Determine the optimum cost-time schedule , Cost Accounting

You have just been assigned to replace the current Project Manager for a very important project.  You were provided a WBS for the project planning that had already been conducted, and it indicated that there are 10 major sub-deliverables/activities for the project (labeled A-J).  You assemble the team that had been working on the project for the past several weeks and they provide you with the expected completion time and cost for each activity, as well as the crash time and cost for each activity depicted in the chart below.

Activity

Max Crash Time

Direct Costs

Normal

Crash

Time

Cost

Time

Cost

A

0

2

$300

N/A

N/A

B

1

4

$1,000

3

$1,500

C

1

5

$1,200

4

$1,600

D

2

4

$700

2

$1,400

E

2

5

$800

3

$1,200

F

1

2

$400

1

$600

G

0

5

$1,100

N/A

N/A

H

3

5

$1,050

2

$2,000

I

1

3

$500

2

$900

J

0

2

$300

N/A

N/A

They also provide you with the predecessors for each activity:

Activity- Immediate Predecessor

A-     None

B-      A

C-      A

D-     C

E-      C

F-      D

G-     B

H-     G & F

I-      E & F

J-      H & I

The team then tells you that while the chart above depicts all the direct costs for this project, their estimate shows that the indirect costs will be $1,000 for each week from start to finish.  Thus, if the total project duration is 12 weeks, indirect costs will be $12,000.  If the total project duration is 15 weeks, the indirect costs will be $15,000.

Just then the CEO walks in and tells you that she wants a project duration analysis on her desk within 24 hours to include the following;

1. Use the information provided by the team to build an AON diagram for the project.  Then compress one time unit per move using the least cost method, reducing the schedule until you reach the network's crash point.  For each move you need to show all work, to include identification of the activity(s) crashed, the adjusted total cost, and explanation of how you choose which activities to crash.  What is the fastest time in which the project could be completed?  How much would this cost?

2. Determine the optimum cost-time schedule for the project?  What is the lowest cost that can be achieved in completing the project?  Which activities should be crashed in order to achieve the lowest cost?  What are the dangers inherent in crashing this project so that a lowest possible cost might be achieved?

3. Write a 500 page executive summary that explains your work and provides answers for the CEO.  Ensure that all work is shown so that the CEO can see how you derived your answers.  This document must be presented professionally and demonstrate first rate analysis.  The last project manager for this project was fired!

Posted Date: 2/18/2013 1:50:37 AM | Location : United States







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