April 1999
QT211: QUANTITATIVE ANALYSIS FOR MANAGEMENT

QUESTION 4

Total Marks: 20 Marks

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SAMPLE STUDENT'S SOLUTIONS
for Question 4

 
The information given below relates to a construction project for which your company is about to sign a contract. Seven activities are necessary and the normal duration, normal cost, crash duration and crash cost have been derived from the best available sources. Each activity may be reduced to the crash duration in weekly stages at a pro-rated cost. This project incurs a fixed cost of $500 per week.
 
Activity Immediate Predecessors Normal Time Crash Time Normal Cost Crash Cost
A - 15 12 4500 5250
B - 19 14 4000 4500
C - 9 5 2500 4500
D A 6 5 1700 1940
E A 14 9 4300 5350
F B,D 9 6 2600 3440
G C 8 3 1800 3400

 
(a) Draw the network diagram for the above project using the normal times for the activities involved.

 

 [5]
(b) What are the critical path activities for the project? What is the expected project completion duration and cost?

 

 [4]
(c) Assume that the company wishes to complete the project in 26 weeks.
(i) Write down the time each path would take without crashing. [3]
(ii) Copy and complete the following table: [3]
 
Activity Possible Saving (weeks) Additional Cost ($) Additional Cost per Week
A      
B      
C      
D      
E      
F      
G      

 
(iii) Use the table to justify what crashing decisions you would recommend in order to meet the completion duration at the least possible cost.
Show your working clearly.		 [5]