Quantitative Methods for Business_ Ms.

Dang Thi Uyen Thao 1

Please read the following instructions carefully before working on the assignment

• PROCESS IS MORE IMPORTANT THAN RESULT

• Late submission will be deducted 10 points per day
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• Let yourself struggle with problems for a while before looking up the answer using other
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marked zero with no excuse.
• Please attach the information below on the top of the submitted answer paper. The scale for
Contribution is from 1 to 5, in which 1 describes minimum and 5 describes maximum commitment.
__________________________________________________________________________

QUANTITATIVE METHODS FOR BUSINESS

Ms. Dang Thi Uyen Thao
ASSIGNMENT CHAPTER 12
dd/mm/yy

Full name & ID Contribution

QUESTION 1 ★★★☆☆

Mr. Guǎngzhōu, the manager of Guǎngdōng Stadium has reached a decision after months
investigating, to build up a first-class stadium. He planned to enter the skybox business- providing
luxury boxes with the best views of the event through glass panels and located at the lowest ring
of seats, nearest to the playing court. Mr. Guǎngzhōu also included the expand of stadium capacity
up to 21,000 seats with more rows of common seating, built-in dormitory rooms for players and a
palatial office appropriate for coaches of the champion team.

The process typically begins with a revision on tax and insurance structuring to prevent unwanted
consequences during the construction (1). This is followed by two tasks: an installation of precast
components that serve as the foundation for the new stadium (2); and site excavation to create
more stadium seats and skyboxes (3), simultaneously. After the laying of the stadium concrete
foundation, work on the electrical installation of lights, interior wiring and lathes will take place
(4). And then, the on-site quality inspection of this electrical construction is provided right after
(5).

When finishing the site excavation for expanding seats and skyboxes, they can start to construct
on the “vertical circulation” scheme, which makes use of staircases, ramps, lifts, and escalators
(6). The task that involves works on stadium plumbing pipe problems will take place only when
the electrical installation and the vertical circulation construction have both been finished (7). After
plumbing, they could remove the existing paint from the stadium bowl top and underside and
Quantitative Methods for Business_ Ms. Dang Thi Uyen Thao 2

renew with the new design (8). After renewing the appearance, one specialized team will oversee
an important part of residential structures of heating, ventilation, and air conditioning (HVAC)
installation (9), while another design team working on carpet tiles that meet the function and
sustainability goals (10) at the same time. When finishing carpeting tasks, another quality
inspection team is sent to the carpeting site right after (11). The last step that needs to be done
before getting the construction done is some final detail works and cleanup activities, which are
only started after the carpeting inspection and HVAC installation have been both completed (12).

The information below is provided for each task, in accordingly order: optimistic, most likely,
pessimistic time estimates (days), days that can be saved using outsourced labor, and cost per crash
day

(1): 20, 30, 40, 10, $1,400

(2): 20, 65, 80, 20, $500
(3): 50, 60, 100, 20, $4,000
(4): 30, 50, 100, 10, $1,850
(5): 1, 1, 1, 0, $0
(6): 25, 30, 35, 10, $9,500
(7): 25, 30, 35, 10, $1,900
(8): 10, 20, 30, 12, $2,000
(9): 20, 25, 60, 10, $2,000
(10): 8, 10, 12, 10, $6,000
(11): 1, 1, 1, 0, $0
(12): 20, 25, 60, 8, $2,500

1. Describe and denote significant tasks to complete the Guǎngdōng Stadium

2. Estimate the expected time to finish each task
3. Draw a network including the estimation of ES, EF, LS, LF
4. Determine the critical path. How long is the project expected to take?
5. Last year, Guǎngdōng Stadium signed a contract with Guǎngdōng University of Technology
about holding their charity match, and the contract penalty of $10,000 per day for running late
is nothing compared to the long-built brand name of Guǎngdōng Stadium if the upcoming
game is delayed or cancelled. The estimation was that there will be 270 days until the upcoming
game. Mr. Guǎngzhōu discusses with the project team continuously about how the project is
going on. He claims that if there are less than 90% sure about finishing this stadium in less
than 270 days, he will outsource labor to speed up (crash) the project.
Will he crash the project? If Yes, describe the crashing project and the additional expense
since the new target date is of 230 days.

