International Operations Management
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final-questionnaires
| Exhibit 11.6 PERT/CPM Network for Example 2 A C G E D F B Once a PERT/CPM network has been drawn and the expected times of the activities have been determined, it is possible to determine the minimum completion time of the project and to schedule each activity. To identify the completion time of the project, we should look for the path with the longest completion time. That path is called the critical path through the network. Obviously, more than one critical path may exist on a network. The operations manager of the restaurant can identify three paths on his network. These paths together with their expected completion times areas follows Path 1: ACG, expected completion time = 19 weeks Path 2: ADEG, expected completion time = 20 weeks Path 3: BFG, expected completion time = 10 weeks As path 2 has the longest completion time, it is the network’s critical path. In other words, activities AD, E, and G are all critical activities—that is they cannot be delayed if the project is to be completed on time. The expected completion time of the project is 20 weeks. All the activities which are critical for the project’s on-time completion (i.e., the ones on the critical path) have a slack time of zero. The slack time that exists on the noncritical activities will determine how long each of these activities can be delayed without delaying the overall completion time of the project. (Fora good discussion of the concept of slack in project management, refer to Tormos and Lova. 23 Once the expected duration of a project has been determined, it maybe necessary or desirable to shorten its completion time. The completion time of a project can usually be shortened by allocating additional resources. However, these additional resources usually imply extra costs. ............................................................................. ............................................................................. Elsevier US Job code KIB Chapter: Ch11-H7983 6-12-2006 9:22 p.m. Page:378 Trimsize:7.25 in in Fonts used Sabon & Frutiger Margins:Top:36 pt Gutter:66 pt Font Size pt Text Width PC Depth:43 Lines 378 International Business To reduce the completion time of a project, we need to shorten a number of its activities. When we do this, however, we need to remember that. Not all the activities on the network can be shortened. The activities to be shortened must be on the critical path. The process of shortening the completion time of a project is known as project crashing. The duration figures in the above example give the normal time for each activity of the project. Each activity also has its crash time, which is the least possible time it can take to complete that activity. Similarly, the cost of an activity under normal circumstances is the activity’s normal cost and the cost of an activity under crash circumstances is its crash cost. Now consider the following example involving the expansion of a small factory. Example 3 A small American manufacturer of leather products is expanding its factory. The operations manager who is responsible for this project has identified a total often activities and has produced time and cost estimates for each of them. He has produced two different sets of estimated times and costs one for completing the project under normal circumstances and one for completing it under crash circumstances. This information is shown in the table below (activity durations are shown in weeks): Activity Normal Time Crash Time Normal Cost (Crash Cost ABC DEF G 4 3000 HI J 2 800 There is a bonus of $600 if the project duration can be reduced by one week, an extra bonus of $600 if the project duration can be reduced by a second week, and another extra bonus of $600 if the project duration can be ............................................................................. ............................................................................. Elsevier US Job code KIB Chapter: Ch11-H7983 6-12-2006 9:22 p.m. Page:379 Trimsize:7.25 in in Fonts used Sabon & Frutiger Margins:Top:36 pt Gutter:66 pt Font Size pt Text Width PC Depth:43 Lines International Operations Management 379 Download 340.14 Kb. Share with your friends:
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