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Chapter8
Pert/cpmmodelsforProjectManagementReviewQuestions8.1-1 Thebidisfor$5.4millionwithapenaltyof$300,000ifthedeadlineof47weeksisnotmet.Inaddition,abonusof$150,000willbepaidiftheplantiscompletedwithin40weeks.8.1-2 Hehasdecidedtofocusonmeetingthedeadlineof47weeks.8.1-3 Animmediatepredecessorisanactivitythatmustbecompletedjustpriortostartingthegivenactivity.Giventheimmediatepredecessorsofanactivity,thisactivitythenbecomestheimmediatesuccessorofeachoftheseimmediatepredecessors.8.1-4 (1)theactivitiesoftheproject;(2)theimmediatepredecessorsoftheactivities;and(3)theestimateddurationoftheactivities8.2-1 (1)activityinformation;(2)precedencerelationships;and(3)timeinformation(duration)8.2-2 InanAOAnetwork,eachactivityisrepresentedbyanarc,whileinanAONnetwork,eachactivityisrepresentedbyanode.AONnetworksarebeingusedhere.8.2-3 ThebarsinaGanttchartshowthescheduledstartandfinishtimesforactivitiesinaproject.8.3-1 (a)Apaththroughaprojectnetworkisoneoftheroutesfollowingthearrows(arcs)fromthestartnodetothefinishnode;(b)thelengthofapathisthesumoftheestimateddurationsoftheactivitiesonthepath;(c)thelongestpathiscalledthecriticalpath.8.3-2 (1)Theactualdurationofeachactivitymustbethesameasitsestimatedduration;and(2)eachactivitymustbeginassoonasallitsimmediatepredecessorsarefinished.8.3-3 Theearlieststarttimeofanactivityisequaltothelargestoftheearliestfinishtimesofitsimmediatepredecessors.8.3-4 Aforwardpassistheprocessofstartingwiththeinitialactivitiesandworkingforwardintimetowardthefinalactivities.8.3-5 Itisalastchanceschedulebecauseanythinglaterwilldelaythecompletionoftheproject.8.3-6 Thelatestfinishtimeofanactivityisequaltothesmallestofthelateststarttimesofitsimmediatesuccessors.8.3-7 Abackwardpassstartswiththefinalactivitiesandworksbackwardintimetowardtheinitialactivitiesinsteadofstartingwiththeinitialactivities.8.3-8 Anydelayalongthecriticalpathwilldelayprojectcompletion.8.3-9 (1)Identifythelongestpaththroughtheprojectnetwork;and(2)identifytheactivitieswithzeroslack—theyareonthecriticalpath.8.4-1 Thethreeestimatesarethemostlikelyestimate,optimisticestimate,andpessimisticestimate.8.4-2 Theoptimisticandpessimisticestimatesaremeanttolieattheextremesofwhatispossible,whereasthemostlikelyestimateprovidesthehighestpointoftheprobabilitydistribution.8.4-3 Itisassumedthatthemeancriticalpathwillturnouttobethelongestpaththroughtheprojectnetwork.8.4-4 Itisassumedthatthedurationsoftheactivitiesonthemeancriticalpatharestatisticallyindependent.8.4-5 p=sumofthemeansofthedurationsfortheactivitiesonthemeancriticalpath.8.4-6 p2=sumofthevariancesofthedurationsfortheactivitiesonthemeancriticalpath.8.4-7 Itisassumedthattheformoftheprobabilitydistributionofprojectdurationisthenormaldistribution.8.4-8 Itisusuallyhigherthanthetrueprobability.8.5-1 Usingovertime,hiringadditionallabor,andusingspecialmaterialsorequipmentareallwaysofcrashinganactivity.8.5-2 Thetwokeypointsarelabelednormalandcrash.Thenormalpointshowsthetimeandcostoftheactivitywhenitisperformedinthenormalway.Thecrashpointshowsthetimeandcostwhentheactivityisfullycrashed.8.5-3 