Adolf Hospital

Adolf Hospital Project

Normal Crash
Imm. Time Normal Time Crash Cost
Activity Description Predec. (Wks) Cost ($) (Wks) ($)
1 Select Administrative & Medical Staff - 12 12,000 11 13,000
2 Select Site and Do a survey - 9 50,000 7 64,000
3 Select Equipment 1 10 4,000 5 7,000
4 Prepare Final Construction Plan and Layout 2 10 16,000 8 20,000
5 Bring utilities to site 2 24 120,000 14 200,000
6 Fill positions in nursing, support staff, mainte 1 10 10,000 6 16,000
7 Purchase and take delivery of equipments 3 35 500,000 25 530,000
8 Construct the Hospital 4 40 1,200,000 35 1,260,000
9 Develop an Information System 1 15 40,000 10 52,500
10 Install the quipments 5, 7, 8 4 10,000 1 13,000
11 Train nurses and support staff 6, 9, 10 6 30,000 5 34,000

The Indirect cost is $ 8,000 per week.

The sponsor wants to complete the project in 65 weeks
and has imposed a penalty of $ 20,000/Wk for delay beyond 65 weeks

1) Draw a network diagram for the project.

2) Find the normal duration for completion of the project by finding ES, EF, LS, LF and float for each activity.
3) What will be the maximum savings if the project can be completed in 65 days? (8000+20000 per day saved)
4) Can the cost be further reduced? (only 8000 per day saved)
 Normal
Imm. Time
Activity Description Predec. ES EF (Wks) LS
1 Select Administrative & Medical Staff - 0 12 12 2
2 Select Site and Do a survey - 0 9 9 0
3 Select Equipment 1 12 22 10 14
Prepare Final Construction Plan and
4 2 9 19 10 9
Layout
5 Bring utilities to site 2 9 33 24 35
Fill positions in nursing, support staff,
6 1 12 22 10 53
maintenance and security
7 Purchase and take delivery of equipments 3 22 57 35 24
8 Construct the Hospital 4 19 59 40 19
9 Develop an Information System 1 12 27 15 48
10 Install the quipments 5, 7, 8 59 63 4 59
11 Train nurses and support staff 6, 9, 10 63 69 6 63
Total
Overhead
Penalty
Grand Total

Gantt Chart
Activity

11

10

1
Weeks
0 10 20 30 40 50

ES Normal Time (Wks) FLOAT

4

1
Weeks
0 10 20 30 40 50

ES Normal Time (Wks) FLOAT

 1 2
LF FLOAT Cost
14 2 12,000
9 0 50,000
24 2 4,000
4
19 0 16,000 3
59 26 120,000
63 41 10,000

59 2 500,000 7 8 5
59 0 1,200,000
63 36 40,000
63 0 10,000
9 6
69 0 30,000 10
1,992,000
552,000
80,000
2,624,000

11

50 60 70

FLOAT
 50 60 70

FLOAT
 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
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 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69
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 Normal
Imm. Time Normal Crash
Activity Description Predec. (Wks) Cost Time
1 Select Administrative & Medical Staff - 12 12,000 11
2 Select Site and Do a survey - 9 50,000 7
3 Select Equipment 1 10 4,000 5
Prepare Final Construction Plan and
4
Layout 2 10 16,000 8
5 Bring utilities to site 2 24 120,000 14
Fill positions in nursing, support staff,
6
maintenance and security 1 10 10,000 6
7 Purchase and take delivery of equipments 3 35 500,000 25
8 Construct the Hospital 4 40 1,200,000 35
9 Develop an Information System 1 15 40,000 10
10 Install the quipments 5, 7, 8 4 10,000 1
11 Train nurses and support staff 6, 9, 10 6 30,000 5

Normal Duration
Normal Cost
New Duration
Savings in OH
Saving of Penalty
Incremental Cost of Crashing
Net Cost

Gantt Chart
Activity

11

10

4
10

Acti
9

1
Weeks
0 10 20 30 40 50

ES Duration Float
 Crash Incr New
Cost Cost/Wk Duration Incr Cost ES EF LS LF FLOAT 1

13,000 1,000 12 0 0 12 2 14 2
64,000 7,000 9 0 0 9 0 9 0
7,000 600 10 0 12 22 14 24 2

20,000 2,000 10 0 9 19 9 19 0
200,000 8,000 24 0 9 33 35 59 26

16,000 1,500 10 0 12 22 50 60 38
530,000 3,000 35 0 22 57 24 59 2
1,260,000 12,000 40 0 19 59 19 59 0
52,500 2,500 15 0 12 27 45 60 33
13,000 1,000 1 3,000 59 60 59 60 0
9
34,000 4,000 6 0 60 66 60 66 0