QUESTION 2 ★★☆☆☆
Quantitative Methods for Business_ Ms. Dang Thi Uyen Thao 3

Consider the example from the Vermont Teddy bear in the chapter 12 lecture. Specifically, to
complete the Vermont Teddy order, the following tasks are expected to be completed: cut fur (2
days), stuff and sew fur (6 days), cut materials (2 days), sew clothes (2 days), embroider T-shirt (2
days), cut accessories (1 days), sew accessories (2 days), dress bear (3 days), packaging and
shipping (1 day each).

Also, this is a special order that requires a music player to be mounted inside the Teddy bear. This
music player was ordered separately from the making of the bear, and took 11 days from placing
an order to receiving it. This music player will be attached into Teddy right before sewing Teddy
fur for 1 day.

1. Redraw a network to make the Vermont Teddy bear, considering 2 additional tasks above
2. Include the estimation of ES, EF, LS, LF to the network above
3. Determine the critical path and the duration of the project

QUESTION 3 ★★☆☆☆

General Foundry tried to avoid the expense of installing air pollution control equipment. They
wanted a smoothly and on time installation, otherwise they’ll be forced to close if failing to meet
the 16-week deadline.
When the project begins, the building of internal components (A) and the floor & roof
modifications (B) can be started. The construction of the collection stack (C) begins once the
internal components are completed. The pouring of the new concrete floor and installation of the
frame (D) can be done since the roof & floor have been modified. After constructing the collection
stack, the high-temperature burner can be built (E), and the installation of the control system (F)
begins. The air pollution device can be installed (G) after building the high-temperature burner,
the concrete floor has been poured, and the frame has been installed. Finally, after the control
system and pollution device have been installed, the system can be inspected and tested (H).
1. Construct a project network of General Foundry
2. Calculate the expected completing time and variance for each activity, given three-time
estimates in accordingly order: optimistic (a), most likely (m), pessimistic (b) time estimates
(weeks)
A: 1, 2, 3
B: 2, 3, 4
C: 1, 2, 3
D: 2, 4, 6
E: 1, 4, 7
F: 1, 2, 9
G: 3, 4, 11
H: 1, 2, 3
3. Draw the table of the earliest and latest start and finish times, and then calculate the slack for
all activities of General Foundry
Quantitative Methods for Business_ Ms. Dang Thi Uyen Thao 4

4. Find the critical path and conclude the earliest expected time to complete General Foundry’s
project
5. What is the probability that the equipment will be in place within the 16-week deadline?
Assume that the activity times are statistically independent, and the total project completion
time follows a normal probability distribution
6. The entire project will cost General Foundry $308,000. Finding the total weekly budget will
help General Foundry determine how the project is progressing on a week-to-week basis, using
both the earliest and latest start times. And then, find the total (accumulated) amount spent to
date, and the budget range. You are given the budget for each activity (in thousands) as follow:
A- 22, B- 30, C- 26, D- 48, E- 56, F- 30, G- 80, H- 16
7. General Foundry wants to know how the air pollution project is going. It is now the sixth week
of the 15-week project. Activities A, B, and C have been finished. These activities incurred
costs of $20,000, $36,000, and $26,000 respectively. Activity D is only 10% completed and
so far the cost expended has been $6,000. Activity E is 20% completed with an incurred cost
of $20,000, and activity F is 20% completed with an incurred cost of $4,000. Activities G and
H have not been started. Is the air pollution project on schedule? What is the value of work
completed? Are there any cost overruns?
8. How does General Foundry crash the project if it has been given a new deadline of 14-week?
How does General Foundry crash the project if it has been given a new deadline of 12-week?
The cash time and cash cost per week are given.

QUESTION 4 ★★★☆☆

Mumbai LLC., a new established subsidiary of India Co., is about businesses prospering through
strong leaders and independence. In general, they will rigorously handle capital allocation and
work to make sure each business is executing well, where India Co., the parent corporation, will
provide financial supports separately and in cases needed. Mr. Mumbai, the chief financial officer
of Mumbai LLC, has been assigned to monitor the new construction project. Some of the
information on the activities is shown in the following table:

Activity Months
Quantitative Methods for Business_ Ms. Dang Thi Uyen Thao 5

Immediate Normal Months Crash

Max Most likely Min predecessors cost can be cost
saved
A 8 9 10 _ 1,350 1 1,380
B 6 7 8 _ 1,225 1 1,270
C 12 14 16 _ 1,540 2 1,590
D 10 15 20 A 900 2 920
E 11 14 17 C 504 3 525
F 9 10 11 B, D, E 2,050 1 2,125
G 6 7 14 B, D, E 448 2 464
H 8 10 12 F 1,500 3 1,620
I 10 11 12 F 935 1 950
J 6 7 8 G, H 840 5 965
K 4 7 10 I, J 210 2 222
L 13 14 21 G, H 960 2 984

