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Page 627.

3. What is the impact of leveling within slack on the sensitivity of the network?

4. Assume the project is resource constrained and resolve any over allocation problems by leveling outside of slack. What happens?

1. How much will the project cost? What is the most expensive activity?

2. What does the cash flow statement tell you about how costs are distributed overthe life span of the project?

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Lar03342_app2_625-641.indd Page 625 2/3/10 9:06:02 PM user-f498 APPENDIX /Users/user-f498/Desktop/03:02_evening/MHBR165:Larson:208

/Users/user-f498/Desktop/03:02_evening/MHBR165:Larson:208 TWO Computer Project

Exercises

In developing the exercises, trade-offs had to be made to enrich the learning

experience. One of the major problems students initially encounter is data and detail

overload. This reduces their ability to identify project and data problems and to

compare alternatives. Although the project found in the exercises is real, it has been

reduced and detail has been eliminated many times to concentrate on applying project

management principles and understanding linkages. In addition, other simplifying

assumptions have been made so that students and instructors can trace problems and

discuss outcomes. These assumptions detract from reality, but they keep the focus on

the objectives of the exercises and reduce student frustration with software intricacies.

Moving from these exercises to real projects is primarily one of increasing detail. The

simplifying assumptions are given below (make sure they are included in ?default,?

?preferences,? and/or ?options? sections of the software used): The POM1 Project*

Big Kola Company has been concerned that specialized fruit drinks have been

eroding their cola market. The CEO mandates that ?If you can?t beat them, join

them.? Grape juice was the first product that was successful after an advertising

blitz claiming the antitoxin benefits. Lately, competition is compressing grape

juice margins and profits. Months of additional market surveys and focus groups

have resulted in three potential high-margin drinks: cranberry, blueberry, and

pomegranate. All these choices represent antitoxins. The decision is to produce the

pomegranate drink that has many health claims. For example, the relative ability of

these juices to eliminate harmful free radicals (antitoxins) is 71 percent for pomegranate, 33 percent for blueberry, and 20 percent for cranberry (Technion Institute

of Technology). The market potential appears very attractive and should have a

higher profit margin than the other potential juice products. Another appeal for

pomegranate juice is its familiarity in the Middle East and Asia.

The Priority Matrix for the POM1 Project is:

Time

Constrain

Enhance

Accept Scope Cost

X X

X * Cliff Gray, Erik Larson, & Pinyarat Sirisomboonsuk, doctoral candidate at Rawls College of Business, Texas Tech University.

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/Users/user-f499/Desktop/Temp Work/Don't Delete Job/MHBR165:Larsen:20 626 Appendix 2 Computer Project Exercises Connor Gage, the project manager, has formed his project team and the members

have come up with the following work breakdown structure.

1.0 POM1Project

1.1 R&D product development

1.1.1 Need survey

1.1.2 Set product specs

1.1.3 Shelf life report

1.1.4 Nutrition report

1.2 Secure fruit suppliers

1.3 Initial Production

1.3.1 Equipment rehab

1.3.2 Production trials

1.3.3 Quality trials

1.3.4 Quality metrics

1.3.5 Quality training

1.4 Distribution

1.4.1 Market testing

1.4.2 Package design

1.4.3 Select distributors

1.5 Legal

1.5.1 Complete FDA certification

1.5.2 Register trademark

1.6 Prepare product launch Part 1

1. Develop the WBS outline using the software available (save your file).

2. Use this file and the information provided below to create a project

schedule.

3. The following holidays are observed: January 1, Martin Luther King Day (third

Monday in January), Memorial Day (last Monday in May), July 4th, Labor

Day (first Monday in September), Thanksgiving Day (4th Thursday in November),

December 25 and 26.

4. If a holiday falls on a Saturday then Friday will be given as an extra day off,

and if it falls on a Sunday then Monday will be given off.

5. The project team works eight-hour days, Monday through Friday.

6. The project will begin on January 3, 2012.

7. Based on this schedule, submit a memo that answers the following questions:

a. When is the project estimated to be completed? How many working days

will it take?

b. What is the critical path?

c. Which activity has the most total slack?

d. How sensitive is this network?

e. Identify two sensible milestones and explain your choice. Lar03342_app2_625-641.indd Page 627 2/3/10 9:06:03 PM user-f498

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/Users/user-f498/Desktop/03:02_evening/MHBR165:Larson:208 Appendix 2 Computer Project Exercises 627 Include the following (one page) printouts:

? A Gantt chart.