No,onlycrashingactivitiesonthecriticalpathwillreducethedurationoftheproject.8.5-4 Crashcostsperweeksavedarebeingexamined.8.5-5 Thedecisionstobemadearethestarttimeofeachactivity,thereductioninthedurationofeachactivityduetocrashing,andthefinishtimeoftheproject.8.5-6 Anactivitycannotstartuntilitsimmediatepredecessorstartsandthencompletesitsduration.8.5-7 Becauseofuncertainty,theplanforcrashingtheprojectonlyprovidesa50%chanceofactuallyfinishingwithin40weeks,sotheextracostoftheplanisnotjustified.8.6-1 PERT/Costisasystematicproceduretohelpthemanagerplan,schedule,andcontrolprojectcosts.8.6-2 Itbeginsbydevelopinganestimateofthecostofeachactivitywhenitisperformedintheplannedway.8.6-3 Acommonassumptionisthatthecostsofperforminganactivityareincurredataconstantratethroughoutitsduration.8.6-4 Aworkpackageisagroupofrelatedactivities.8.6-5 PERT/Costusesearlieststarttimeandlateststarttimeschedulesasabasisfordevelopingcostschedules.8.6-6 APERT/Costscheduleofcostsshowstheweeklyprojectcostandcumulativeprojectcostforeachtimeperiod.8.6-7 APERT/Costreportshowsthebudgetedvalueoftheworkcompletedofeachactivityandthecostoverrunstodate.8.6-8 Sincedeviationsfromtheplannedworkschedulemayoccur,aPERT/Costreportisneededtoevaluatethecostperformanceofindividualactivities.8.7-1 Planning,scheduling,dealingwithuncertainty,time-costtrade-offs,andcontrollingcostsareaddressedbyPERT/CPM.8.7-2 Computerimplementationhasallowedforapplicationtolargerprojects,fasterrevisionsinprojectplansandeffortlessupdatesandchangesinschedules.8.7-3 Theaccuracyandreliabilityofend-pointestimatesarenotasgoodforpointsthatarenotattheextremesoftheprobabilitydistribution.8.7-4 ThetechniqueofcomputersimulationtoapproximatetheprobabilitythattheprojectwillmeetitsdeadlineisanalternativeforimprovingonPERT/CPM.8.7-5 ThePrecedenceDiagrammingMethodhasbeendevelopedasanextensionofPERT/CPMtodealwithoverlappingactivities.8.7-6 PERT/CPMassumesthateachactivityhasavailablealltheresourcesneededtoperformtheactivityinanormalway.8.7-7 Itencourageseffectiveinteractionbetweentheprojectmanagerandsubordinatesthatleadstosettingmutualgoalsfortheproject.8.7-8 Newimprovementsandextensionsarestillbeingdevelopedbuthavenotbeenincorporatedmuchintopracticeyet.Problems8.1 a)
b) StartACFinish Length=4weeks
StartADEFinish Length=7weeks
StartBCFinish Length=5weeks
StartBDEFinish Length=8weeks *criticalpath c)ActivityESEFLSLFSlackCriticalPathStart00000YesA02131NoB03030YesC35683NoD35350YesE58580YesFinish88880Yes
CriticalPath: StartBDEFinish d) No,thiswillnotshortenthelengthoftheprojectbecausetheactivityisnotonthecriticalpath.8.2 a)
b) StartADFinish Length=4weeks
StartAEFinish Length=5weeks
StartAFKFinis Length=8weeks *criticalpath
StartAGHIJFinish Length=8weeks *criticalpath
StartBDFinish Length=3weeks
StartBCEFinish Length=6weeks
StartBCHIJFinish Length=8weeks *criticalpath
StartBCKFinish Length=7weeks c)ActivityESEFLSLFSlackCriticalPathStart00000YesA02020YesB01010YesC13130YesD24684NoE36582NoF24240YesG23230YesH34340YesI45450YesJ58580YesK48480YesFinish88880Yes
CriticalPaths: StartAFKFinish
StartAGHIJFinish
StartBCHIJFinish d) No,thiswillnotshortenthelengthoftheprojectbecauseAisnotonallofthecriticalpaths.8.3 a)