69
2,624,000
66
24,000
60,000
3,000
2,543,000
 50 60 70

uration Float
 1 2

7 8 5

9 6
10

11
 Normal
Imm. Time Normal Crash
Activity Description Predec. (Wks) Cost Time
1 Select Administrative & Medical Staff - 12 12,000 11
2 Select Site and Do a survey - 9 50,000 7
3 Select Equipment 1 10 4,000 5
Prepare Final Construction Plan and
4
Layout 2 10 16,000 8
5 Bring utilities to site 2 24 120,000 14
Fill positions in nursing, support staff,
6
maintenance and security 1 10 10,000 6
7 Purchase and take delivery of equipments 3 35 500,000 25
8 Construct the Hospital 4 40 1,200,000 35
9 Develop an Information System 1 15 40,000 10
10 Install the quipments 5, 7, 8 4 10,000 1
11 Train nurses and support staff 6, 9, 10 6 30,000 5

Normal Duration
Normal Cost
New Duration
Savings in OH
Saving of Penalty
Incremental Cost of Crashing
Net Cost

Gantt Chart
Activity

11
10
9
8
7
6
5
4
3
2
8
7
6
5
4
3
2
1
Weeks
0 10 20 30 40 50

ES Duration Float
 Crash Incr New
Cost Cost/Wk Duration Incr Cost ES EF LS LF FLOAT 1
13,000 1,000 12 0 0 12 1 13 1
64,000 7,000 9 0 0 9 0 9 0
7,000 600 10 0 12 22 13 23 1

20,000 2,000 9 2,000 9 18 9 18 0

200,000 8,000 24 0 9 33 34 58 25

16,000 1,500 10 0 12 22 49 59 37
530,000 3,000 35 0 22 57 23 58 1
1,260,000 12,000 40 0 18 58 18 58 0
52,500 2,500 15 0 12 27 44 59 32
13,000 1,000 1 3,000 58 59 58 59 0
9
34,000 4,000 6 0 59 65 59 65 0

69
2,624,000
65
32,000
80,000
5,000
2,517,000
 50 60 70

n Float
 2
1

7 8 5

9 6
10

11
 Normal
Imm. Time Normal Crash
Activity Description Predec. (Wks) Cost Time
1 Select Administrative & Medical Staff - 12 12,000 11
2 Select Site and Do a survey - 9 50,000 7
3 Select Equipment 1 10 4,000 5
Prepare Final Construction Plan and
4
Layout 2 10 16,000 8
5 Bring utilities to site 2 24 120,000 14
Fill positions in nursing, support staff,
6
maintenance and security 1 10 10,000 6
7 Purchase and take delivery of equipments 3 35 500,000 25
8 Construct the Hospital 4 40 1,200,000 35
9 Develop an Information System 1 15 40,000 10
10 Install the quipments 5, 7, 8 4 10,000 1
11 Train nurses and support staff 6, 9, 10 6 30,000 5

Normal Duration
Normal Cost
New Duration
Savings in OH
Saving of Penalty
Incremental Cost of Crashing
Net Cost

Gantt Chart
Activity

11

10

2
8

1
Weeks
0 10 20 30 40 50

ES Duration Float
 Crash Incr New
Cost Cost/Wk Duration Incr Cost ES EF LS LF FLOAT 1

13,000 1,000 12 0 0 12 0 12 0
64,000 7,000 9 0 0 9 0 9 0
7,000 600 10 0 12 22 12 22 0

20,000 2,000 8 4,000 9 17 9 17 0

200,000 8,000 24 0 9 33 33 57 24

16,000 1,500 10 0 12 22 48 58 36
530,000 3,000 35 0 22 57 22 57 0
1,260,000 12,000 40 0 17 57 17 57 0
52,500 2,500 15 0 12 27 43 58 31
13,000 1,000 1 3,000 57 58 57 58 0
9
34,000 4,000 6 0 58 64 58 64 0

69
2,624,000
64
40,000
80,000
7,000
2,511,000
 50 60 70

n Float
 1 2

7 8 5

9 6
10

11
 Normal
Imm. Time Normal Crash
Activity Description Predec. (Wks) Cost Time
1 Select Administrative & Medical Staff - 12 12,000 11
2 Select Site and Do a survey - 9 50,000 7
3 Select Equipment 1 10 4,000 5
Prepare Final Construction Plan and
4
Layout 2 10 16,000 8
5 Bring utilities to site 2 24 120,000 14
Fill positions in nursing, support staff,
6
maintenance and security 1 10 10,000 6
Purchase and take delivery of
7
equipments 3 35 500,000 25
8 Construct the Hospital 4 40 1,200,000 35
9 Develop an Information System 1 15 40,000 10
10 Install the quipments 5, 7, 8 4 10,000 1
11 Train nurses and support staff 6, 9, 10 6 30,000 5

Normal Duration
Normal Cost
New Duration
Savings in OH
Saving of Penalty
Incremental Cost of Crashing
Net Cost

