Lance Petroleum Company Lance Petroleum Company's Potomac, Pennsylvania, manufacturing complex comprises several operating units. These units process the crude oil that is pumped through and transform it into a multitude of hydrocarbon products. The units run 24 hours a day, 7 days a week, and must be shut down for maintenance on a predetermined schedule. One such unit is Distillation Unit No. 5, or DU5. Studies have shown that DU5 can operate only 3 years without major equipment breakdowns, and excessive loss of efficiency. Therefore, DU5 is shut down every 3 years for cleaning, inspection, and repairs. DU5 is the only distillation unit for crude oil in the Potomac complex, and its shutdown severely affects all other operating units. Some of the production can be compensated for by Lance refineries in other locations, but the rest must be processed and stored before the shutdown. Without proper planning, a nationwide shortage of Lance gasoline could occur. The time of DUS's shutdown is critical , and the length of time the unit is down must be kept to a minimum to limit production loss. Lance uses PERT as a planning and controlling tool to minimize shutdown time. The first phase of a shutdown is to open and clean the equipment. Inspectors can then enter the unit and examine the damage. Once damages are determined, the needed repairs can be carried out. Repair times can vary considerably, depending on what damage the inspection reveals. Based on previous inspection records, some repair work is known ahead of time. Thorough cleaning of the equipment is also known to improve the unit's operating efficiency. The attached table lists the many maintenance activities, their precedences, and their estimated completion times. Discussion Questions (Note: You must provide formulas, tables, and/or figures in your case report to show your work.) 1. Based on the data provided, determine the critical path activities, the expected completion time, and the probability that the project can be completed 7 days earlier than expected. 2. What are the probabilities that Lance finishes the maintenance project 1, 2, 3, 4, 5, or 6 days earlier ? 3. If the optimistic time is the crash time for each activity and the cost of crashing each activity is irrelevant, use Excel to crash the maintenance project so that it is completed 7 days earlier than expected. Explain which activities should be crashed and how many days they should be crashed. Activity # Precedence Activities A Circulate wash water throughout unit IB A Install blinds IC IB Open and clean vessels and columns ID B Open and clean heat exchangers; remove tube bundles IE B Open and clean furnaces IF B Open and clean mechanical equipment IG B Inspect instrumentation | C Inspect vessels and columns D Inspect heat-exchanger shells D Inspect tube bundles IE Inspect furnaces JE Retube furnaces M Inspect mechanical equipment IN F Install new pump mechanical seals G Repair instrumentation H Repair vessels and columns Q Repair heat-exchangershells IR Repair tube bundles; retube IS Repair furnaces M Repair mechanical equipment V Test and close vessels and columns V IR Install tube bundles into heat-exchanger shells W QV Test and close heat exchangers X SL Test and close furnaces IY NT Test and close mechanical equipment IZ 10 Test instrumentation JAA U, W,X,Y,Z Pull blinds BB | Purge all equipment with steam CC BB Start up unit Time Estimates (in Days) Optimistic Most Likely Pessimistic 1 2 25 1.5 2 25 2 3 4 1 2 3 1 2 4 2 2.5 3 2 4 5 1 2 3 1 1.5 2 1 1.5 2 2 25 3 15 20 30 1 1.5 2 3 5 8 3 8 15 14 21 28 1 5 10 2 5 10 5 10 20 10 15 25 4 5 8 1 2 3 1 2 2.5 1 2 3 1 2 3 2 4 6 1.5 2 2.5 1 3 5 3 5 10 P P Lance Petroleum Company Lance Petroleum Company's Potomac, Pennsylvania, manufacturing complex comprises several operating units. These units process the crude oil that is pumped through and transform it into a multitude of hydrocarbon products. The units run 24 hours a day, 7 days a week, and must be shut down for maintenance on a predetermined schedule. One such unit is Distillation Unit No. 5, or DU5. Studies have shown that DU5 can operate only 3 years without major equipment breakdowns, and excessive loss of efficiency. Therefore, DU5 is shut down every 3 years for cleaning, inspection, and repairs. DU5 is the only distillation unit for crude oil in the Potomac complex, and its shutdown severely affects all other operating units. Some of the production can be compensated for by Lance refineries in other locations, but the rest must be processed and stored before the shutdown. Without proper planning, a nationwide shortage of Lance gasoline could occur. The time of DUS's shutdown is critical , and the length of time the unit is down must be kept to a minimum to limit production loss. Lance uses PERT as a planning and controlling tool to minimize shutdown time. The first phase of a shutdown is to open and clean the equipment. Inspectors can then enter the unit and examine the damage. Once damages are determined, the needed repairs can be carried out. Repair times can vary considerably, depending on what damage the inspection reveals. Based on previous inspection records, some repair work is known ahead of time. Thorough cleaning of the equipment is also known to improve the unit's operating efficiency. The attached table lists the many maintenance activities, their precedences, and their estimated completion times. Discussion Questions (Note: You must provide formulas, tables, and/or figures in your case report to show your work.) 1. Based on the data provided, determine the critical path activities, the expected completion time, and the probability that the project can be completed 7 days earlier than expected. 2. What are the probabilities that Lance finishes the maintenance project 1, 2, 3, 4, 5, or 6 days earlier ? 3. If the optimistic time is the crash time for each activity and the cost of crashing each activity is irrelevant, use Excel to crash the maintenance project so that it is completed 7 days earlier than expected. Explain which activities should be crashed and how many days they should be crashed. Activity # Precedence Activities A Circulate wash water throughout unit IB A Install blinds IC IB Open and clean vessels and columns ID B Open and clean heat exchangers; remove tube bundles IE B Open and clean furnaces IF B Open and clean mechanical equipment IG B Inspect instrumentation | C Inspect vessels and columns D Inspect heat-exchanger shells D Inspect tube bundles IE Inspect furnaces JE Retube furnaces M Inspect mechanical equipment IN F Install new pump mechanical seals G Repair instrumentation H Repair vessels and columns Q Repair heat-exchangershells IR Repair tube bundles; retube IS Repair furnaces M Repair mechanical equipment V Test and close vessels and columns V IR Install tube bundles into heat-exchanger shells W QV Test and close heat exchangers X SL Test and close furnaces IY NT Test and close mechanical equipment IZ 10 Test instrumentation JAA U, W,X,Y,Z Pull blinds BB | Purge all equipment with steam CC BB Start up unit Time Estimates (in Days) Optimistic Most Likely Pessimistic 1 2 25 1.5 2 25 2 3 4 1 2 3 1 2 4 2 2.5 3 2 4 5 1 2 3 1 1.5 2 1 1.5 2 2 25 3 15 20 30 1 1.5 2 3 5 8 3 8 15 14 21 28 1 5 10 2 5 10 5 10 20 10 15 25 4 5 8 1 2 3 1 2 2.5 1 2 3 1 2 3 2 4 6 1.5 2 2.5 1 3 5 3 5 10 P P