? A network diagram highlighting the critical path.

? A schedule table reporting ES, LS, EF, LF, and slack for each activity.

Hints: Change the timescale to months and weeks. The estimated duration of the

project is 135 days.

Remember: Save your files for future exercises!

The following information has been derived from the WBS. Note that the activity

number is what appears in the software with the complete WBS entered. #* Activity 3

21 Need survey

Set product specs

Shelf life report

Nutrition report

Select fruit suppliers

Equipment rehab

Production trials

Quality trials

Quality metrics

Quality training

Market testing

Package design

Select distributors

Complete FDA certification

Prepare product launch Duration

15 Predecessor(s)

None

5, 6

7, 9

5, 6

7, 15

13, 16, 17, 19FS 1 25

days, 20FS 1 15 days FS = Finish to Start lag Part 2

Remember the old saying, ?A project plan is not a schedule until resources are

committed.? This exercise illustrates this sometime subtle, but important point.

Using your files from Part 1, input resources and their costs if you have not already done so. All information is found in Tables A2.1 and A2.2.

Prepare a memo that addresses the following questions:

1. Which if any of the resources are overallocated?

2. Assume that the project is time constrained and try to resolve any overallocation

problems by leveling within slack. What happens?

3. What is the impact of leveling within slack on the sensitivity of the network?

Include a Gantt chart with the schedule table after leveling within slack.

4. Assume the project is resource constrained and resolve any overallocation

problems by leveling outside of slack. What happens? Lar03342_app2_625-641.indd Page 628

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/U 628 Appendix 2 Computer Project Exercises TABLE A2.1 TABLE A2.2

Resources Availability

and Pay Rates Activity Resources Need survey

Set product specs

Shelf life report

Nutrition report

Select fruit suppliers

Equipment rehab

Production trials

Quality trials

Quality metrics

Quality training

Market testing

Package design

Select distributors

Complete FDA certification

Prepare product launch Resource Assignments MRKT (500%)

R&D (400%), MRKT (200%)

R&D (300%)

PURCH (100%)

ENG (1,000%), PROD (2,000%)

PROD (1,500%), PURCH (100%), ENG (1,000%)

QUAL (300%), PROD (500%)

QUAL (300%), PROD (100%)

QUAL (300%), PROD (1,500%)

MRKT (500%)

DESIGN (300%), MRKT (100%)

MRKT (500%)

LEGAL (300%)

QUAL (300%), PURCH (200%), PROD (1,500%),

MRKT (500%), ENG (500%), R&D (100%) Resource Abbrev Available Hourly rate Marketing staff

R&D

Engineering

Purchasing

Quality engineers

Designers

Legal staff

Production MRKT

R&D

ENG

PURCH

QUAL

DESIGN

LEGAL

PROD 5

20 $ 80/hr

$ 80/hr

$100/hr

$ 60/hr

$ 80/hr

$ 60/hr

$120/hr

$ 60/hr Include a Gantt chart with the schedule table after leveling outside of slack.

Note: No splitting of activities is allowed.

Note: No partial assignments (i.e., 50 percent). All resources must be assigned

100 percent. Part 3

Top management has accepted the July 19th completion schedule created at the

end of Part 2. Prepare a brief memo that addresses the following questions:

1. How much will the project cost? What is the most expensive activity?

2. What does the cash flow statement tell you about how costs are distributed over

the life span of the project?

Include a monthly cash flow for the project.

Once you are confident that you have the final schedule, save the file as a baseline. Hint: Save a backup file just in case without baseline! Lar03342_app2_625-641.indd Page 629 2/3/10 9:06:03 PM user-f498

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/Users/user-f498/Desktop/03:02_evening/MHBR165:Larson:208 Appendix 2 Computer Project Exercises 629 TABLE A2.3

Status Report

March 31, 2012 Activity

Need survey

Set product specs

Shelf life report

Nutrition report

Equipment rehab Actual Start Actual Finish Actual Duration Remaining Duration 1/3/12

2/3/12

2/29/12

3/14/12

2/29/12 2/2/12

2/28/12

3/13/12

3/19/12 22

23 0

12 Part 4 A

Assume that today is March 31, 2012, and Table A2.3 contains the tracking information for the project up till now. Enter this information into your saved baseline

file and prepare a status report for the first three months of the POM1 project.