1. Construct a network for this project.

2. Determine the critical path of the project. How soon can Mumbai LLC expect to get the project
done?
3. What is the probability that the project will be finished in 65 months or less?
4. While Mr. India, CEO of India Co., wishes to access the performance of their subsidiaries, Mr.
Mumbai expects to set the due date for the completion of the project so that there is a 95%
chance of finishing on schedule. What should this due date be?
5. The amount of idle money available of Mumbai LLC. Is about 500 thousands dollar. Mr.
Mumbai intends to borrow to finance their project. Typically, in small and medium sized
projects, a single loan is obtained to cover the total amount. However, for the new project, Mr.
Mumbai believes that it may be wise to split the total borrowing into monthly amounts.
Approved by Mr. India, from the first day of the project, Mr. Mumbai can borrow 200 thousand
dollars per month with zero interest rate. The line of credit lasts until the last minute of project.
With the strong financial support from their parent, could Mr. Mumbai manage the cash flows
so that the project will proceed as planned?
Ms. Uyen Thao advises you to calculate monthly budget based on both earliest and latest time.
6. To get the higher performance on India Co.’s subsidiaries evaluation ranking, Mr. Mumbai
wishes to complete the project earlier than normal procedures about 6 months. Mr. Mumbai
intends to hire more seasonal employees at an extra cost. The additional cost and the time that
can be saved are provided in the table.
Please show the crashing process and the expense that incurs.
Quantitative Methods for Business_ Ms. Dang Thi Uyen Thao 6

QUESTION 5 ★★★☆☆

Chemicals cause pollution, and the weeds seem to grow faster after chemicals have been used.
One of Karachi’s friends showed him how to kill weeds in his large backyard with only household-
use white vinegar and without using harmful chemicals

The guidance including six activities that are necessary to an effective weed eradication is
summarized with the time-cost information for each activity.

Pakistan- Karachi’s wife requires him to finish the process in 110 hours to keep up with the year-
end BBQ party. Karachi can speed up the weed-killing process by asking for extra help at an
additional expense. Since Pakistan created a spending allowance for Karachi each month, please
help Karachi finish the process by his wife’s deadline with the minimum possible additional
expense.

Ms. Uyen Thao assumes that there is a single linear, continuous function between the crash
duration and normal duration time.

Normal # of Additional
Normal
Activity Description duration hours cost for
cost
(hours) saved less time
Start sorting out the grasses and plants and
flowers you are growing because there are
1 120 20 12,000 2,000
many types of weeds that need a
corresponding dose of white vinegar.
At the same time, you can prepare enough
white vinegar with 5% acetic acid
2 20 5 1,800 1,000
concentration to ensure the eradication of
large numbers of weeds over a large area
After preparing the vinegar with the right
concentration, you can divide the weeds
into two groups for simultaneous
3 eradication. For the easy-to-eradicate 40 10 16,000 6,000
weed, you can dilute the vinegar and add
10 ml of dishwashing liquid to help the
vinegar stick to the grass.
Then, you pour the mixture into a garden
4 sprayer with a long nozzle to make it 30 10 1,400 600
easier to spray weeds over a large area.
For the more-difficult-to-eradicate weed,
5 you can pour a mixture of pure acid with 50 10 3,600 1,200
salt into a spray bottle.
After finishing pouring the mixture into
two separate sprayers, choose a sunny day
to spray the weed, because when the grass
6 has been exposed to the sun for at least a 60 15 13,500 4,500
few hours, the acetic acid will be more
effective and makes the grass to dry out
quickly.
Quantitative Methods for Business_ Ms. Dang Thi Uyen Thao 7

Please describe the crashing process and the expense that incurs.

QUESTION 6 ★☆☆☆☆

1. Please crash this project to 10 weeks

2. Please crash this project to maximum (so that it cannot be crashed further)

Normal Crash
Immediate Normal Crash
Activity time time
predecessors cost cost
A _ 3 2 1,000 1,500
B _ 2 1 2,000 2,700
C _ 1 1 300 400
D A 7 3 1,300 1,700
E B 6 3 850 1,000
F C 2 1 4,000 5,000
G D, E 4 2 1,500 2,000

_____ THE END _____