b,c,&d)ActivityESEFLSLFSlackCriticalPathStart00000YesA01010YesB13130YesC37370YesD36360YesE35461NoF7107100YesG6116110YesH101110110YesI111511150YesJ151715170YesK151816191NoL172017200YesM182319241NoN202420240YesFinish242424240Yes
CriticalPaths: StartABCFHIJLNFinish
StartABDGIJLNFinish8.4 a)
b) StartABJLFinish Length=75minutes *criticalpath
StartCDJLFinish Length=45minutes
StartEFJLFinish Length=72minutes
StartGHIJLFinish Length=67minutes
StartKLFinish Length=45minutes c,d&e)ActivityESEFLSLFSlackCriticalPathStart00000YesA0300300YesB303530350YesC02303230NoD25323530NoE073103NoF73210353NoG0158238NoH152523338NoI252733358NoJ354535450YesK015304530NoL457545750YesFinish757575750Yes
CriticalPath: StartABJLFinish f) Dinnerwillbedelayed3minutesbecauseofthephonecall.Ifthefoodprocessorisusedthendinnerwillnotbedelayedbecausetherewas3minutesofslackand5minutesofcuttingtimesavedandthecallonlyused6minutesofthe8total.8.5 a) StartADHMFinish Length=19weeks
StartBEJMFinish Length=20weeks *criticalpath
StartCFKNFinish Length=16weeks
StartAIMFinish Length=17weeks
StartCGLNFinish Length=20weeks *criticalpath b)ActivityESEFLSLFSlackCriticalPathStart00000YesA06171NoB03030YesC04040YesD6107111NoE3103100YesF488124NoG4104100YesH101311141NoI6119143NoJ101410140YesK81112154NoL101510150YesM142014200YesN152015200YesFinish202020200Yes
Kenwillbeabletomeethisdeadlineifnodelaysoccur. c) CriticalPaths: StartBEJMFinish
StartCGLNFinish
Focusattentiononactivitieswith0slack(thoseinthecriticalpaths). d) IfactivityItakes2extraweekstherewillbenodelaybecauseitsslackis3.IfactivityHtakes2extraweeksthentherewillbeadelayof1weekbecauseitsslackis1.IfactivityJtakes2extraweekstherewillbeadelayof2weeksbecauseithasnoslack.8.6 a)
b)ActivityESEFLSLFSlackCriticalPathStart00000YesA05050YesB01111211NoC13121411NoD597112NoE5115110YesF111411140YesFinish141414140Yes
CriticalPath: StartAEFFinish Length=14months c) 6months8.7 ActivityESEFLSLFSlackCriticalPathStart00000YesA03030YesB3113110YesC112911290YesD293929390YesE293430351NoF344435451NoG395039500YesH506750670YesI293836457NoJ445345541NoK535757614NoL536054611NoM677067700YesN606961701NoFinish707070700Yes
CriticalPath: StartABCDGHMFinish
Totalduration=70weeks8.8ActivityESEFLSLFSlackCriticalPathStart00000YesA01010YesB13130YesC39390YesD91311152NoE9109100YesF101410140YesG131815202NoH182320252NoI91211142NoJ141714170YesK172117210YesL171820213NoM232425262NoN212621260YesFinish262626260Yes
CriticalPath: StartABCEFJKNFinish
Totalduration=26weeks8.9ActivityESEFLSLFSlackCriticalPathStart00000YesA01010YesB13130YesC3103100YesD101413173NoE101310130YesF131613160YesG141817213NoH182421273NoI101511161NoJ162216220YesK222522250YesL222522250YesM242527283NoN252825280YesFinish282828280Yes
CriticalPaths: StartABCEFJKNFinish
StartABCEFJLNFinish
Totalduration=28weeks8.10 =(o+4m+p)/6=[30+(4)(36)+48]/6=37
=[(p–o)/6]2=[(48–30)/6]2=98.11 a) StartAEIFinish Length=17months
StartACFIFinish Length=17months
StartBDGJFinish Length=17months
StartBHJFinish Length=18months *criticalpath b)
ByTable8.7,P(T≤22months)isjustlessthan0.77. c) StartAEIFinish
ByTable8.7,P(T≤22months)=0.84.
StartACFIFinish
ByTable8.7,P(T≤22months)isjustlessthan0.84.