Your status report should also address the following questions:

1. How is the project progressing in terms of cost and schedule?

2. What activities have gone well? What activities have not gone well?

3. What do the PCIB and PCIC indicate in terms of how much of the project has

been accomplished to date?

4. What is the forecasted cost at completion (EACf)? What is the predicted VACf ?

5. Report and interpret the TCPI for the project at this point in time.

6. What is the estimated date of completion?

7. How well is the project doing in terms of its priorities?

Try to present the above information in a form worthy of consideration by top

management.

Include an Earned Value table and a Tracking Gantt Chart.

Note: Insert March 31, 2012, as the status date in the Project Information box. Part 4 B

Assume that today is May 31, 2012, and Table A2.4 contains the tracking information for the project up till now. Enter this information into your saved baseline

file and prepare a status report for the POM1 project.

Your status report should address the following questions:

1. How is the project progressing in terms of cost and schedule?

2. What activities have gone well? What activities have not gone well?

3. What do the PCIB and PCIC indicate in terms of how much of the project has

been accomplished to date?

4. What is the forecasted cost at completion (EACf)? What is the predicted VACf ?

5. Report and interpret the TCPI for the project at this point in time.

6. What is the estimated date of completion?

7. How well is the project doing in terms of its priorities?

Try to present the above information in a form worthy of consideration by top

management.

Include an Earned Value table and a Tracking Gantt Chart.

Note: Insert May 31, 2012, as the status date in the Project Information box. Lar03342_app2_625-641.indd Page 630

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/U 630 Appendix 2 Computer Project Exercises TABLE A2.4

Status Report

May 31, 2012 Activity Actual Start Need survey

Set product specs

Shelf life report

Nutrition report

Select fruit suppliers

Equipment rehab

Production trials

Quality trials

Market testing

Package design

Select distributors

Complete FDA

certification Actual Finish Actual Duration Remaining Duration 1/3/12

2/3/12

2/29/12

3/14/12

4/3/12

2/29/12

4/17/12

5/7/12

4/4/12

5/10/12

5/28/12 2/2/12

2/28/12

3/13/12

3/19/12

4/30/12

4/11/12

5/4/12

5/31/12

5/9/12

5/25/12 22

4 0

18 5/11/12 5/31/12 14 0 Blue Zuma Project

The ARC Company specializes in developing and selling a wide range of high-quality

scooters. Sales representatives report that there is a growing demand for racing

scooters. ARC?s president, Robin Lane, is excited about the possibilities and predicts

that one day these kinds of razor scooters will be featured in X-Game events. ARC is

a small company and uses a strong matrix to optimally utilize limited manpower.

The Project Priority Matrix for the Blue Zuma Project is: Time

Constrain

Enhance

Accept Scope Cost X

X Part 1

You are a member of a project team assigned to develop the new razor scooter

code named ?Blue Zuma.? Table A2.5 contains the information necessary to create a project schedule. For the purpose of this case assume the following:

1. The project begins January 2, 2008.

2. The following holidays are observed: January 1, Memorial Day (last Monday

in May), July 4th, Labor Day (first Monday in September), Thanksgiving Day

(4th Thursday in November), December 25 and 26.

3. If a holiday falls on a Saturday, then Friday will be given as an extra day off,

and if it falls on a Sunday, then Monday will be given as a day off.

4. The project team works eight-hour days, Monday through Friday.

Construct a network schedule for this project and prepare a memo that answers

the following questions:

1. When is the project estimated to be completed? How long will the project take?

2. What is the critical path for the project? Lar03342_app2_625-641.indd Page 631

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/U Appendix 2 Computer Project Exercises 631 TABLE A2.5 Blue Zuma Project

ID Task Name Duration Predecessors 1

3 Product development project

Market analysis

Product design 25 days

40 days 2 4

5 Manufacturing study

Product design selection 20 days

10 days 2

3,4 6

8 Detailed marketing plan

Manufacturing process

Detailed product design 15 days

30 days

50 days 5

5 9

10 Test prototype

Finalized product design 10 days

25 days 8

7,9 11

13 Order components

Order production equipment

Install production equipment 7 days

14 days

35 days 14 Celebrate 10

11F-S 1 20 days,

12F-S 1 40 days

6,13 1 day 3.

