Question 1: Advantager University

Advantager University is a top ranked university that has experienced huge and growing demand from potential students for several years. To cope with this increased demand, several managers have been hired by the university to facilitate expansion projects. The School of Accounting is just one of the successful schools at Advantager that urgently needs to expand. To better serve students and staff, the University administration has provided the School with a choice of several under- utilised buildings on campus that would meet the School's expansion needs.

After several committee meetings, nine major expansion project activities have been identified, and the University has agreed to provide project managers to support these activities. People involved in the expansion were interviewed to gather information for the following table:

Table 1:

Activity	Immediately preceding activities	Number of Managers required*	Activity Description	Time Estimates (weeks)
				Optimistic	Likely	Pessimistic
A	-	4	Select building	1	2	3
B	A	4	Interview staff applicants	4	6	8
C	A	2	Develop remodelling plans	1	2	3
D	B	2	Select staff applicants	2	4	6
E	C	2	Finalise remodelling plans	1	2	3
F	D, E	4	Remodel	4	6	8
G	F	2	Install facilities	1	2	3
H	F	2	New staff training	1	2	3
I	G, H	2	Move in	1	2	3

* Managers are qualified to work on all activities relating to the Universitys expansion projects and can be interchanged between activities and projects.

Required:

1. Based on information in Table 1, draw a detailed network diagram for the project. Assume that the university wants to finish the project as soon as possible (there is a skeleton diagram on the next page to get you started if youre really stuck, but it would be better if you tried to work this out on your own first).

2. What is the critical path? What does it tell you, and why is it important?

3. (a) Which activities have slack? (b) Using your answer to (a), explain the concept of shared slack, and where it does/does not exist for this project.

4. (a) Advantager University has hired several managers to facilitate its expansion plans. Using the data in Table 1, show in Gantt chart format (weeks on the horizontal axis and number of managers on the vertical axis), the resource loading for this project week by week, assuming that each activity starts as soon as possible.

   (b) Show in Gantt chart format how you would use resource levelling to achieve a reduction in variability in management requirements without increasing project duration.

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(c) Explain how your answer to (b) can help Advantager University, given that it is undergoing several expansion projects simultaneously.

5. (a) Calculate the path variance of ABDFHI. (b) What is the value in calculating path variances?

6. A world-renowned Nobel Prize winning economist will be visiting the university in 20 weeks. If the project can be completed in 20 weeks, she will be able to give a speech at the opening ceremony for the building, attracting valuable news coverage of the event.

(a) Using the additional information in Table 2 below, ascertain the smallest total additional cost incurred for finishing the entire project in 20 weeks.

(b) What factors would you consider in deciding whether to crash the project? Table 2:

Activity	Normal time (weeks)	Normal cost $	Crash time (weeks)	Crash cost $
A	2	100,000	2	-
B	6	250,000	6	-
C	2	50,000	1	58,000
D	4	200,000	3	400,000
E	2	80,000	1	90,000
F	6	350,000	5	580,000
G	2	800,000	1	900,000
H	2	350,000	1	400,000
I	2	200,000	1	220,000