Service Management 7th Edition by James Fitzsimmons, Mona Fitzsimmons

Exercise 13

A construction firm has been commissioned to renew a portion of the Alaska crude-oil pipeline that has fallen into a state of disrepair. The project activities with the estimated times and their relationships are shown below:

a. Prepare a project network.
b. List the critical path activities and the expected project duration.
c. Determine the scheduling times and total slack for all activities.
d. In the contract, a bonus of $100,000 per day will be paid for each day the project is completed earlier than its expected duration. Evaluate the following alternatives to shorten the project duration and then make a recommendation:
1. Crash activity B by 4 days at a cost of $100,000.
2. Crash activity G by 1 day at a cost of $50,000.
3. Crash activity O by 2 days at a cost of $150,000.
4. Crash activity O by 2 days by drawing resources from activity N, thereby extending the time of N by 2 days.