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Ch3 Case study solved

Southwestern University (SWU) in Texas plans to expand its stadium capacity to support its football program, hiring coach Phil Flamm to enhance its competitive edge. The construction project, contracted to Jefferson Construction, has a tight deadline of 270 days, with penalties for delays. Key calculations include the critical path length of 260 days, a standard deviation of 17.87 days, a 71.23% probability of completing the project on time, and a crashing cost of $15,000 to reduce the timeline to 250 days.

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mauro alanis
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6 views

Ch3 Case study solved

Southwestern University (SWU) in Texas plans to expand its stadium capacity to support its football program, hiring coach Phil Flamm to enhance its competitive edge. The construction project, contracted to Jefferson Construction, has a tight deadline of 270 days, with penalties for delays. Key calculations include the critical path length of 260 days, a standard deviation of 17.87 days, a 71.23% probability of completing the project on time, and a crashing cost of $15,000 to reduce the timeline to 250 days.

Uploaded by

mauro alanis
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Ch 3 Case Study

Southwestern University (SWU), a large state college in Stephenville, Texas, 30 miles southwest of the Dallas/Fort Worth metroplex, enrolls close to 20,000
students. In a typical town-gown relationship, the school is a dominant force in the small city, with more students during fall and spring than permanent
residents.

A longtime football powerhouse, SWU is a member of the Big Eleven conference and is usually in the top 20 in college football rankings. To bolster its
chances of reaching the elusive and long-desired number-one ranking, in 2012, SWU hired the legendary Phil Flamm as its head coach.

One of Flamm's demands on joining SWU had been a new stadium. With attendance increasing, SWU administrators began to face the issue head-on.
After 6 months of study, much political arm wrestling, and some serious financial analysis, Dr. Joel Wisner, president of Southwestern University, had
reached a decision to expand the capacity at its on-campus stadium.

Adding thousands of seats, including dozens of luxury skyboxes, would not please everyone. The influential Flamm had argued the need for a first-class
stadium, one with built-in dormitory rooms for his players and a palatial office appropriate for the coach of a future NCAA champion team. But the decision
was made, and everyone, including the coach, would learn to live with it.

The job now was to get construction going immediately after the 2019 season ended. This would allow exactly 270 days until the 2020 season opening
game. The contractor, Jefferson Construction, signed his contract. Malick Jefferson looked at the tasks his engineers had outlined and looked President
Wisner in the eye. "I guarantee the team will be able to take the field on schedule next year," he said with a sense of confidence. "I sure hope so," replied
Wisner. "The contract penalty of $10,000 per day for running late is nothing compared to what Coach Flamm will do to you if our opening game with Penn
State is delayed or canceled." Jefferson, sweating slightly, did not need to respond. In football-crazy Texas, Jefferson Construction would be mud if
the 270-day target was missed.

Back in his office, Jefferson again reviewed the data (see the following table) and noted that optimistic time estimates can be used as crash times. He then
gathered his supervisors. "Folks, if we're not 75% sure we'll finish this stadium in less than 270 days, I want this project crashed! Give me the cost figures
for a target date of 250 days—also for 240 days. I want to be early, not just on time!"

Time Estimates (Days)


Activity Description Predecessor(s) Optimistic Most Likely Pessimistic Crash Cost/Day
A Bonding, insurance, tax structuring — 20 30 40 $1,500
B Foundation, concrete footings for boxes A 20 65 80 3,500
C Upgrading skybox stadium seating A 50 60 100 4,000
D Upgrading walkways, stairwells, elevators C 30 50 100 1,900
E Interior wiring, lathes B 25 30 35 9,500
F Inspection approvals E 0.1 0.1 0.1 0
G Plumbing D, F 25 30 35 2,500
H Painting G 10 20 30 2,000
I Hardware/AC/metal workings H 20 25 60 2,000
J Tile/carpet/windows H 8 10 12 6,000
K Inspection J 0.1 0.1 0.1 0
L Final detail work/cleanup I, K 20 25 60 4,500

Answer the following questions here and show your detailed work (solution) below for each part
starting next page. If you worked on a spreadsheet, copy it under each part of your solution. Once
finished, create a pdf file, and upload it on Blackboard.

Part 1: What is the length of the critical path as computed from the table?

The critical path is the longest path to get a project done. The critical path of the activities is:

A-C-D-F-G-H-I-K-L.

The length of the critical path as computed from the table is:
2

Therefore, the answer is 260 days.

Part 2: What is the standard deviation of the critical path?

The Standard deviation is now calculated by taking the square root of the project variance calculated above
to get:

Square root of 319.44 = 17.87

Part 3: What is the probability of completing the project in 270 days?

Z = (Due date – expected date of completion) / standard deviation

= (270 – 260) / 17.87


=.559

Z table gives .71226 = 71.23%


3

Part 4: What is the cost of crashing to 250 days?

Crashing the project to 250 days is 10 days less than the original 260. Therefore, crashing Activity A
costs $1500 per day. This means that the cost of crashing to 250 days would be:

= $1500 * 10
= $15,000
4

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