operation management

OM 305

Dr. Robert Aboolian

Assignment # 1

Problem 1: (5 points) A company is planning on expanding and building a new plant in one of three countries in Middle or Eastern Europe. The general manager, Patricia Donegal, has decided to base her decision on six critical success factors: technology availability and support, availability and quality of public education, legal and regulatory aspects, social and cultural aspects, economic factors, and political stability. Using a rating system of 1 (least desirable) to 5 (most desirable) she has arrived at the following ratings.

Critical Success Factor Turkey Serbia Slovakia

Technology availability and support 4 3 4

Availability and quality of public education 4 4 3

Legal and regulatory aspects 2 4 5

Social and cultural aspects 5 3 4

Economic factors 4 3 3

Political stability 3 3 4

Assume that Patricia decides to use the following weights for the critical success factors:

Technology availability and support 0.3 Availability and quality of public education 0.2 Legal and regulatory aspects 0.1 Social and cultural aspects 0.1 Economic factors 0.1 Political stability 0.2

In which country should the plant be built?

Problem 2: (5 points) The following table gives the map coordinates and the shipping loads for a set of cities that we wish to connect though a central “hub.” Near what map coordinates should the hub be located?

City Map Coordinate (x,y) Shipping Load

A (5,10) 5 B (6,8) 10 C (4,9) 15 D (9,5) 5 E (7,9) 15 F (3,2) 10 G (2,6) 5

Problem 3: (15 points) Bay Community Hospital has decided to introduce a new diagnostic procedure in the clinic. This procedure required the acquisition,

installation, and introduction of a new medical instrument. Dr. Ed Windsor was

assigned the responsibility for assuring that the introduction is performed as

quickly and as smoothly as possible. Dr. Windsor created a list of activities that would have to be completed before the

new service could begin. The activities are listed in the table below.

Activity Description

Duration

(weeks)

Immediate

Predecessors

A. Write Instructions 2 ---

B. Select Operators 5 ---

C. Train Operators 4 A, B

D. Announce new service 5 B

E. Purchase, ship, and receive equipment 6 ---

F. Test new operators on equipment 2 C, E

a) (5 points) Using Critical Path Method, find earliest start time, earliest

finish time, latest start time, and latest finish time for each of the activities.

What is the earliest completion time for this project? Identify critical

activities and paths. What is the maximum delay time for each activity

such that it will not increase the project completion time?

b) (5 points) After examining his initial list of activities, Dr. Windsor realizes that while preliminary parts of operator’s training can take place before

the new equipment arrives, the last three weeks of training must take

place only after the equipment arrives. Re-do the project plan, completion

time estimate, and critical activity identification using CPM and taking

this new information into account.

c) (5 points) Now suppose activities A and B both have to be done using same resources. This just means that activities A and B cannot be

completed at the same time anymore and should be completed

sequentially. Re-do the project plan, completion time estimate, and critical

activity identification using CPM and taking this new information into

account. (Note: the information in part b is still to be considered)

Problem 4: (25 points) Development of a new deluxe version of a particular software product is being considered by Ravi Behara’s software house. The

indirect cost is $500 per week. The activities necessary for the completion of this

project are listed in the following table

a) (5 points) What is the project completion time and the total cost required for completing this project on normal time?

b) (5 points) If you wish to reduce the time required completing this project by 1 week, which activity should be crashed, and how much will this

change the total cost?

c) (10 points) If you wish to reduce the total cost to the minimum level, which activities should be crashed, and how much will this make the total

cost?

d) (5 points) What is the earliest time that the project can be completed by crashing the activities? How much will this make the total cost?

Normal Normal Maximum Crash Cost Immediate Time (weeks) Cost Crash Time (weeks) Per Week Predecessor(s)

a 4 2,000$ 2 300$ - b 2 2,200$ 1 600$ - c 3 200$ 0 -$ - d 8 2,300$ 2 200$ a e 6 900$ 3 100$ b f 3 3,000$ 1 1,200$ c g 4 1,400$ 1 600$ d, e, f

Activity