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Hamaya, a Japanese transportation company, is planning to build a new distribution centre in Kowloon district. The project manager proposed the following work breakdown structure

Hamaya, a Japanese transportation company, is planning to build a new distribution centre in Kowloon district. The project manager proposed the following work breakdown structure with precedence requirements, estimated normal and crash times, and normal and crash costs.

Activity

Immediate Predecessor

Normal Time (Weeks)

Crash Time (Weeks)

Normal Cost

Crash Cost

A

None

5

3

18,000

30,000

B

A

10

7

109,500

120,000

C

A

4

3

9,000

10,000

D

A

7

5

56,000

60,000

E

B

8

5

90,000

97,500

F

B

6

4

12,000

15,000

G

C, D

7

4

25,000

32,500

H

G

3

2

80,000

83,000

I

E, F, H

9

5

110,000

138,000

(1) From the data shown, when the project will be finished at normal cost? Assume a linear cost per week shortened, determine how to finish the project as soon as possible at the minimum cost. Show, step by step, how you arrived at your schedule. No need not to show the final project network.

(2) If Hamaya is renting a temporary warehouse for $8,100 per week now, when should this warehouse construction project be completed in order to be most economical? Why?

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