K. K Ltd knows that other companies are working on a competing product. The company estimates that the delay of every week beyond the 40^th week in bringing out the new line will cost the firm sh. 1,000,000 in lost profit..

K.K Limited manufactures security systems for homes. To enable the company offer a better quality product at a lower cost than its competitors, the company has decided to expand its present facility to accommodate a new line. A project team has been formed within the company to direct and coordinate the plant expansion. This team met weekly to monitor the status of the project. Prior to the start of the plant expansion, the management developed the following list of required activities: Activity A Prepare architectural plan B Construct building C Develop equipment Specifications D Design and construct Equipment E Install/Test equipment F Develop staffing plan G Hire staff H Train staff I Pilot production run J Market research K Complete product development L Complete package design M Complete marketing plan Required: Normal Predeces Time Costs sor in (Sh) week '000' s 10 10,000 Crash Time Cost in (Sh) week '000' s 7 12,000 A 35 50,000 33 52,000 A 4 7,000 3 6,000 C 25 20,000 25 B,D 5 5,000 4 4,500 C 2 4,000 2 4,000 F G E,H, L 4 2 1 30,000 15,000 4,000 2 1 1 30,000 25,000 4,000 - 8 12,000 4 24,000 - 12 24,000 10 20,000 J,K 4 6,000 2 2,000 J 8 10,000 6 8,000 26,000 K. K Ltd knows that other companies are working on a competing product. The company estimates that the delay of every week beyond the 40 th week in bringing out the new line will cost the firm sh. 1,000,000 in lost profit.. What will be the cost to the firm if the project is completed in 50 weeks? (3 marks) Is it advisable to crash the profits from 51 to 45 weeks? Why? (2 marks