6. Resources

Marketing (4)

Marketing (1) Design (4)

Development (2) Industrial (1)

Purchasing (1)

Industrial (4) Development (2)

Marketing (2) Design (3)

Development (2) Industrial (2)

Purchasing (.25)

Marketing (4)

Design (1) Development (2) Industrial (4)

Marketing (2) Design (4)

Development (2) Industrial (2) Purchasing (.25)

Design (3) Development (2)

Marketing (2) Design (3)

Development (3) Industrial (2)

Purchasing (1)

Development (3) Industrial (4) Design (1)

Development (4) Industrial (4)

Design (4) Marketing (4) Purchasing (1) Which activity has the greatest amount of slack?

How sensitive is this network?

Identify two sensible milestones and explain your choices.

Compare the advantages/disadvantages of displaying the schedule as a network

versus a Gantt chart. Include the following printouts:

? A Gantt chart.

? A network diagram highlighting the critical path.

? A schedule table reporting ES, LS, EF, LF, and slack for each activity. Part 2

The following personnel have been assigned to the Blue Zuma project team:

? 4 marketing specialists

4 design engineers

4 development engineers

4 industrial engineers

1 purchasing agent Use the file from Part 1 and the information contained in Tables A2.5 and A2.6 to

assign resources to the project schedule. Lar03342_app2_625-641.indd Page 632

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/U 632 Appendix 2 Computer Project Exercises TABLE A2.6

Blue Zuma Project

Resources Resource

Marketing specialist

Design engineer

Development engineer

Industrial engineer

Purchasing agent $/hour Number Available $60

$90

$80

$70

$50 4

1 Part A

Prepare a memo that addresses the following questions:

1. Which if any of the resources are overallocated?

2. Which activities involve overallocated resources?

3. Assume that the project is time constrained and try to resolve any overallocation problems by leveling within slack. What happens?

4. What is the impact of leveling within slack on the sensitivity of the network?

Include a Gantt chart with the schedule table after leveling within slack. Part B

Prepare a memo that addresses the following questions:

1. Assume that the project is resource constrained and no additional personnel

are available. How long will the project take given the resources assigned? (Hint:

Undo leveling performed in Part A before answering this question.)

Note: No splitting of activities is allowed.

2. How does the new duration compare with the estimated completion date generated from Part 1? What does this tell you about the impact resources can have

on a schedule?

Include a Gantt chart with a schedule table depicting the resource-constrained

schedule. Part 3

Top management is not happy with the resource-constrained schedule generated

at the end of Part 2. Robin Lane, the president, has promised retailers that production of the new scooters would start on February 1, 2009.

1. What options are available to meet this new deadline if the project is not resource constrained?

2. What options are available to meet this deadline if the project is resource

constrained?

Dewey Martin, director of product development, has managed to make the following personnel available to work on specific activities on the project. Since

there is an acute shortage of personnel at ARC he requests that you only use additional manpower that will help meet the new deadline. Your objective is to develop a schedule which will satisfy the deadline with minimum additional resource

usage. The available personnel and impact on activity duration are presented in

Table A2.7. Lar03342_app2_625-641.indd Page 633

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/U Appendix 2 Computer Project Exercises 633 TABLE A2.7

Blue Zuma Project

Crashing Options Activity Additional Resources Revised Duration Estimates Detailed marketing plan

Detailed product design

Install production equipment Marketing (2)

Design (1) Development (1)

Industrial (1) Development (1) 10 days

42 days

27 days Pay rates for additional personnel: Marketing, $70/hour; Design, $100/hour; Development, $90/hour; and Industrial, $80/hour. Prepare a memo that addresses the following questions:

1. Which additional personnel assignments would you choose to complete the

project before the February 1st deadline? Explain your choices as well as the

reasons for not choosing other options.

2. How have these changes affected the sensitivity of the network?

Include a Gantt chart with a schedule table presenting the new schedule.

Note: You cannot go back and relevel resources. These new resources are only

available for the stated specific tasks according to the schedule created at the end

of Part 2. Part 4

Robin Lane and top management have approved the schedule generated at the

end of Part 3. Save the file containing this schedule as a baseline schedule.

