In: Operations Management
The team agrees that the goal is to have a winning boat ready to leave for the competition in 45 weeks at a cost of $3.2 million.
Design of the hull, deck, mast, and accessories will initiate the boat construction. After the design is complete, the hull can be constructed, the mast ordered, sails ordered, and accessories ordered. As soon as the hull is finished, the ballast tanks can be installed. Then the deck can be built. Concurrently with the deck construction, the hull can be treated with sealant. When the deck is completed and mast, sails, and accessories received, the mast and sails can be installed concurrently with the accessories. When these installations are complete, the boat can be sea-tested.
On the parallel path, choosing the crew and relocating them on site will take 6 weeks. At the same time, housing for the crew can be secured. Once the crew arrives and is housed, the training program using the old vessel will take place. After crew arrival, crew equipment can be selected and then ordered while training is underway. When training is complete, crew maintenance on the new vessel can begin. In order for the maintenance to begin, the deck must also be complete. Once crew maintenance is complete and while the boat is being sea-tested, sailing training on the new boat can be implemented. Finally, after the boat is sea-tested and sailing training is completed, regular sea training can be implemented, weather permitting.
- Fill in correct Predecessors, Contruct AON , If it’s currently the end of week 20 and $2 million has been spent to date, calculate SPI and CPI based on the following completion information: all tasks on track as planned for week 20 except C is 50%, F is 100%, and Q is 50%.
Activity |
Predecessor |
Weeks |
Cost ($000) |
A Design |
—— |
6 |
40 |
B Build hull |
12 |
1000 |
|
C Install ballast tanks |
2 |
100 |
|
D Order mast |
8 |
100 |
|
E Order sails |
6 |
40 |
|
F Order accessories |
15 |
600 |
|
G Build deck |
5 |
200 |
|
H Coat hull |
3 |
40 |
|
I Install accessories |
6 |
300 |
|
J Install mast and sails |
2 |
40 |
|
K Sea-test boat |
5 |
60 |
|
L Sea training |
8 |
200 |
|
M Select & relocate crew |
—— |
6 |
10 |
N Secure housing |
—— |
3 |
30 |
O Select crew equipment |
2 |
10 |
|
P Order crew equipment |
5 |
30 |
|
Q Training with old boat |
15 |
40 |
|
R Crew maintenance on new boat |
10 |
100 |
|
S Sail training on new boat |
7 |
50 |
- Fill in correct Predecessors, Find SPI , Find CPI
Consider the case and build an activity list with predecessor activities based on the information from the case text. The table is shown below:
Activity ID |
Activity |
Normal Time (Week) |
Crash Slope ($) |
Predecessor |
A |
Design |
6 |
60 |
--- |
B |
Build Hull |
12 |
200 |
A |
C |
Install ballast tanks |
2 |
--- |
B |
D |
Order Mast |
8 |
40 |
A |
E |
Order sails |
6 |
--- |
A |
F |
Order accessories |
15 |
100 |
A |
G |
Build deck |
5 |
--- |
C |
H |
Coat hull |
3 |
--- |
B |
I |
Install Accessories |
6 |
100 |
D, E, F, G |
J |
Install mast and sails |
2 |
40 |
D, E, F, G |
K |
Test |
5 |
40 |
H, I, J |
L |
Sea trial |
8 |
250 |
K, S |
M |
Select crew |
6 |
10 |
--- |
N |
Secure housing |
3 |
--- |
--- |
O |
Select Crew equipment |
2 |
--- |
M, N |
P |
Order Crew equipment |
5 |
--- |
O |
Q |
Routine sail/ maintenance |
15 |
30 |
M, N |
R |
Crew maintenance training |
10 |
240 |
D,E,F,G, P, Q |
S |
Initial sail training |
7 |
150 |
R |
Now, create a activity diagram by entering the above information is MS project or create a network diagram manually. Create a network diagram based on precedence relationship as shown below:
1. Show the activities with “None” as their predecessor on the left hand side of the page.
2. Represent activities using squares with 8 cell table, write activity name, earliest duration, latest duration and other parameters inside the cells as shown in the figure below:
3. Proceed in same way to create the following activity diagram
Network diagram
Find the duration of each possible path by adding the duration of the activities to ding the longest path in the network.
ABCGIKL = 44 weeks
ABCGJKL = 40 weeks
ABCGRSL = 50 weeks
ABHKL = 34 weeks
ADIKL = 33 weeks
ADJKL = 29 weeks
ADRSL = 39 weeks
AEIKL = 31 weeks
AEJKL = 27 weeks
AERSL = 37 weeks
AFIKL = 40 weeks
AFJKL = 36 weeks
AFRSL = 46 weeks
MQRSL = 46 weeks
MOPRSL = 38 weeks
NQRSL = 43 weeks
NOPRSL = 35 weeks
The critical path in the network is ABCGRSL with duration 6+12+2+5+10+7+8 = 50 weeks. The time taken to complete the project without crashing is 50 weeks. This is more than the desired time limit of 45 weeks. This means that the project manager is required to crash the project by 5 weeks to meet the deadline.
Costs
Project’s cost consists of two component i.e. direct cost + indirect cost. Direct cost is the sum of the normal cost of the activities of the project.
Direct cost:
For current project it is $2,990,000
Indirect cost:
Cost of old vessel: Weekly rent x weeks used = $4,000 x 25 weeks = $100,000
Cost of new vessel: Weekly rent x weeks used = $6,000 x 19 weeks = $114,000
Total indirect cost = $100,000+ $114,000 = $214,000
Now reduce the 5 weeks duration of the project by crashing the lowest slope activities on critical path. Follow the following steps:
1. Locate the least slope cost activity on critical path.
2. Reduce the duration of the activity by one week and add the cost of slope to the total project cost.
3. Recalculate the duration of all paths and find the critical path(s) (longest duration path)
4. Repeat the step-1 to 3 until the duration of the critical path becomes 45 weeks.
Crash details:
1. 1-week, Activity-A, Crash Cost = $60,000
2. 1 week, Activity-A, Crash Cost = $60,000
3. 1-Week, Activity S, Crash cost = $150,000
4. 1-Week, Activity S, Crash cost = $150,000
5. 1-Week, Activity B, Crash cost = $200,000
Add all crash costs to get the total crash cost that is $620,000
The final crashed diagram is shown below:
Again calculate the indirect costs with reduced duration of activities:
Indirect cost:
Cost of old vessel: Weekly rent x weeks used = $4,000 x 22 weeks = $88,000
Cost of new vessel: Weekly rent x weeks used = $6,000 x 17 weeks = $102,000
Total indirect cost = $88,000+ $102,000 = $190,000