StartBDGJFinish
ByTable8.7,P(T≤
22months)isjustlessthan0.84. d) Thereissomewhatlessthana77%chancethatthedrugwillbereadyin22weeks.8.12 StartAEIFinish
StartACFIFinish
StartBDGJFinish
StartBHJFinish
Then,basedonthesespreadsheets,theanswersto(a),(b),(c),and(d)wouldbe a) StartAEIFinish Length=17.08months
StartACFIFinish Length=17.58months
StartBDGJFinish Length=17.83months
StartBHJFinish Length=18.42months *criticalpath b) P(StartBHJFinish≤22months)=0.7394 c) P(StartAEIFinish≤22)=0.8356
P(StartACFIFinish≤22)=0.8007
P(StartBDGJFinish≤22)=0.7843 d) Thereisapproximatelya73%chancethatthedrugwillbereadyin22weeks.8.13 a)
b)ActivityA40.111B20C4.830.25D30.444E3.170.25 c) StartABCFinish Length=10.83weeks *criticalpath
StartABEFinish Length=9.17weeks
StartADEFinish Length=10.17weeks d) .
Then,byAppendixA,P(T≤11weeks)=0.512,
orbyTable8.7,P(T≤11weeks)=slightlymorethan0.5. e) Itisaborderlinecall.BythePERTanalysis,thereisbarelymorethana50%chanceofmeetingthedeadline,butPERTtendstoprovideoptimisticestimates.8.14 a)ActivityA120B2316C151D279E184F64 b) StartACEFFinish Length=51days *criticalpath
StartBDFinish Length=50days c) .
ByAppendixA,P(T≤57days)=0.9772.
ByTable8.7,P(T≤
57days)=0.997. d) .
ByAppendixA,P(T≤57days)=0.9192.
ByTable8.7,P(T≤
57days)isbetween0.89and0.933. e) (0.9772)(0.9192)=0.8982.
Thisanswertellsusthattheprocedureusedinpart(c)overestimatestheprobabilityofcompletingwithin57days.8.15 a)ActivityA321.78B27.72.78C3611.1D160.444E320F53.732.1G16.74H20.32.78I347.11J17.79 b) StartACJFinish Length=85.7weeks
StartBFJFinish Length=99.1weeks *criticalpath
StartBEHFinish Length=80weeks
StartBEIFinish Length=93.7weeks
StartBDGHFinish Length=80.7weeks
StartBDGIFinish Length=94.4weeks c)
ByAppendixA,P(T≤100weeks)=0.5557.
ByTable8.7,P(T≤
100weeks)isbetween0.5and0.6. d) Higher8.16 a) False.Theoptimisticestimateisthedurationunderthemostfavorableconditions.Thereforeactivitydurationsareassumedtobenosmallerthantheoptimisticestimate.Similarly,activitydurationsareassumedtobenolargerthanthepessimisticestimate.(Pg.340) b) False.PERTalsoassumesthattheformoftheprobabilitydistributionisabetadistribution.(Pg.340) c) False.Itisassumedthatthemeancriticalpathwillturnouttobethelongestpaththroughtheprojectnetwork.(Pg.343)8.17ActivityCrashLengthofPathtoCrashCostA–CB-D1416B$5,0001415B$5,0001414C,D$4,000+$6,0001313C,D$4,000+$6,00012128.18 a) Let A=reductioninAduetocrashing
C=reductioninCduetocrashing
MinimizeCrashingCost=$5,000A+$4,000C
subjectto A≤
3months
C≤
2months
A+C≥2months
and A≥
0,C≥0.
Optimalsolution:(x1,x2)=(A,C)=(0,2)andCrashingCost=$8,000. b) Let B=reductioninBduetocrashing
D=reductioninDduetocrashing
MinimizeCrashingCost=$5,000B+$6,000D
subjectto B≤
2months
D≤
3months
B+D≥4months
and B≥
0,D≥0.
Optimalsolution:(x1,x2)=(B,D)=(2,2)andCrashingCost=$22,000. c) Let A=reductioninAduetocrashing
B=reductioninBduetocrashing
C=reductioninCduetocrashing
D=reductioninDduetocrashing
MinimizeCrashingCost=$5,000A+$5,000B+$4,000C+$6,000D
subjectto A≤
3months
B≤
2months
C≤
2months
D≤
3months
A+C≥2months
B+D≥4months
and A≥
0,B≥0,C≥0,D≥0.
