HOMEWORK 5 Agribusiness Project Management, AGBU 515, Summer 2017 Commented [m1]: Total grade:

99.5 points
All the problems must be neatly handwritten and stapled together. Sloppy homework
assignments will be penalized.

You MUST submit every homework assignment completed 100% to be eligible to take the
upcoming exam. All homework assignments MUST be done on your own. No collaboration is
allowed. You can talk to the instructor or the TA if you have questions. SHOW ALL WORK.

Due: 18:25 pm, July 31

Late homework: no credit will be given; however, you still must submit it
Submit to: Teaching assistant
Total points possible: 100

PROBLEM 1 (25 points)

Proceeding from the data presented in the table below answer to the following questions:
a) Draw the project schedule network diagram in a rectangular node.
b) Find the total number of paths on the network diagram. Write down the paths.
c) Which one is the critical path? Find the durations of all critical and non-critical paths. What
is the duration of the project?
d) Calculate total and free floats for each activity.

Activity ID Duration, days Predecessors

Start 0 -
A 4 Start
B 3 A
C 4 B
D 5 Start
E 8 D
F 7 B
G 6 D
H 4 E, G
End 0 C, F, H

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PATHS
1) A-B-C
2) A-B-F
3) D-E-H
4) D-G-H
Critical path is D-E-H
Duration of paths
1) A-B-C=4+3+4=11
2) A-B-F=4+3+7=14
3) D-E-H=5+8+4=17
4) D-G-H=5+6+4=15
Free Float
FF(A)=ES(B)-EF(A)-1=5-4-1=0
FF(B)=ES(C)-EF(B)-1=8-7-1=0
FF(B)=ES(F)-EF(B)-1=8-7-1=0
FF(D)=ES(E)-EF(D)-1=6-5-1=0
FF(D)=ES(G)-EF(D)-1=6-5-1=0
FF(E)=ES(H)-EF(E)-1=14-13-1=0
FF(G)=ES(H)-EF(G)-1=14-11-1=2

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PROBLEM 2(25 points)
Compose and analyze a precedence type network diagram in accordance with the data presented in
the activities table below and using PERT method.

Activity Dependencies Duration (days)

T optimistic T most likely T pessimistic
Start - 0 0 0
A Start 5 6 7
B Start 4 5 18
C A 4 15 20
D C 3 4 5
E A 5 16 18
End B, D, E 0 0 0

a) Compute the expected time for each activity and the expected duration for each path.
b) Identify the critical path.
c) Compute the variance of the variance of the critical path.
d) What is the probability that the project will be completed within 26 days of its start?

Activity Dependences Expected Time Variance

start - - -
A START 6 0.11
B START 7 5.43
C A 14 7.08
D C 4 0.11
E A 14.5 4.67
END BDE - - Commented [m2]: Only for critical activities.

-0.5

EXPECTED TIME=OPTIMISTIC+4*MOSTLY LIKELY+PESSIMISTIC

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ET(A)=(5+4*6+7)/6=6

ET(B)=(4+4*5+18)/6=7

ET(C)=(4+4*15+20)/6=14

ET(D)=(3+4*4+5)/6=4

ET(E)=(5+4*16+18)/6=14.5

VARIANCE

=((P-O)/6)

(A)=((7-5)/6)=0.11

(B)=((18-4)/6)=5.43

(C)=((20-4)/6)=7.08

(D)=((5-3)/6)=0.11

(E)=((18-5)/6)=4.67

paths

A-C-D-critical

A-E

Duration

A-C-D=6+14+4=24

A-E=6+14.5=20.5

B=7

Vaiance path

A-C-D=0.11+7.08+0.11=7.3

A-E=0.11+4.67=4.78

B=5.43
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Standard deviation== 7.3=2.7

This means that duration of our project will have deviation+-2.7. our project has to be
completed during 24 days. Our calculations give us project duration 24 days. Probability
that it will finis in 26 days is:

Z=(26-24)/2.7=0.74 p=0.7704

Z=0.74 which corresponds to 77.04% probability that we will finish our project by the end of
26-th day.

PROBLEM 3 (25 points)

You as a project manager identified with your team total seven activities for the project, defined
their relationships and the time needed for completion of thoseactivities. Also you defined the cost
of each activity. The data is presented in the Table 1 below:
Table 1
Activity ID Duration, days Predecessors Initial cost, $
A 5 - 500
B 10 A 1200
C 13 A 3600
D 3 B 300
E 9 B, D 1000
F 10 C 2400
G 5 E, F 700

a) Draw a simple network diagram of the project schedule and define durations of allcritical
and non-critical paths.

