Given the case study below:

1. Develop an AON network and determine the slack time for each activity
2. Develop a schedule using week increments.

according to company policy. Marketing expects inputs at this that will have to wait for the installation of the manufacturing stage, manufacturing expects their voice to be heard, and you facilities." will have to have approvals from every unit of the company that "Then this means that I really have two phases for the is involved; all of this is reviewed by the Executive Committee. writing, that which can be completed without the manufac You should have no trouble if you do your homework, but expect turing facilities installation (q), and that which has to wait for to spend a good eight weeks to get this done." them (q').' "That certainly stretches things out," said Mike. "I expected "True. Now you realize that the last thing you have to do to take 12 weeks to develop the ingredient formula (b) and you after completing the procedures and installing the equipment know that I can't start to establish product specifications (c) until and facilities is to run a pilot test (r) which will show that you the formula is complete. That's another three weeks." have reached a satisfactory level?" "Yes, but while you are working on the product spec- "Yes. Since that must include debugging, I've estimated a ifications you can get going on the regulatory documenta- six-week period as adequate." The director of manufacturing as- tion (d). Full internal specifications are not required for that sented. Mike continued, "What I'm not sure of is whether we work, but you can't start those documents until the formula can run all the installation tasks in parallel." is complete." 'You can let the purchase orders and carry out the procure- "Yes, and I find it hard to believe that we can push through ment of process equipment (k), packaging equipment (1), and both preparation of documents and getting approval in three facilities (m) as soon as the capital equipment list is complete. weeks, but Environmental swears it can be done." The installation of each of these types of equipment and facil- Oh, it can be done in this case because of the preparatory ities can start as soon as the goods are on hand (n, o, p)." work. Of course, I won't say that this estimate of three weeks is "What do you estimate for the times to do these tasks?" as certain as our other time estimates. All we need is a change of asked Mike. The director of manufacturing estimated 18, 8, staff at the Agency and we are in trouble. But once you have both and 4 weeks for the purchasing phases for each of the subsys- the specifications and the approval, you can immediately start on tems in that order and four weeks for each of the installations. developing the production processing system (@)." Then I can regard my job as done with the delivery of the pro- "Yes, and how I wish we could get a lead on that, but the cedures and when I show my 95 percent yield," said Mike, and designers say that there is too much uncertainty and they won't the director of manufacturing agreed, but reminded Mike that move until they have both specifications and regulatory docu- none of the purchasing cycles could start until the capital equip- mentation and approval. They are offering pretty fast response; ment list had been prepared and approved (j) which he saw as a six weeks from start to finish for the processing system." three-week task. "They are a good crew, Mike. And of course, you The executive committee of D. U. Singer Hospital Prod- know that you don't have to delay on starting the packaging ucts Corporation set a starting date for the project of March 10 segment of this project. You can start developing the pack- and asked Mike to project a completion date with his submis- aging concept (e) just as soon as the product rationale has sion of the plan. The committee's request implied that whatever been developed. If my experience is any judge, it will take a date Mike came up with was acceptable, but Mike knew that he full eight weeks; you'll have to work to keep the process from would be expected to show how to shorten the time to complete running forever." the project. However, his task in making the schedule was clear; "But as soon as that is finished we can start on the design he had to establish the resource requirements and deal with of the package and its materials (f), which usually takes about calendar constraints as best as he could. six weeks. Once that is done we can start developing the pack- To this end, Mike had to get an estimate of resources, which aging system (h), which shouldn't take longer than eight weeks," he decided to do by making a list of the activities and asking concluded Mike. At this point he realized that although Docent each group involved what was their level of employee input. would have general knowledge, he needed to talk directly to the The results of this survey are shown in Exhibit 1. For example, director of manufacturing. activity a takes 8 weeks and requires 12 worker-weeks from "The first step, which follows the completion of the R&D, or an average of 1.5 workers for the entire 8-week dura- development of processing and packaging systems," said the tion of activity a. director of manufacturing, "is to do a complete study of the For the purposes of overall planning, the accounting facilities and equipment requirements (i). You won't be able to department told Mike that he could estimate a cost of $600 per get that done in less than four weeks. And that must precede week per employee. This would enable him to provide a cash the preparation of the capital equipment list (j) which should flow forecast along with his plan, which the chief accountant take about three-quarters as long. Of course, as soon as the said would be expected, something that Mike had not realized. development of both the process system and packaging system Mike