Optimalsolution(A,B,C,D)=(0,2,2,2)andCrashingCost=$30,000. d)
e) Deadlineof11months:
Deadlineof13months:
8.19 a) ActivityCrashLengthofPathtoCrashCostB–D50BorD$10,00049BorD$10,00048BorD$10,00047 b) ActivityCrashLengthofPathtoCrashCostA–C–E–F51C$10,00050C$10,00049C$10,00048E$15,00047 c)
8.20 a)ActivityESEFLSLFSlackCriticalPathStart00000YesA03030YesB37481NoC38380YesD7109122NoE8128120YesFinish121212120Yes
CriticalPath: StartACEFinish
Totalduration=12weeks b)ActivityCrashLengthofPathtoCrashCostA–B–DA–B–EA–C-E101112C$1,333101111E$2,500101010D&E$4,000999B&C$4,333888
NewPlan:ActivityDurationCostA3weeks$54,000B3weeks$65,000C3weeks$68,666D2weeks$41,500E2weeks$80,000
$7,834issavedbythiscrashingschedule. c)
ExtraDirectCost=($309,167–$297,000)=$12,167
IndirectCostsSaved=4($5,000)=$20,000
NetSavings=$20,000–$12,167=7,834.8.21
8.22
8.23 a)ActivityESEFStart00A03B36C36D68E68Finish88
Totalduration=8weeks b)
c)
d)
e)ActivityBudgetedCostPercentCompletedValueCompletedActualCostToDateCostOverrunToDateA$54,000100%$54,000$65,000$11,000B$65,000100%$65,000$55,000–$10,000C$68,66633%$22,660$44,000$21,340Total$187,666$141,660$164,000$22,340
MichaelshouldconcentratehiseffortsonactivityCsinceitisnotyetcompleted.8.24 a)ActivityESEFLSLFSlackStart00000A06060B02464C6109133D6116110E101713203F112011200Finish202020200
Theearliestfinishtimefortheprojectis20weeks. b)
c)
LateststarttimescheduleEarlieststarttimeschedule d)
LateststarttimescheduleEarlieststarttimeschedule e)ActivityBudgetedCostPercentCompletedValueCompletedActualCostToDateCostOverrunToDateA$420,00050%$210,000$200,000-$10,000B$180,000100%$180,000$200,000$20,000D$360,00050%$180,000$210,000$30,000Total$960,000$570,000$610,000$40,000
TheprojectmanagershouldfocusattentiononactivityDsinceitisnotyetfinishedandisrunningoverbudget.8.25 a)
b)
LateststarttimescheduleEarlieststarttimeschedule c)
LateststarttimescheduleEarlieststarttimeschedule d)ActivityBudgetedCostPercentCompletedValueCompletedActualCostToDateCostOverrunToDateA$180,000100%$180,000$190,000$10,000B$75,000100%$75,000$70,000-$5,000C$120,000100%$120,000$150,000$30,000D$140,00040%$56,000$70,000$14,000E$175,00050%$87,500$100,000$12,500F$80,00060%$48,000$45,000-$3,000G$210,00025%$52,500$50,000-$2,500I$125,00020%$25,000$35,000$10,000Total$1,105,000$644,000$710,000$66,000
TheprojectmanagershouldinvestigateactivitiesD,EandIsincetheyarenotyetfinishedandrunningoverbudget.Cases8.1 a) Adiagramoftheprojectnetworkappearsbelow.
Todeterminetheprojectscheduleandwhichactivitiesarecritical,wecalculatetheearlystart,latestart,earlyfinish,latefinish,andslackbelow.
