In the interest of better serving the University community, a local university had decided to expand its Athletic Centre, larger facility.

In the interest of better serving the University community, a local university had decided to expand its Athletic Centre, larger facility. The expansion will involve constructing a new building and making it operational. The project team developed the precedence relationships, activity times, and activity responsibilities shown in Table 3. For the expansion project, indirect costs have been estimated at $8,000 per month. However, after month 20, if the facility is not operational, the University will impose a penalty cost of $5,750 per month. For every month that the project is shortened – to month 20 – the contractor saves one month of penalty and indirect cost. For reduction beyond month20, the savings are only monthly indirect costs of $8,000.

Question:

5.1. Draw the Network diagram for the project. What is the slack for each activity?

5.2. What is the total project cost for the “normal” schedule? Calculate the crash cost per month for each activity.

5.3. Which activity should be crashed first to cut one month from the project’s duration; how much is added to project cost? Which activity should be the next activity to be crashed to cut a second month from the project’s duration; how much is added to project cost? Would you crash the projectto 17 months? Why?

5.4. What is the minimum-cost schedule for this project? What is the total project cost for the minimum cost schedule?

5.5. What is the difference in total project costs between the earliest completion time of the project using“normal” times (in 5.2) and the minimum-cost schedule time you derived in part (5.4)?