Gantt Chart
Activity

11
10
9
8
7
6
5
4
3
2
8
7
6
5
4
3
2
1
Weeks
0 10 20 30 40 50

ES Duration Float
 Crash Incr New
Cost Cost/Wk Duration Incr Cost ES EF LS LF FLOAT 1

13,000 1,000 12 0 0 12 0 12 0
64,000 7,000 9 0 0 9 0 9 0
7,000 600 10 0 12 22 12 22 0

20,000 2,000 8 4,000 9 17 9 17 0

200,000 8,000 24 0 9 33 33 57 24

16,000 1,500 10 0 12 22 48 58 36

530,000 3,000 35 0 22 57 22 57 0
1,260,000 12,000 40 0 17 57 17 57 0
52,500 2,500 15 0 12 27 43 58 31
13,000 1,000 1 3,000 57 58 57 58 0
9
34,000 4,000 5 4,000 58 63 58 63 0

69
2,624,000
63
48,000
80,000
11,000
2,507,000
 50 60 70

ation Float
 1 2

7 8 5

9 6
10

11
 Normal
Imm. Time Normal Crash
Activity Description Predec. (Wks) Cost Time
1 Select Administrative & Medical Staff - 12 12,000 11
2 Select Site and Do a survey - 9 50,000 7
3 Select Equipment 1 10 4,000 5
Prepare Final Construction Plan and
4
Layout 2 10 16,000 8
5 Bring utilities to site 2 24 120,000 14
Fill positions in nursing, support staff,
6
maintenance and security 1 10 10,000 6
Purchase and take delivery of
7
equipments 3 35 500,000 25
8 Construct the Hospital 4 40 1,200,000 35
9 Develop an Information System 1 15 40,000 10
10 Install the quipments 5, 7, 8 4 10,000 1
11 Train nurses and support staff 6, 9, 10 6 30,000 5

Normal Duration
Normal Cost
New Duration
Savings in OH
Saving of Penalty
Incremental Cost of Crashing
Net Cost

Gantt Chart
Activity

11

10

2
8

2
1
Weeks
0 10 20 30 40 50

ES Duration Float
 Crash Incr New
Cost Cost/Wk Duration Incr Cost ES EF LS LF FLOAT 1

13,000 1,000 12 0 0 12 0 12 0
64,000 7,000 7 14,000 0 7 0 7 0
7,000 600 8 1,200 12 20 12 20 0

20,000 2,000 8 4,000 7 15 7 15 0

200,000 8,000 24 0 7 31 31 55 24

16,000 1,500 10 0 12 22 46 56 34

530,000 3,000 35 0 20 55 20 55 0
1,260,000 12,000 40 0 15 55 15 55 0
52,500 2,500 15 0 12 27 41 56 29
13,000 1,000 1 3,000 55 56 55 56 0
9
34,000 4,000 5 4,000 56 61 56 61 0

69
2,624,000
61
64,000
80,000
26,200
2,506,200
 50 60 70

ration Float
 1 2

7 8 5

9 6
10

11
 Imm. Duration Labour Material
Activity Description Predec. (Wks) Cost Cost
1 Elevator Pit Making - 3 10,000 50,000
2 Cast Elevator Shaft 1 24 0 0
3 Fix Guide Rails, Service Ladder 2 4 40,000 200,000
4 Install Counterweight 3 1 10,000 40,000
5 Install Elevator Car 3 3 60,000 330,000
6 Roof Over Elevator Shaft 4,5 3 5,000 0
7 Make Machine Room 6 4 5,000 0
8 Install Hoist Motor 7 3 15,000 300,000
9 Install Controller 7 1 4,000 500,000
10 Attach Wire Rope 8 2 10,000 45,000
11 Install Controls on each floor 2 3 20,000 100,000
12 Complete Electrical Connections 8,9,11 3 25,000 40,000
13 Programme Controller 9 2 40,000
14 Test The elevator 10,12,13 3 10,000
Total 254,000 1,605,000

1 Material and Labour Cost for each activity are incurred as soon as the activity begins
2 The Project has to be finished in 48 Weeks
3 If Activities 7,8,10,11 & 12 can be expedited by 1 week each by paying 20% more of labour cost,
activities will you expedite? Why?
 ES EF LS LF FLOAT
0
0
0
0
0
0
0
0
0
0
0
0
0
0

ctivity begins

20% more of labour cost, which

0
Wk 0 1 2 3 4 5 6 7 8 9 10 11
ES 60 60 60 60 60 60 60 60 60 60 60 60
LS 60 60 60 60 60 60 60 60 60 60 60 60

Cumulat

2000
1800
1600
1400
1200
1000
800
600
1800
1600
1400
1200
1000
800
600
400
200
0
0 2 4 6 8 10 12 14 16 18 20
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 ### ### ### ### ### ### ### ### ###
60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 ### ### ### ### ### ### ### ### ###

Cumulative Cash Flow (000s)

2 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50
ES
LS
 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
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48 50