Theinitialpublicofferingprocessis27.5weekslong.Thecriticalpathis:
STARTABDEFJKLOPFINISH b) Weexploreeachchangeindependently.i) Negotiatingthecommitment(stepC)isperformedparalleltonegotiatingthespread(stepD).Inpart(a)above,negotiatingthespreadisonthecriticalpathsinceittakesthreedaystocompletewhilenegotiatingthecommitmenttakesonlytwodaystocomplete.Wenowincreasethetimetonegotiatethecommitmentfromtwodaystothreedays,andnegotiatingthecommitmentnowtakesasmuchtimeasnegotiatingthespread.Thus,therearenowtwocriticalpathsthroughthenetwork:
STARTABCEFJKLOPFINISH
STARTABDEFJKLOPFINISH
Theprojectdurationisstill27.5weeks.ii) Inpart(a)above,calculatingtheissuepriceisnotonthecriticalpath.Thus,decreasingthetimetocalculatethepricedoesnotchangethesolutionfoundinpart(a).Thecriticalpathremainsthesame,andtheprojectdurationisstill27.5weeks.iii) Inpart(a)above,thesteptoamendthestatementandresubmitittotheSEC(stepK)isonthecriticalpath.Therefore,increasingthetimeforthestepincreasestheprojectduration.Theprojectdurationincreasesto29weeks,andthecriticalpathremainsthesame.iv) Inpart(a)above,thesteptoconfirmthatthenewissuecomplieswith“bluesky〞laws(stepM)occursinparalleltoappointingaregistrar(stepN)andtoappointingatransferagent(stepO).StepMisnotonthecriticalpathsinceitonlytakesoneweekwhilestepOtakes3.5weeks.WhenweincreasethetimetocompletestepMfromoneweektofourweeks,wechangethecriticalpathsincestepMnowtakeslongerthanstepO.Wealsochangetheprojectduration.Theprojectdurationisnow28weeks.Twonewcriticalpathsappear:
STARTABDEFGMPFINISH
STARTABDEFJKLMPFINISH c)
Theconstraintsinthelinearprogrammingspreadsheetmodelwereasfollows:
TimeReduction≤MaxTimeReduction
ProjectFinishTime≤MaxTime
BStart≥AFinish
CStart≥BFinish
DStart≥BFinish
EStart≥CFinish
EStart≥DFinish
FStart≥EFinish
GStart≥FFinish
HStart≥FFinish
IStart≥FFinish
JStart≥FFinish
KStart≥JFinish
LStart≥KFinish
MStart≥GFinish
MStart≥HFinish
MStart≥IFinish
MStart≥LFinish
NStart≥LFinish
OStart≥LFinish
PStart≥MFinish
PStart≥
NFinish
PStart≥OFinish
QStart≥MFinish
QStart≥NFinish
QStart≥OFinish
ProjectFinishTime≥PFinish
ProjectFinishTime≥QFinish
JanetandGilbertshouldreducethetimeforstepA(evaluatingtheprestigeofeachpotentialunderwriter)by1.5weeks,thetimeforstepB(selectingasyndicateofunderwriters)by1week,thetimeforstepK(amendingstatementandresubmittingittotheSEC)by0.5weeks,thetimeforstepN(appointingaregistrar)by1.5weeks,thetimeforstepO(appointingatransferagent)bytwoweeks,andthetimeforstepP(issuingfinalprospectus)by0.5weeks.JanetandGilbertcannowmeetthenewdeadlineof22weeksatatotalcostof$260,800. d) Weusethesamemodelformulationthatwasusedinpart(c).Wechangeoneconstraint,however.Theprojectdurationnowhastobeless-than-or-equalto24weeksinsteadof22weeks.Weobtainthefollowingsolution.
JanetandGilbertshouldreducethetimeforstepA(evaluatingtheprestigeofeachpotentialunderwriter)by1.5weeks,thetimeforstepB(selectingasyndicateofunderwriters)by1week,thetimeforstepK(amendingstatementandresubmittingittotheSEC)by0.5weeks,andthetimeforstepO(appointingatransferagent)by0.5weeks.JanetandGilbertcannowmeetthenewdeadlineof24weeksatatotalcostof$236,000.8.2 a) Theprojectnetworkappearsbelow.
Todeterminetheprojectscheduleandwhichactivitiesarecritical,wecalculatetheearlystart,latestart,earlyfinish,latefinish,andslackbelow.
Brentcanstarttheinterviewsin49days.Thecriticalstepsintheprocessare:
STARTEOPQRFINISH b) Wesubstitutefirstthepessimisticandthentheoptimisticestimatesforthetimevaluesusedinthepart(a)spreadsheet.
Thespreadsheetshowingtheprojectschedulewiththepessimistictimeestimatesappearsbelow.
Undertheworst-casescenario,Brentwillrequire74daysbeforeheisreadytobegininterviewing.Thecriticalpathchangesto:
STARTBFLMOPQRFINISH
Thespreadshee
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