Prepare a memo that addresses the following questions:

4. How much is the project estimated to cost?

What activity is estimated to cost the most to complete?

What resource commands the greatest total cost?

During which month of the project are the highest and lowest costs expected to

occur? What are those costs?

5. What likely costs are not contained in this budget?

Include a table containing the estimated costs for each activity and a cash flow

schedule for each month of the project. Part 5

Today?s date is August 16, 2008. Table A2.8 summarizes the information regarding activities accomplished to date.

Robin Lane has requested a written status report for the Blue Zuma project.

1. Your status report should include a table containing the PV, EV, AC, BAC,

EAC, SV, CV, and CPI for each activity and the whole project. The report

should also address the following questions:

TABLE A2.8

Blue Zuma Project

Update Activity

Market analysis

Product design

Manufacturing study

Product design selection

Manufacturing process

Detailed product design

Test prototype Start Date Finish Date Actual Duration 1/2/08

2/4/08

3/21/08

4/23/08

8/1/08

5/14/08

8/1/08 2/1/08

3/20/08

4/22/08

5/13/08 23

11 7/31/08

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/U 634 Appendix 2 Computer Project Exercises a. How is the project progressing in terms of cost and schedule?

b. What activities have gone well? What activities have not gone well?

c. What do the PCIB and PCIC indicate in terms of how much of the project

has been accomplished to date?

d. What is the forecasted cost at completion (EACf)? What is the predicted VACf ?

e. Report and interpret the TCPI for the project at this point in time.

f. What is the estimated date of completion?

g. How well is the project doing in terms of its priorities?

Try to present the above information in a form worthy of consideration by top

management.

Include a tracking Gantt chart with your report.

Note: Enter August 15 as the status report date since you are preparing your report on the 16th.

2. While preparing your report you receive a phone call from Jim Keltner, a fellow

project manager. He is calling to see if one of the industrial engineers assigned

to your project would be available to work on his project from August 22 to 27,

2008. What would you tell him? Part 6

Robin Lane has authorized using Management Reserves to expedite the shipping

of components at an additional cost of $50,000. She has asked you to update

completion and cost estimates for the Blue Zuma project. Table A2.9 presents the

revised estimates generated by the Blue Zuma project team.

Based on this new information prepare a memo that answers the following

questions:

1. When will the project be completed? How does this compare with the baseline

completion date?

2. What is the new estimated cost at completion (EAC)? What is the new VAC?

How does this compare with VAC based on the EACf generated in Part 5?

Which of the two VACs would you have the greatest confidence in and why?

3. How do you think Robin will react given the priorities for this project?

Include a tracking Gantt with a cost table for the estimated completion schedule.

TABLE A2.9

Blue Zuma Project

Revised Estimates to

Completion Activity

Market analysis

Product design

Manufacturing study

Product design selection

Detailed marketing plan

Manufacturing process

Detailed product design

Test prototype

Finalized product design

Order components

Order production equipment *

Install production equipment

Celebrate

* Add $50,000 expediting costs. Start Date Finish Date Actual Duration 1/2/08

2/4/08

3/21/08

4/23/08

10/28/08

8/1/08

5/14/08

8/1/08

9/19/08

10/31/08

10/17/08

12/9/08

1/23/09 2/1/08

3/20/08

4/22/08

5/13/08

11/24/08

9/18/06

7/31/08

8/15/08

10/16/08

11/6/08

11/3/08

1/22/09

1/23/09 23

1 Lar03342_app2_625-641.indd Page 635

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/U Appendix 2 Computer Project Exercises 635 Conveyor Belt Project

Part 1

Project Description

The new computer-controlled conveyor belt is an exciting project that moves and

positions items on the conveyor belt within ,1 millimeter. The project will produce a new system for future installations, and for replacement of those in the

field, at a low cost. The computer-controlled conveyor belt has the potential to be

a critical unit in 30 percent of the systems installed in factories. The new system is

also easier to update with future technologies.

The Project Priority Matrix for the Conveyor Belt Project (CBP) is:

Time

Constrain

Enhance

Accept Scope Cost X

X Table A2.10 has been developed for you to use in completing the project exercises. Assignment

Develop the WBS outline using the software available to you.

Question

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