Question
EXERCISES 12-1Using the information in Table 12-7 , construct a PERT network and answer each of the following questions: a.What is the expected project completion
EXERCISES
- 12-1Using the information inTable 12-7, construct a PERT network and answer each of the following questions:
- a.What is the expected project completion data?
- b.What is the scheduled start and completion date for each activity?
- c.Which activities are on the critical path?
- d.How long can noncritical path activities be delayed without jeopardizing the overall completion date for this project?
- 12-2Assess the impact of the following changes to the time estimates provided in question 12-1. Individually, what is the impact if:
- Activity
- Predecessor
- New Time Estimate
- O. Advertise for new staff
- N
- 4
- P. Interview for new staff
- O
- 6
- Q. Select new staff
- P
- 1
- Collectively, what is the impact of these changes?
- 12-3As project manager for the example included in question 12-1, what would you recommend to preserve the original project completion date if activity A was reestimated to take 8 weeks, not the original 4 weeks? Provide details.
- 12-4Develop a WBS and PERT network with no more than 20 activities for each of the following projects.
- a.Buying a car
- b.Screening 1000 school-age children for high blood pressure and reporting the results to the child's physician
Table 12-7
Project to Convert a 20-Bed Unit in a Nursing Home to Accommodate Patients with Dementia
Activity
Predecessor
Time estimate (weeks)
A
Secure state approval
-
4
B
Identify 20-bed unit to be used
A
1
C
Move existing residents
B
1
D
Clean space
C
2
E
Develop architectural plans
A
9
F
Install new heating and ventilation systems
E
4
G
Install security systems
E
2
H
Move walls; renovate
F
4
I
Identify new equipment
A
1
J
Order new equipment
I
1
K
Unpack and inspect new equipment
J
1
L
Install new equipment
D, K, H
3
M
Reassign staff
A
1
N
Identify new staffing needs
M
1
O
Advertise for new staff
N
3
P
Interview for new staff
O
2
Q
Select new hires
P
3
R
Develop care plan protocols
M
1
S
Train staff
R, Q, M, L
1
T
Modify quality assurance plans
S
2
U
Coordinate with hospital discharge planners
T
4
V
Complete internal audit
U, G
1
Note Homework assignment 12-1 thru 12-3 Math 543
13-1 thru 13-3
EXERCISES
- 13-1A representative of a reputable financial services company has approached you as manager of a four-person group of anesthesiologists with an opportunity to purchase a 10-year annuity due for each member of the group. The annuity due would pay $40,000 each year beginning 5 years from now (i.e., at time = 5). What is the most you would be willing to pay now, per each physician, for this investment? Assume an appropriate discount rate of 7%.
- 13-2The hospital's marketing and finance departments have just provided you, as chief financial officer, with pro forma income statements for your proposed sonogram center. These statements appear in the following.
- Pro forma Income Statement
- (000)
- Time
- t+ 1
- t+ 2
- t+ 3
- t+ 4
- Service Revenues (net)
- $425
- $500
- $580
- $700
- Expenses
- $400
- $450
- $525
- $600
- Depreciation Expense
- $35
- $35
- $35
- $35
- Net Income
- ($ 10)
- $15
- $20
- $65
- What is the project's IRR? Assume an initial investment of $175,000 and an appropriate discount rate of 6%. The hospital is operated as a not-for-profit facility.
- 13-3The chief operating officer (COO) of a small, not-for-profit community hospital has to make a recommendation to the board of trustees on choosing among three project options for an unrestricted gift of $250,000 that has just been received. The board has established a time horizon of 5 years on this project. The options are described in the following.
- a.Purchase a 5-year treasury note at an interest rate (annual) of 7%.
- b.Purchase the practice of a young physician (the hospital's third highest admitter). Estimates of projected cash flows for the practice (post-purchase), are:
- Probability of Cash Flow
- Time
- 60%
- 20%
- 20%
- t+ 1
- $40,000
- $20,000
- $60,000
- t+ 2
- $60,000
- $30,000
- $80,000
- t+ 3
- $75,000
- $40,000
- $100,000
- t+ 4
- $100,000
- $50,000
- $125,000
- t+ 5
- $100,000
- $50,000
- $125,000
- c.Purchase an upgraded analyzer for the laboratory. Based on forecasts of laboratory utilization, the net cash flows for this project are:
- Time
- Net Cash Flow
- t+ 1
- $75,000
- t+ 2
- $75,000
- t+ 3
- $50,000
- t+ 4
- $50,000
- t+ 5
- $50,000
- Which investment should the COO recommend and why?
- 13-4What are some of the factors that can influence the riskiness of projects (investments) in healthcare organizations?
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