Question
Paige Turned recently purchased a block of land to building a new multi-million dollar manufacturing plant. The current facility (a converted chemical shed) is consistently
Paige Turned recently purchased a block of land to building a new multi-million dollar manufacturing plant. The current facility (a converted chemical shed) is consistently causing problems. The new purpose-built facility would allow Picasso to increase production and satisfy safety and environmental regulations.
A building consultant has broken the project into a number of separate tasks identified by letters. Preliminary estimates of the normal time and cost have been provided:
Task | Task description | Time (days) | Cost ($) | Crash time (days) | Per day revised costs ($) |
A | Preparation of drawings and permits | 14 | 72,500 | 10 | 10,000 |
B | Calling and letting of tenders | 68 | 166,750 | 66 | 23,000 |
C | Site preparation and excavation | 6 | 116,000 | 4 | 16,000 |
D | Pouring the foundation | 24 | 250,000 | 24 | - |
E | Framing | 40 | 145,000 | 30 | 20,000 |
F | Plumbing and electrical work | 18 | 159,500 | 12 | 22,000 |
G | Interior finished | 16 | 108,750 | 12 | 15,000 |
H | Exterior finishes | 22 | 175,000 | 22 | - |
I | Installing and commissioning new machines | 34 | 101,500 | 30 | 14,000 |
J | Finishing touches and final work through | 32 | 64,000 | 32 | - |
The building consultant has advised that the following relationship exists among these tasks:
A and B can be commenced at the same time.
C and D can both be commenced as soon as A is completed.
E cannot be commended until C and D are completed.
F can be commenced once D is completed.
G can be started once F is finished.
H cannot be commenced until E and G are completed.
I cannot start until B and E are completed.
J cannot commence until H and I are completed.
Required:
- Using an appropriate computer drawing program, draw the network diagram for the project showing the task letter on the activity paths. (3 marks)
- Identify all the possible pathways and determine the critical path. (2 marks)
- Calculate the minimum time and associate cost in which the project could be completed. (8 marks)
- The building is nearing completion, Paige Turner has written into the contract penalty provisions if the work is not finished on time. The only remaining task to complete is J and so far it is on schedule to complete in time however there is still 12 days to go, the cost has increased from $2,000 per day to $3,500 per day. The building consultant, in discussion with Paige, feels that an investigation might be worthwhile. The cost to investigate is $4,000 per day which might show if there is problem and if this the case it can be rectified by $10,000. This would lead to the cost being reduced to $2,000 for the remaining days. The probability of being able to rectify the problem is 0.7, should the consultant investigate? (7 marks)
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