the minimum total cost associated with the minimum project duration? What are the savings in total cost due to optimization of the crashing process? Does the critical path differ from your answer to B.2? Explain why or why not.
4. Create a visual representation of how costs are related to the crashing the project on a week-byweek
basis. Explain thoroughly.
5. Help Mike crash the project down to 40 weeks so that they receive the bonus. Which activities should be crashed? How much will it cost to get the expected completion time down to 40 weeks? Should Mike pursue the bonus? Why or why not?
Explanation / Answer
PART 1. Normal Project Duration is 79 weeks (without crashing)
Associated total cost is $ 4550,000
Activity NT CT NC CC Slope(CC-NC/NT -CT) SlopeX1000 A 2 1 180 280 100 100000 B 4 2 320 420 50 50000 C 10 7 620 860 80 80000 D 6 4 260 340 40 40000 E 4 3 410 570 160 160000 F 5 3 180 260 40 40000 G 7 4 900 1020 40 40000 H 9 6 200 380 60 60000 I 7 5 210 270 30 30000 J 8 6 430 490 30 30000 K 4 3 160 200 40 40000 L 5 3 250 350 50 50000 M 2 1 100 200 100 100000 N 6 3 330 510 60 60000 Total 79 4550 6150Related Questions
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