Wild Cat Petroleum Company has struck oil on their latest drilling project in central Africa. You are responsible for developing a minimum cost schedule to bring the first wellhead into production. Unfortunately, local workers are not available due to the continuing unrest in the surrounding territory (a lingering civil war). Therefore, you must rely on crews of expatriate workers to complete your project. The project should not generate any interference from the warring parties because all sides to the conflict favor the development of this oil field. However, your insurance carrier has insisted that you hire a security detail (at a cost of $1000 per day) while your workers are on site.
The project can commence with three simultaneous activities:
A concrete slab must be poured at the wellhead location. The project supervisor estimates that this task would take 11 days with a standard crew. However, it can be reduced to as few as 9 days by renting a small bulldozer at a cost of $300 per day.
The pumping unit must be ordered. This requires that the specifications for the unit be drafted and faxed to the supplier. This normally takes one day and cannot be substantially reduced.
The field-clearing crew can begin cutting a swath through the jungle for the pipeline and electrical service. The swath must run a distance of four miles from the wellhead to the loading station. Judging from the distance and density of the forest, this task should take 8 days to complete. However, with a little luck and by hiring a special stump-pulling crew for $600 per day, it can be reduced to as little as 6 days.
After pouring the slab, it will take two days to set and cure the cement. Because weather conditions do not vary during this time of year in central Africa, it is unlikely that this activity will be delayed (or shortened).
The supplier can deliver the pumping unit to the wellhead location from their warehouse in South Africa within 9 days of receiving the specifications. The supplier can make special delivery arrangements to shorten delivery time, but it will cost $250 for each day the order is expedited. The minimum delivery time is 5 days.
Once the slab cures and the pumping unit delivered, a crew must mount the unit on the slab. This normally takes 5 days. However, you can save one day if the crew rents a special crane to hoist the unit into place. The crane costs $165 per day to rent.
When the swath is cut through the jungle, an electric crew can run the electrical service from the loading station to the well location. At the same time, another crew can run the pipeline. The electric line should take 6 days to complete. Running the pipeline should take 11 days. Either of these tasks (electric line or pipeline) may be shortened by one day for an additional expense of $450 (if both are shortened it costs $900).
When the pipeline is complete, it must be connected to the installed pumping unit. This requires one day and cannot be reduced.
After the pipeline is connected to the pumping unit, the electrical service must be connected. This takes one day and cannot be reduced.
1. Identify and state the duration for each activity. Label each activity with letters.
In a table format state the following: label (letter), activity description, predecessor, normal duration, minimum duration, and crash cost/day.
NOTE: some of the activities may not be crashed. Hence, their normal duration and minimum duration may be the same.
2. Prepare the network diagram of the project schedule using Excel
3. Before any crashing takes place, state all paths through the network and their associated duration. State the normal completion time (before crashing) of the project.
4. Before any crashing takes place, calculate the earliest start time (ES) , earliest finish time (EF), latest start time (LS), latest finish time (LF) for each activity.
5. Before any crashing takes place, determine the slack time for each path.
6. Crash the network to determine the minimum cost completion time for the project. (Note: use the $1000 per day cost). Report the activities that should be expedited to crash the project. Also give the order in which the activities should be crashed and the associated cost for each activity.
Please note the costs associated with crashing in this system are the crash cost per day. The crash costs do not have to be paid over the entire length of the activity, but rather only for the days that are being crashed.© BrainMass Inc. brainmass.com October 25, 2018, 12:30 am ad1c9bdddf
Project Management: PERT Network Diagram
The information presented in Table 1 represents the optimistic activity time (a), most probable activity time (m), and pessimistic activity time (b) in weeks for each activity associated with the project.
See attached file for table 1.
1. What is the expected activity time (t) in weeks for each activity? Enter this information in the appropriate data field provided for each activity in PERT Network Diagram 2 below for use later in this assignment.
PERT Network Diagram 2
2. What is the variance for the expected activity time for each activity? Enter this information in Table 2 below for use later in this assignment.
Check attached file for Table 2
3. What is the expected total activity time in weeks for each of the five separate paths through the network?
4. What is the critical path for the network and associated overall project completion time in weeks?
5. What is the project variance and standard deviation (i.e., the variance and standard deviation for the critical path)?
6. What is the probability of the critical path activities being completed in less than or equal to 20 weeks?
7. What is the Earliest Start, Earliest Finish, Latest Start and Latest Finish times for each activity? Record this information in Table 3 below for use later in this assignment.
See attached file for table 3.
8. What is the slack time in weeks for each activity? Record this information in Table 3 also.
The information presented in Table 4 represents the total budgeted cost for each activity associated with the project. See attached file for table 4
9. What is the difference in total project cashflow through week seven based upon using the Earliest Start Date for each activity and using the Latest Start Date for each activity?
Table 5 represents the percentage of completion and actual cost of work performed data for each activity associated with the project at a certain point in time during the project.
See attached file for table 5.
10. Which activity evidences the single largest activity difference (regardless of whether it is a cost overrun or cost underrun) at this particular point in time?
11. Does the overall activity difference for the project at this particular point in time represent a cost overrun or cost underrun for the project?
Table 6 represents the estimated crash time in weeks and associated total crash cost for each activity. See attached file for table 6.
12. If you crash the network in order to reduce the expected project duration to 20 weeks, while minimizing the overall crash cost, which activities on the critical path would be the most logical choices for crashing and why?
13. What is the minimum total crash cost associated with crashing the network to reduce the expected project duration to 20 weeks?
14. After successfully crashing the network to reduce the expected project duration to 20 weeks, which path through the crashed network would constitute the critical path?View Full Posting Details