Case Problem Warehouse Expansion

R.C. Coleman distributes a variety of food products that are sold through grocery store and supermarket outlets. The company receives orders directly from the individual outlets, with a typical order requesting the delivery of several cases of anywhere from 20 to 50 different products. Under the Companys current warehouse operation, warehouse clerks dispatch order-picking personnel to fill each order and have the goods moved to the warehouse shipping area. Because of the high labor costs and relatively low productivity of hand order picking, management has decided to automate the warehouse operation by installing a computer-controlled order-picking system, along with a conveyor system for moving goods from storage to the warehouse shipping area.

R.C. Colemans director of material management has been named the project manager in charge of the automated warehouse system. After consulting with members of the engineering staff and warehouse management personnel, the director has compiled a list of activities associated with the project. The optimistic, most probable, and pessimistic times (in weeks) have also been provided for each activity.

(The diagram for this project is a little more complex than most that you have seen thus far. Consequently, you are being given immediate successors AND immediate predecessor data to help you get it exactly correct. The data for this exercise is also provided to you in the spreadsheet.)

Analysis

Perform the analysis requested. Finish the quiz in this week. It is practice to help you prepare for the test.

1. Draw a network diagram of the project. (Compare your diagram with the one provided.)

1. R.C. Colemans top management has established a required 40-week completion time for the project. What is the probability that the expected duration of the project will lead to a completion in 40 weeks? (You may want to place this answer in the spreadsheet.)

1. Suppose that management requests that activity times be shortened to provide an 80% chance of meeting the 40-week completion time. Determine how much the expected project completion time must be shortened to achieve the goal of an 80% chance of completion within 40 weeks. (You may want to place this answer in the spreadsheet.)

1. Using the expected activity durations as the normal times and the optimistic times as the minimum possible task duration times, revise the schedule for the warehouse expansion project in order to achieve the 80% chance of meeting the 40-week completion time. You may round your required duration trim time to the nearest tenth to make calculations easier. For example, if you need to trim 6.4326 weeks from the schedule, round that to 6.4 weeks. Assume the trim cost information given above. (You may want to place this answer in the spreadsheet.)

\begin{tabular}{|c|l|c|c|} \hline Activity & Description & \begin{tabular}{c} Immediate \\ Successor \end{tabular} & \begin{tabular}{c} Immediate \\ Predecessor \end{tabular} \\ \hline A & Determine equipment needs & C & None \\ \hline B & Obtain vendor proposals & C & None \\ \hline C & Select Vendor & D,E,G & A,B \\ \hline D & Order system & H,I & C \\ \hline E & Design new warehouse layout & F & C \\ \hline F & Design warehouse & H,I & E \\ \hline G & Design computer interface & H & C \\ \hline H & Interface computer & J & D,F,G \\ \hline I & Install system & K & D,F \\ \hline J & Train system operators & K & H \\ \hline K & Test system & None & I,J \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline Activity & \begin{tabular}{c} Optimistic \\ Time \end{tabular} & \begin{tabular}{c} Most Likely \\ Time \end{tabular} & \begin{tabular}{c} Pessimistic \\ Time \end{tabular} & \begin{tabular}{c} Trim \\ Cost \end{tabular} \\ \hline A & 4 & 6 & 8 & $450 \\ \hline B & 6 & 8 & 10 & $225 \\ \hline C & 2 & 4 & 6 & $600 \\ \hline D & 8 & 10 & 24 & $200 \\ \hline E & 7 & 10 & 13 & $1000 \\ \hline F & 4 & 6 & 8 & $500 \\ \hline G & 4 & 6 & 20 & $250 \\ \hline H & 4 & 6 & 8 & $700 \\ \hline I & 4 & 6 & 14 & $700 \\ \hline J & 3 & 4 & 5 & $250 \\ \hline K & 2 & 4 & 6 & $300 \\ \hline \end{tabular}