PATHS

A-B-D-E-G=5+10+3+9+5=32
A-B-E-G=5+10+9+5=29
A-C-F-G=5+13+10+5=33- CRITICAL PATH

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 b) Define the duration and cost of the project in the initial situation.
INITIAL DURATION=33
INITIAL DURATION COST=500+1200+3600+300+1000+2400+700=$9700

c) Compress the project duration by means of crashing proceeding from the data presented
below in the Table 2. You are allowed to cut the project duration till the point where the
increased direct cost does not exceed the initial cost by 32%.
INITIAL COST=$9700
DIRECT COST=9700+9700*0.32=9700+3104=12804
DURATION=33 DAYS

CRASHING STEP1
Crashing activites- A
Duration-32days
Direct cost- 9700+100=9800

A-B-D-E-G=4+10+3+9+5=31
A-B-E-G=4+10+9+5=28
A-C-F-G=4+13+10+5=32

CRASHING STEP 2

Crashing activities- A,C

Duration-31days
Direct cost- 9700+100+600=10400

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A-B-D-E-G=4+10+3+9+5=31
A-B-E-G=4+10+9+5=28
A-C-F-G=4+12+10+5=31

CRASHING STEP 3
Crashing activities- A,C,D,C
Duration-30days
Direct cost- 9700+100+600+150+600=11150

A-B-D-E-G=4+10+2+9+5=30
A-B-E-G=4+10+9+5=28
A-C-F-G=4+11+10+5=30

CRASHING STEP 4

Crashing activities- A,C,D,C,D,F

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Duration-29days
Direct cost- 9700+100+600+150+600+150+1500=12800

A-B-D-E-G=4+10+1+9+5=29
A-B-E-G=4+10+9+5=28
A-C-F-G=4+11+9+5=29

CRASHING STEP 5 Commented [m3]: Yes, this is unnecessary

Crashing activities- A,C,D,F,D,D,F,B
Duration days-28
Direct cost 12800+1500+200=14500

We do not need crashing step 5 because we are allowed to cut until direct cost does not exeed 35%
which is $12804.

Table 2
Activity Initial Predecessors Initial cost, $ Max possible Time cut
ID duration, days time cut, days cost, $/day
A 5 - 500 1 100
B 10 A 1200 4 200
C 13 A 3600 2 600
D 3 B 300 2 150
E 9 B, D 1000 1 400
F 10 C 2400 2 1500
G 5 E, F 700 0 0

Present all steps of your crashing process.

d) Define the optimal duration of the project (if there is any) by optimization of time and cost
factors. Take into consideration that the initial indirect cost of the project is equal to $2000,
whichdecreases by $200 per day.

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Duration days Direct cost Indirect cost total
33 9700 2000 11700
32 9800 1800 11600
31 10400 1600 12000
30 11150 1400 12550
29 12800 1200 14000
32 days is optimum duration of the project because in this case we have low total cost.

PROBLEM 4 (25 points)

Your project consists of 4 sequential non-overlapping phases.

Planned duration of the project is 5 months.
In the Table 1 basic data of cost and time is presented.
Today is the end on the 4-th month and we have to evaluate the project performance using EVM
method and Tables 1 and 2 data.

Table 1
Phase Duration, month Budget distribution
Phase 1 1 $ 10
Phase 2 1 $ 15
Phase 3 2 $ 200 *
Phase 4 1 $ 80
*) This sum has to be spent uniformly per month
Table 2
Phase Status at the end of 4-th month
1 2 3 4 5
Phase 1 S-F Completed: 100%
Spent: $ 9
Phase 2 S-F Completed: 100%
Spent: $ 16
Phase 3 PS S PF - Completed: 80%
Spent: $ 200
Phase 4 PS - PF Dont started yet
S Actual start, F Actual finish, PS Planned start, PF Planned finish
a) Draw the relevant Gantt chart for planned and actual status of the project.Use the table below
to draw the Gantt chart. Please note that just because the table below is 8x8, it does not mean
that the Gantt chart is that size.

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 b) Calculate the values of BAC, PV, AC, EV, SV, CV, CPI, SPI, EAC, ETC, VAC at the end of
4-th month, interpret the results and analyze the project performance.
BAC=10k+15k+200K+80K=305k
PV=10k+15k+200k=225k ---this is amount of money which is based on budget and is estimated
value of planned work.

AC=9k+16k+200k=225k this is actual cost which was spent for the project accomplished.
EV=10k+15k+160k=185k this is earned value, of work actually accomplished
Actual cost is equalto planned value, but the company earned less.
SV=EV-PV=185k-225K=-40 this means that project is behind schedule
CV=EV-AC=185k-225k=-40 this means that project is over budget.
CPI=EV/AC=185k/225k=0.822=82.2%
Every one dollar spent, the company gets $0.82. in our case company does not have good
situation because it spends more then earn.

SPI=EV/PV=185k/225k=0.822=82.2%
The company is progressing at 82% of the rate originally planed. SPI<1, so the project is
behind the schedule, and also under the budget.
EAC=BAC/CPI=305k/0.82=371.04
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Currently we expect total project cost-371.04
ETC=EAC-AC=371.04-225k=146.95 this is a point expected cost to finish project.
VAC=BAC-EAC=305k-371.04k=-66.04 we expect after finishing project to be 66.04 over
budget.

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