1. Solve problem 25, page 35 of Mantel.

a. What is the expected NPV of the project?

b. What is the range of NPVs
c. How would you characterize the level of risk associated with this project?
d. Would you recommend undertaking this project?
Submit the results of your Crystal Ball analysis
2. Do problem 17, page 140 of Mantel. Submit all work.

Q3. Solve problem 27, page 182 of Mantel.

a. Find the expected time and variance for each task.
b. Draw the network (either AOA or AON) and the critical path and time. You may
use MS Project or draw it manually. In either case, highlight or name the critical
path and state the duration.
c. Find the probability that the critical path will be completed in 23 weeks
d. What is the probability that the other main paths will be completed in 23 weeks?
e. If the paths are independent, what is the probability that the entire network will be
completed in 23 weeks?
SOLUTION:
(a) Expected time and Variance is calculated in the Excel file attached.
(b) The AOA network is drawn below:
d
a f
c
g
b e

(c ) (d) and (e) done in the Excel Spreadsheet

Q4. Solve problem 23, page 233 of Mantel (be sure to read the entire problem). Note that your
choice is only between activities d and c.
a. Minimum slack:
b. Most followers:
c. Most critical followers:
d. Shortest task first:
e. As late as possible:

Q5. Solve problem 25 on page 265 of Mantel.

f. CV
g. SV
h. SPI
i. CPI

SOLUTION:
According to the Question,

Earned Value (EV) = $272,000

Actual Costs (AC) = $270,000

Planned Value (PV) = $261,000

We know that:

Cost Variance (CV):

CV = EV – AC

Cost variance = $272,000 – $270,000 = $2,000

Schedule Variance (SV)

SV = EV – PV

Schedule variance = $272,000 – $261,000 = $11,000

Cost Performance Index (CPI)

CPI = EV / AC

CPI = 272,000/270,000 = 1.01

Schedule Performance Index (SPI)

SPI = EV / PV

SPI = 272,000/261,000 = 1.04

Q6. Answer the following questions concerning the Palmstar Enterprises, Inc Case Study on
page 270 of Mantel.
a. What has the largest impact on Palmstar’s profits, delaying the 2000’s
introduction by 3 months or increasing the project’s budget by 30 percent?
Assume that the end of the product life will occur three years after the scheduled
deployment, regardless of whether the deployment is delayed or not.
b. Are there other factors you would consider in addition to profit?
c. What should Palmstar do? Why?
d. How generalizable do you think the results of your analysis in this particular case
are to other situations?
Q7. You are preparing a project to lay fiber optic cable. The first task is to mobilize the team.
You estimate this will take one week and cost $3000. The second task is to lay the cable. This
will take three weeks and will cost $45,000. The total length of the cable is 15 miles. The last
task, which will take one week, is to Terminate and test the cable. You budget $5000 for this. At
the end of the first week, you have completed mobilization, but it cost a total of $4500. At the
end of the third week, you have completed five miles of cable at a total cost of $28,000
(installation only). It takes you a total of 10 weeks to complete the entire project, for a total cost
of $65,000.
e. At the end of week 1:
i. What is your SPI?
ii. What is your CPI?
iii. What is your EAC?
f. At the end of week 3:
i. What is your SPI?
ii. What is your CPI?
iii. What is your EAC?
g. At the end of the project:
i. What is your SPI?
ii. What is your CPI?
iii. What is your EAC?

Q 8. (Solver) Given the network below:

a. Draw and submit the AOA network
b. What is the critical path?
c. Using Excel Solver, determine the minimum duration. The new price is:

Task Pred Norm t Norm $ Crash t1 Crash $

A - 3 50 2 150
B A 4 100 2 150
C A 5 200 3 300
D B 6 250 4 350
E C 7 400 4 600
F D, E 3 300 2 450

Suggestion: You may want to go back to Answer 2 of IA-3 and use the excel setup in that file
adjusted, of course, for this network.

SOLUTION:
Step 1: Draw the diagram:

1
 D
A B 3
F
1 2 5 6
C 4
E

Step 2: Set up the CPM Spreadsheet

Here, we have 6 activities[ A to F]

In blank spreadsheet,
Type “Activities” in A1
Type Activities letters (i.e. A to F)
In cell A3, type “Nodes”
Row 4, type – activities’ start nodes
In Row 5, type – activities’ end nodes.
Type “times” in cell A6
In Row 7, type each activity’s normal time.
In row 8, type each activity’s crash time
Copy row 7 and paste it into Row 9.
Label each of the Times rows by typing “Norma” in G7, “Crash” in G8, and “Actual” in G9.
In Cell A10, type “Costs”
In Row 11, put each activity’s normal cost. In G11, type “Normal”.
In Row 12, put each activity’s crash cost. In G12, type “Crash”.
In G13, type “Actual”.
Put the formula in A13, =A11+(A7-A9)/(A7-A8)*(A12-A11)
Select cells A13:F13, and paste
Find the Path and
In cell A14, type :Paths”
In A15 type the Paths, there are 2 paths in cells A15 and A16.
In H15 type =SUMPRODUCT(A15:F15,$A$9:$F$9)
Copy and paste it to H16
This shows -- How long each path takes?

Step 2: Identify the critical path

The critical path is in row 16

The critical path is 1-A 2-C 4-E 5-F 6. It’s the path with the longest time.

To make it easier to see which activities are in each path, got to cell A20 and type
=IF(A15=1,A$2,"")
In cell G17 type "MAX"
In cell H17, type =MAX(H15:H16)
This shows how long the slowest path takes.
In cell H20 type =IF(H15=H$17,"CRITICAL","")
Copy cell to H20:H21
The critical path will be labeled as “CRITICAL”

Step 3: Total Cost Formula

In cell D14 , type “Total actual cost:”

In cell G14, add up the actual costs of all of the activities. Type =SUM(A13:F13)
This shows that if we use all normal times for all activities, the total cost is $24,000

Step 4: Fill in the optimizer form

Crash analysis is done by Solver too. From Excel’s menu, select Tools, then Solver.
Fill the Solver Parameters box
1) Set target cell $g$14
2) Equal to : select Min [to find the least-cost way to speed up the project.
3) By changing cells: $A$9: $F$9 [ the changing cells are the Actual times]
4) Subject to the constraints:
5) $A$9:$F$9 <= $A$7:$F$7 [ actual times must be less than or equal to the normal times.]
6) $A$9:f$0 >= $A$8:$F$8 [actual times must be greater than or equal to the crash times.]
7) $H$15:$H$16 <= 17 [ the slowest path can take no more than 17 weeks. Because it is
one less than 18, normal completion time.]

Click on OK in the Solver Options dialog box. And Solve in the Solver Parameters dialog box.

And the Result is

To get finished in 17 weeks(H17 now has 17). We need to spend $1350 (G14 now has 1350)

To find which activities have speeded up and at what extra cost:

We type “Crashed by how much” in A24
In A25 put = A7 – A9 [actual time – normal time]
In A26 , type =A13 – A11 [ actual cost – normal cost]
Select A25:A26 and Copy it to A25:F25
We see that Activity C has been shortened by 1 week, at an extra cost of $50.