Case 1: HAYGOOD BROTHERS CONSTRUCTION COMPANY

George and Harry Haygood are building contractors who specialize in the construction of private
home dwellings, storage warehouses, and small businesses (less than 20,000 sq. ft. of floor space).
Both George and Harry entered a carpenter union's apprenticeship program in the early 1990s and,
upon completion of the apprenticeship, became skilled craftsmen in 1996. Before going into
business for themselves, they worked for several local building contractors in the Detroit area.

Typically, the Haygood Brothers submit competitive bids for the construction of proposed
dwellings. Whenever their bids are accepted, various aspects of the construction (electrical wiring,
plumbing, brick laying, painting, and so forth) are subcontracted. George and Harry, however,
perform all carpentry work. In addition, they plan and schedule all construction operations,
frequently arrange interim financing, and supervise all construction activities.

The philosophy under which the Haygood Brothers have always operated can be simply
stated:''Time is money." Delays in construction increase the costs of interim financing and
postpone the initiation of their building projects. Consequently, they deal with all bottlenecks
promptly and avoid all delays whenever possible. To minimize the time consumed in a
construction project, the Haygood Brothers use PERT.

First, all construction activities and events are itemized and properly arranged (in parallel and
sequential combinations) in a network. Then time estimates for each activity are made, the
expected time for completing each activity is determined, and the critical (longest) path is
calculated. Finally, earliest times, latest times, and slack values are computed. Having made these
calculations, George and Harry can place their resources in the critical areas to minimize the time
of completing the project.

The following are the activities that constitute an upcoming project (home dwelling) of the
Haygood Brothers:

1. Arrange financing (AB).

2. Let subcontracts (BC).
3. Set and pour foundations (CD).
4. Plumbing (CE).
5. Framing (DF).
6. Roofing (FG).
7. Electrical wiring (FH).
8. Installation of windows and doors (FI).
9. Ductwork and insulation (including heating and cooling units) (FJ).
10. Sheetrock, paneling, and paper hanging (JK).
11. Installation of cabinets (KL).
12. Bricking (KM).
13. Outside trim (MN).
14. Inside trim (including fixtures) (LO).
15. Painting (OP).
16. Flooring (PQ).
The PERT diagram is shown in Figure 1, and the optimistic (a), most likely (m), and pessimistic
(b) time estimates, are shown in Table 1. Any activities in the network, but not in Table 1, are
dummy activities that consume no time.

TABLE 1
Haygood Brothers Construction Co.

DAYS No of
Predecessor
workers
ACTIVITY a m b
AB 4 5 6 0
BC 2 5 8 AB 0
CD 5 7 9 BC 17
CE 4 5 6 BC 9
DF 2 4 6 CD 14
FG 3 4 11 DF 36
FH 4 5 6 DF 6
FI 3 4 5 DF 15
FJ 5 7 9 DF 5
JK 10 11 12 CE, FJ 5
KL 4 6 8 FG. FH, FI, JK 12
KM 7 8 9 FG. FH, FI, JK 13
MN 4 5 11 KM 7
LO 5 7 9 KL 12
OP 5 6 7 LO 14
PQ 2 3 4 LO, MN 18

DISCUSSION QUESTIONS

1. What is the time length of the critical path? What is the significance of the critical path?
Chapter 14 Haygo

2. Compute the amount of time that the completion of each event can be
delayed without affecting the overall project.
Chapter 14 Haygo

3. The project was begun on August 1. What is the probability that this
project can be completed by September 30? (Note: Scheduled completion time = 60
days.)
 Case 2: SHALE OIL COMPANY

The Shale Oil Company contains several operating units that comprise its Aston, Ohio,
manufacturing complex. These units process the crude oil that is pumped through and
transform it into a multitude of hydrocarbon products. The units run 24 hours a day, seven days
a week, and must be shut down for maintenance O" a predetermined schedule. One such unit is
Distillation Unit No. 5, or DU5. Studies have shown that DU5 can operate only 31/2 years
without major equipment breakdowns and excessive loss of efficiency. Therefore, DU5 is
shutdown every 31/2 years for cleaning, inspection, and repairs.

DU5 is the only distillation unit for crude oil in the Aston complex, and its shutdown severely
affects all other operating units. Some of the production can be compensated by Shale
refineries in other locations, but the rest must be processed before the shutdown and stored.
Without proper planning, a nationwide shortage of Shale gasoline could occur. The timing of
DU5's shutdown is critical, and the length of time the unit is down must be kept to a minimum
to limit production loss. Shale uses PERT as a planning and controlling tool to minimize
shutdown time.

The first phase of a shutdown is to open and clean the equipment. Inspectors can then enter the
unit and examine the damage. Once damages are determined, the needed repairs can be carried
out. Repair times can vary considerably depending on what damage the inspection reveals.
Based on previous inspection records, some repair work is known ahead of time. Thorough
cleaning of the equipment is also necessary to improve the unit's operating efficiency. Main
problem is technician scarcity. The table on below lists the many maintenance activities, their
estimated completion times (day), numbers of technicians required for each activity and
completion date of each activity.

Preventive Maintenance of DU5

TIME ESTIMATES (IN DAYS)

ACTIVITIES Optimistic Most Pessimistic
Likely
1-2 Circulate wash water 1 2 2.5
throughout unit
2-3 Install blinds 1.5 2 2.5
3-4 Open and clean vessels 2 3 4
and columns
3-5 Open and clean heat 1 2 3
exchangers
3-6 Open and clean furnaces 1 2 4
3-7 Open and clean 2 2.5 3
mechanical equipment
3-8 Inspect instrumentation 2 4 5
4-9 Inspect vessels and 1 2 3
columns
5-10 Inspect heat exchanger 1 1.5 2
shells
5-11 Inspect tube bundles 1 1.5 2
6-12 Inspect furnaces 2 2.5 3
6-17 Retube furnaces 15 20 30
7-13 Inspect mechanical 1 1.5 2
equipment
7-18 Install new pump 3 5 8
mechanical seals
8-19 Repair instrumentation 3 8 15
9-14 Repair vessels and 14 21 28
columns
10-16 Repair heat exchanger 1 5 10
shells
11-15 Repair tube bundles; 2 5 10
retube
12-17 Repair furnaces 5 10 20
13-18 Repair mechanical 10 15 25
equipment
14-20 Test and close vessels 4 5 8
and columns
15-16 Install tube bundles 1 2 3
into heat exchanger shells
16-20 Test and close heat 1 2 2.5
exchangers
17-20 Test and close furnaces 1 2 3
18-20 Test and close 1 2 3
mechanical equipment
19-20 Test instrumentation 2 4 6
20-21 Pullblinds 1.5 2 2.5
21-22 Purge all equipment 1 3 5
with steam
22-23 Start up unit 3 5 10
 DISCUSSION QUESTIONS

1. Determine the expected shutdown time and the probability the shutdown can be completed
one week earlier.

Chapter 14 Shale

2. Determine the minimum number of technicians required to complete the

project. Find the idle time of the technicians.

Chapter 14 Shale

3. Shale Oil is considering increasing the budget to shorten the shutdown. How
do you suggest the company proceed?

Chapter 14 Haygo