1.

Consider the activity plan:

Activity
A
B
C
D
E
F
G
H
I
J
A.

Precedent
A
A
B
D
B
C, E
F, G
H, I

Duration
5
2
12
3
5
1
7
2
10
6

Which task(s) must be on the critical path, regardless of activity durations?

[2 marks]
Activity J, because it is the last activity in this network path. All paths will conclude
at J, regardless of its duration.

B.
C.

Draw network diagram using ADM and PDM methods

[5 marks]
What is the duration of path A-B-E-H-J?
marks]

[2

20
D.

What are Free Slack and Late Finish at activity H?

[2 marks]
Free slack = 0, Late finish = 19

E.

What impact would delaying activity C by two periods have on project

duration?
[2 marks]
It will have no impact on project duration as C is not on the critical path, neither
does it change the critical path due to a 2-period delay in C

F.

Which activities would be the most economical to crash, as per following:

[15 marks]

Activit
y
A
B

Normal
Time
5
2

Normal
Cost
$21,000
$6,000

Crash
Margin
0
1

C
D
E

12
3
5

$4,000
$4,500
$5,800

9
0
2

F
G
H
I
J

1
7
2
10
6

$1,950
$4,300
$3,550
$14,000
$22,000

0
3
0
0
3

Total

$87,100

Cost of
crashing
$3,400 /
period
$800 / period
$500 / period
$2,400 /
period
$200 / period
$120 / period
$5,000 /
period

OTM-621 Spring 2014

Mid-Semester Examination
School

NUST Business

The project manager has additional 5% of the normal cost ($4,355) available as
contingency reserve. If the actual costs exceed 105% of the normal costs
($91,455), the project manager will have to borrow additional funds at a flat rate
of 36.5%. The reward for early completion is $6,200 per day.

We should crash activity G by 3 days and activity B by 1 day at a total cost of

$4,000 while earning a reward of $24,800. This will bring the project duration
down to 26 periods and net benefit to $20,800. Detailed calculations in the
attached Excel sheet.

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