knew that it was customary at D. U. Singer to provide are completed, you could start on preparing the written manu- the following as parts of a plan to be submitted to the executive facturing facilities procedures (q)." committee: "But," said Mike, "can I really finish the procedures before I have installed the manufacturing facilities (p)?" a. Statement of objectives "No, quite right. What you can do is get the first phase b. Work breakdown structure done, but the last three of the ten weeks it will take to do c. An AON networkMaterial & Packaging Pack. Other Task R&D Corp. H-P Prod. Direct Activity Force Group Eng. Manuf. Manuf. Maint. Purchasing Charges $0 a-prod. rationale 1 12 2 0 0 0 16 4 2 0 0 0 500 -dev. formula c-prod. spec. 1 6 3 1 1 0 0 d-reg. document 0 12 4 2 0 0 0 0 12 8 4 2 8 0 2 4000 -dev. pkg. concept f-design pkg 12 2 3 0 3 0 3 2000 g-dev. proces. sys. 0 18 12 12 0 0 0 h-dev. pkg. sys. 24 8 8 8 0 0 i-study facil./eqpt. req. 0 16 N 2 0 j-capital equip. list 0 0 0 0 7 40.000 k-procure proces. eqpt. 0 0 0 160,000 I-procure pkg. eqpt. 30,000 m-procure facil. 0 09 - n-install proces. eqpt. 0 2 4 0 4 1000 2 0 4 0 60 4 8000 o-install pkg. eqpt. - - 10 6000 p-install mfg. facil. 0 0 5 10 0 5000 4.q -written procedures 5 10 15 w 6 6 6 6 6 0 0 r-pilot test EXHIBIT 1 Labor Requirements (Worker-weeks). d. A determination of the critical path(s) and the duration i. A cash flow requirements graph for the project, assum- along the path ing that charges are uniformly distributed throughout e. An activity list, early-start schedule, and slack list. Assume the activity that every activity begins at its early start, regardless of resource constraints. f. A period labor requirements table for each group and the project as a whole g. A cumulative labor requirements table for each group and the project as a whole. Include line graphs to illustrate the cumulative loads h. A schedule based on the best leveling of labor requirements that could be achieved without lengthening project duration by more than 14 percent in calendar daysCase D. U. Singer Hospital Products resolved and he believed that submission of regulatory docu- mentation would be followed by rapid approval as they already Corp. Herbert F. Spirer had a letter of approval contingent on final documentation. The following case describes the evolution of a new prod- But there were also issues in packaging that had to be uct and the project devised to take it to market. As well as resolved; development of the packaging design was one of his discussing the issues of developing a work breakdown struc primary concerns at this time. Ultimately, there will have to be ture, network diagram, schedule, and resource loading dia- manufacturing procedures in accordance with corporate policies grams for each of the involved departments, the case also and standards: capital equipment selection and procurement, brings up the issues of time-cost trade-offs, cash flows, and installation of this equipment and startup. resource leveling. Mike was concerned about defining the project unambigu- D. U. Singer Hospital Products Corp. has done sufficient ously. To that end, he obtained an interview with S. L. Mander, new product development at the research and development level the group vice-president. to estimate a high likelihood of technical success for a prod- When he asked Mander where his responsibility should end, uct of assured commercial success: A long-term antiseptic. the executive turned the question back to him. Mike had been pre- Management has instructed Singer's Antiseptic Division to make pared for this and said that he would like to regard his part of the a market entry at the earliest possible time; they have requested project as done when the production process could be turned over a complete plan up to the startup of production. Marketing and to manufacturing. They agreed that according to Singer practice, other plans following startup of production are to be prepared this would be when the manufacturing operation could produce a separately after this plan has been completed. 95 percent yield of product (fully packaged) at a level of 80 per- Project responsibility is assigned to the division's cent of the full production goal of 10 million liters per year. Research and Development Group; Mike Richards, the proj- 'But I want you to remember," said Mander, "that you ect scientist who developed the product, is assigned respons must meet all current FDA, EPA, and OSHA regulations and sibility for project management. Assistance will be required you must be in compliance with our internal specification-the from other parts of the company: Packaging Task Force, R & one I've got is dated September and is RD78/965. And you know D Group; Corporate Engineering; Corporate Purchasing; that manufacturing now-quite rightly, I feel-insists on full Hospital Products Manufacturing Group; Packaged Products written manufacturing procedures." Manufacturing Group. After this discussion, Mike felt that he had enough Mike was concerned about the scope of the project. He information about this aspect to start to pin down what had to be knew from his own experience that a final formula had yet to be done to achieve these results. His first step in this effort was to developed, although such development was really a "routine" meet with P. H. Docent, the director of research. function. The remaining questions had to do with color, odor, "You are naive if you think that you can just start right in and consistency additives rather than any performance-related finalizing the formula," said Docent. "You must first develop modification. Fortunately, the major regulatory issues had been a product rationale (a). This is a formally defined process "Tasks which must be accounted for in a network plan are identified by Copyright Herbert F. Spirer. Reprinted by permission. lower-case alphabetic symbols in parentheses. Refer to Exhibit 1