Answer the following regarding Reynolds Construction Company (see problem descriptionbelow):
1. a. Draw a PERT diagram of this building project. Label all nodes and indicate all activityduration times.
b. What is the criticalpath?
c. How long will it take to complete the project withoutcrashing?
d. What is the associated cost of the entireproject?
e. Revise the schedule in order to complete the project within 10weeks.
f. Indicate the new cost and critical path (orpaths).
2. Suppose Reynolds is proceeding on the 10-week cost schedule (that you determined in parts 1e and1f above). [To meet the10
-weekschedule in Part 1e, you had to crashoneormore activities. Here,you start with that schedule that you determined after you crashed
these activities – or activity.YoucanNOTgobackand‘uncrash’activities.Onceyoupaythemoneytoshortenanactivity,youcan’tgo back and
‘unshorten’it.] It becomes obvious that it will take not two but five weeks to preparethe necessary data for the request for Oakmont
approval and that this step alone will now cost$7,000. (Assume that activity C cannot be crashed down from 5 weeks for parts a, b orc.)
a. What steps would you take to keep on the 10-week schedule?
b. What would be your new critical path orpaths?
c. What would happen to projectcosts?
3. Go back to your answers to 1e and 1f. You’ve got the project expedited to 10 weeks and then,inusual fashion, the higher-ups
tell you to get it down to 6 weeks*.
a. Is it possible to expedite the project to finish it in 6 weeks? Show why or whynot.
b. If there is a penalty cost of $10,000 per week for every week the project is late beyond 6weeks, what action would youtake?
Be specific. What activities would you crash – howmany weeks would you crash them and/or for how many weeks would you incur apenalty?
Whatis the associated cost of the entire project given your actions? If you provide justgeneralizations here, you will receive
nocredit.
*ActivityC,thepreparationforapproval,willtaketwoweeksasdescribedinthecaseandcanbecrashedforthisquestion.
4. Go back to Question 1b – before you revised the schedule to complete the job in 10 weeks(meaning you’ve not crashed any
activities to finish the job in 10 weeks). What is the probability ofcompleting this building project in 9weeks?
Reynolds ConstructionCompany
In 2015, Reynolds Construction Company received a contract to construct a water purificationsystem
forthecityofOakmont.ByJanuaryof2016,workwasnearlycompleteonthemainsystem;however,itwas apparent that work on a special remote control
building would have to be finished earlier thanoriginally planned if the main system was to be completed ontime.
Mr. James Alison, field construction supervisor for Reynolds had arranged a meeting with
Mr.HenryPhillips,projectengineer,torestudythearrowdiagramoftheircriticalpathschedulefortheconstructionoftheremotecontrolbuildinginaneff
orttodeterminetheshortestpossibletimeinwhichthejobcouldbedone without spending more money thannecessary.
Reynolds uses PERT as a tool to assist in project planning and control. A list of the activitiesandpredecessors for the remote control
site are shown in Exhibit 1. The cost table, Exhibit 2, lists theactivities, their normal costs and their expected durations (te),
optimistic (min required) durations (to) andpessimistic durations
(tp).Thesequenceofconsecutiveactivitiesrequiringthelongesttimetocompletebeforetheendof
theprojectisknownasthe”criticalpath”forthatproject.Thepathisconsidered”critical”becauseanydelay in that particular sequence will delay
the completion of the entireproject.
Exhibit1
JobLabel
JobDescription ImmediatelyPrecedingJobs
A Procurematerials Start
B Preparesite Start
C Prepare request for Oakmont Engineering Departmentapproval Start
D Prefabricate building and deliver tosite A
E Obtain Oakmont Engineering Departmentapproval C
F Install connecting lines to mainsystem A
G Erect building and equipment onsite B, D,E
Exhibit2
Cost and Time Table for Remote Control BuildingProject
Activity ActivityCost
(for expected timeduration) Max PossibleTime(weeks) ExpectedTime(weeks) Min PossibleTime(weeks) crashcost/week
A $5,000 4 3 2 $5,000
B $14,000 8 6 4 $6,000
C $2,500 3 2 1 $2,500
D $10,000 7 5 3 $4,000
E $8,000 3 2 2 —
F $11,500 8 7 5 $3,000
G $10,000 6 4 2 $7,000
Total cost of completing the entire project is $61,000 – assuming no activities are crashed. Any crashcosts must be added to that
amount. Note that Activity E can NOT beexpedited.
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