Chapter 8

Appendix Exercises 2. Apply critical-chain scheduling principles to the Print Software, Inc., project presented in Chapter 6 on page 175. Revise the estimated time durations by 50 percent except round up the odd time durations (i.e., 3 becomes 4). Draw a CCPM network diagram similar to the one contained in Figure A8.3 for the Print Software project as well as a Gantt chart similar to Figure A8.4. How would these diagrams differ from the ones generated using the traditional scheduling technique? Below is the CCPM network drawn for the Printer Software project.

Next is the CCPM Gantt chart created for the Printer Software project.

Key differences between Critical Chain (CC) and CCPM schedules include: The project duration for CC is 115 while for CCPM it is 58 with a 22 project buffer. So even if all of the buffer is used, the project will be 35 days earlier than CC. The CC schedule is driven by ES while the CCPM is driven by LF. Buffers are strategically located on CCPM schedule while slack is shared across non-critical activities.

Chapter 9
Review Questions 3. Why is scheduling overtime a popular choice for getting projects back on schedule? What are the potential problems for relying on this option? Scheduling overtime is popular because if it involves salary workers and no direct costs are added to the project. Even if it involves additional costs, you avoid Brooks law and minimize additional coordination and training costs. The disadvantages are the additional time and half costs associated with hourly overtime and stress and fatigue that come with working long hours which can lead to accidents, inferior performance, and turnover. 6. Reducing the project duration increases the risk of being late. Explain. Compressing the project duration means slack (float) on noncritical activities will be reduced. When slack of noncritical activities is reduced, the chance of new critical paths occurring increases; hence, the risk of the project becoming late increases. In addition, compressing will have the following other impacts on managing the project: Reduces flexibility by using slack Can increase number of critical activities Can increase interdependencies of paths Makes resource scheduling tighter (critical) May increase costs.

Exercises 4. If the indirect costs for each duration are $1,200 for 16 weeks, $1,130 for 15 weeks, $1,000 for 14 weeks, $900 for 13 weeks, $860 for 12 weeks, $820 for 11 weeks and $790 for 10 weeks, compute the total costs for each duration. Plot these costs on a graph. What is the optimum cost-time schedule? Note: The duration for this schedule is weeks and students should be told only to crash the network one week at a time (not days).

For duration 14, B is chosen over D & E because it is the earliest task. If problems occur, you can crash D or E.

5. If the indirect costs for each duration are $300 for 27 weeks, $240 for 26 weeks, $180 for 25 weeks, $120 for 24 weeks, $60 for 23 weeks, and $50 for 22 weeks, compute the direct, indirect and total costs for each duration. What is the optimum cost-time schedule? The customer offers you $10 dollars for every week you shorten the project from your original network. Would you take it? If so for how many weeks? Note: The duration for this schedule is weeks. Students should be reminded that they crash the schedule one week at a time (not divide the week into days).

Case Whitbread World Sailboat Race This is a fairly difficult case in which students have to create a project schedule and then use the time-cost method to determine whether it is possible to meet the 45 week deadline and $3.2 million budget limit. Students also have to factor in indirect costs in the form of a hammock for the additional cost of keeping vessels in service. Whitbread Project (Costs in $000)
Activity Normal Time Normal Cost Crash Time Crash Cost Slope

A B C D E F G H I J K L M N O P Q R S

Design Build hull Install ballast tanks Order mast Order sails Order accessories Build deck Coat hull Install accessories Install mast and sails Test Sea trials Select crew Secure housing Select crew equipment Order crew equipment Routine sail/maintenance Crew maintenance Train Initial sail training Total direct cost

6 12 2 8 6 15 5 3 6 2 5 8 6 3 2 5 15 10 7

$ 40 1,000 100 100 40 600 200 40 300 40 60 200 10 30 10 30 40 100 50 $2,990

4 10 2 7 6 13 5 3 5 1 4 7 5 3 2 5 12 9 5

$ 160 1,400 100 140 40 800 200 40 400 80 100 450 20 30 10 30 130 340 350

60 200 40 100 100 40 40 250 10 30 240 150

Hammock (Indirect costs): Costs for keeping old vessel in service = $4,000/week for 25 weeks = $100,000 Cost for keeping new vessel in service for training = $6,000/week for 19 weeks = $114,000 Total hammock indirect costs = $214,000 Normal costs for 50-week plan: Normal direct costs Indirect costs (hammock) Total costs $2,990,000 214,000 $3,204,000

Compressed to 45 Weeks: Costs for keeping old vessel in service = $4,000/ week for 21 weeks = $84,000 Cost for keeping new vessel in service for training = $6,000/week for 19 weeks = $114,000 Total hammock indirect costs = $198,000 Compressed Activities: A B R 2 weeks = 60,000+60,000 = 2 weeks = 200,000+200,000 = 1 week = 240,000 = $120,000 400,000 (Reduce hammock 2 weeks) 240,000 $760,000 2,990,000 198,000 (21x4,000=84,000) + (19x6,000=114,000) $3,948,000

Normal direct costs Indirect costs (hammocks) Total costs

Upon working the problem, students should advise Bjorn that yes it is possible to complete the project in 45 weeks but that the cost is estimated to be $3.948 million. This is $748,000 more than Bjorns $3.2 million. This begs the question of priorities: Whitbread Project Priority Matrix TIME X PERFORMANCE X COST X

Constrain Enhance Accept

Students will point out that both time (45 weeks) and budget ($3.2 million) are constrained. However, based on their analysis it is impossible to meet both constraints. Given that performance (victory) is the primary goal, one should argue that Bjorn should seek additional funding and accept cost over-run. This is an important lesson. Often projects begin with similar constraints but are forced to make a trade off in the final analysis.