INE 445 Midterm, Spring 2014

THE LEBANESE AMERICAN UNIVERSITY Project Management INE 427 - Fall 2003 MIDTERM EXAM Dr. Pierrette Zouein 1 of 6 NAME:_______________________________ SCORE:___________ This is a 75 min closed book exam. Problem 1: (25%) The P-H Microship Co. needs to undertake a major maintenance and renovation program to overhaul and modernize its facilities for wafer fabrication. The company’s president is planning the schedule for this project and has identified five major activities that will need to be performed according to the following project network. He also has gathered the following data about the normal point and crash point for each of these activities. Activity Normal Time (weeks) Crash Time (weeks) Normal Cost (x1000) Crash Cost (x1000) A 3 2 54 60 B 4 3 62 65 C 5 2 66 70 D 3 1 40 43 E 4 2 75 80 A E C B D Finish Social List – LAU Jbeil … at your service THE LEBANESE AMERICAN UNIVERSITY Project Management INE 427 - Fall 2003 MIDTERM EXAM Dr. Pierrette Zouein 2 of 6 These costs reflect the company’s direct cost for the material, equipment, and direct labor required to perform the activities. In addition, the company incurs indirect project costs such as supervision and other customary overhead costs, interest charges for capital tied up and so forth. Indirect costs run at $5000 per month. He wants to minimize the overall cost of the project. Therefore, to save some of these indirect costs, he concludes that he should shorten the project by doing some crashing to the extent that crashing cost for each additional week saved is less than $5000. a) To prepare for analyzing the effect of crashing, find the earliest times, latest times, and total float for each activity when they are done at Normal times. Identify the corresponding critical path and project duration. b) Use time-cost tradeoff analysis to determine which activities should be crashed and by how much to minimize the overall cost of project. Under this plan, what is the duration and cost of each activity? How much money is saved by doing this crashing? Social List – LAU Jbeil … at your service THE LEBANESE AMERICAN UNIVERSITY Project Management INE 427 - Fall 2003 MIDTERM EXAM Dr. Pierrette Zouein 3 of 6 Social List – LAU Jbeil … at your service THE LEBANESE AMERICAN UNIVERSITY Project Management INE 427 - Fall 2003 MIDTERM EXAM Dr. Pierrette Zouein 4 of 6 Problem 2: (20%) For the problem data presented in problem 1, use a linear programming approach to answer question b). Formulate the problem and show the steps you would use in deriving the solution that minimizes overall project costs. Social List – LAU Jbeil … at your service THE LEBANESE AMERICAN UNIVERSITY Project Management INE 427 - Fall 2003 MIDTERM EXAM Dr. Pierrette Zouein 5 of 6 Social List – LAU Jbeil … at your service THE LEBANESE AMERICAN UNIVERSITY Project Management INE 427 - Fall 2003 MIDTERM EXAM Dr. Pierrette Zouein 6 of 6 Problem 3: (25%) The president of Log Construction Company is considering placing a bid on a building project. She determined that five tasks would need to be performed to carry out the project. Using the Pert three-estimate approach, she has obtained the estimates in the table below for how long these tasks will take. Also shown are the precedence relationships for these tasks. Task Time Required Optimistic estimate Most likely estimate Pessimistic estimate Immediate Predecessors A 3 weeks 4 weeks 5 weeks _ B 2 weeks 2 weeks 2 weeks A C 3 weeks 5 weeks 6 weeks B D 1 week 3 weeks 5 weeks A E 2 weeks 3 weeks 5 weeks B, D There is a penalty of $500,000 if the project is not completed in 11 weeks. Therefore President is very interested in how likely it is that his company could finish the project in time. a) Construct the project network for this project b) Find the estimate of the mean and variance of the duration of each activity c) Find the mean and the most likely Pert critical path d) Find the approximate probability of completing the project within 11 weeks e) The president has concluded that the bid she would need to make to have a realistic chance of winning the contract would earn Log Construction a profit of about $250,000 if the project completed within 11 weeks. However because of the penalty for missing this deadline, her company would lose about $250,000 if the project takes more than 11 weeks. Therefore, she wants to place the bid only if she has at least a 50% chance of meeting the deadline. How would you advise her? Social List – LAU Jbeil … at your service THE LEBANESE AMERICAN UNIVERSITY Project Management INE 427 - Fall 2003 MIDTERM EXAM Dr. Pierrette Zouein 7 of 6 Social List – LAU Jbeil … at your service THE LEBANESE AMERICAN UNIVERSITY Project Management INE 427 - Fall 2003 MIDTERM EXAM Dr. Pierrette Zouein 8 of 6 Problem 4: (20%) For the precedence network shown below determine the missing link lags and the four floats for each activity. Identify the critical path. Also, write the equations for computing activity floats based on link lags. FF = 3 FF = 5 TF = 0 Lag = 1 A B E G K D C F H Social List – LAU Jbeil … at your service THE LEBANESE AMERICAN UNIVERSITY Project Management INE 427 - Fall 2003 MIDTERM EXAM Dr. Pierrette Zouein 9 of 6 Problem 5: (10%) The four vertical lines in the figure below indicate the early and late times for events i and j. (It is assumed that the time scale extends from left to right across the page.) Complete this figure to show early and late start and finish dates for activity (i,j). Also show graphically and in an equation form all the various floats that can occur in a network. The length of the arrow for activity (i,j) equals its duration (i.e., in drawing do not assume that it is longer or shorter than shown). Tij TEi TLi TEj TLj Social List – LAU Jbeil … at your service Social List – LAU Jbeil … at your service Social List – LAU Jbeil … at your service Social List – LAU Jbeil … at your service Social List – LAU Jbeil … at your service Social List – LAU Jbeil … at your service