QUESTION: 57

Background
Your name is Evan Marshal. You are the corporate scheduler for Happy Insurance Corporation (HIC), a general health insurance company located in Ridgemond, Illinois. HIC is very busy with 49 unique software development projects. The organization structure at HIC gives the project scheduling responsibility to the Project Manager assigned to each project. You are charged with coordination of the project schedules into a Master Schedule and quality control for scheduling on the individual development projects. You report directly to the Director of Information Services (DIS), Desmond Rayburn.

It has come to your attention Project JP-114 has fallen behind schedule and Rita Belateau, the Project Manager, wants to accelerate the project in order to reclaim lost time. Rita is a strong supporter of Total Quality Management and strives for zero failures; therefore she is assessing the need for overtime for resources assigned to an activity that is not projecting a completion prior to the early finish depicted in the current schedule.

You and Rita review the current schedule to identify which activities are on the critical path and which activities have plenty of float. The review reveals several activities have suffered less than planned productivity and have contributed to falling behind. In the process of this review, you and Rita also review the budget for Project JP-114 and notice not only the schedule has fallen behind but the cost to date is more than she had expected. To total budget is $150,000, planned to date is $30,000; expended to date is $37,000.

With nine months remaining until baseline contract completion, Rita needs to bring Project JP-114 back on track; knowing overtime for an extended period of time is not always the right answer, especially with the cost to date already over planned.

In order to truly understand the options available to help remedy the current situation, you and Rita brainstorm on several potential courses of action. All the potential courses of action will require an evaluation of budget impact versus schedule correction.

1) Pull the project team together and ensure everyone understands which activities are on the critical path. Rita would like to use the existing project team and focus them on these critical path activities, laying out a plan for periodic overtime when needed to crunch through a deliverable. This approach could add approximately 20% to the budget.
2) Outsource various modules of activities to qualified and known consultants. This could drive up the costs and must be evaluated before implemented. Having an outside source working in parallel with the project team could also accelerate the schedule to mitigate some of the delays, as well as keep overtime down to a minimum for the project team. Potentially this could add as much as 40% to the budget, but could also be very productive schedule wise.
3) Mandatory overtime for the project team - entire project goes on a 50-hour work week. If the entire project team works overtime for an extended period of time, the budget could see an additional 60% increase.
4) The project continues as is completes the project late and accepts the penalties imposed. Penalties imposed for late delivery could add as much as 50% to the budget.

Assignment
Draft a proper memorandum to Desmond Raybum, IS Director, explaining in your own words:

the current problem and potential impact(s);
each course of action, stating advantages and disadvantages as appropriate;
your recommendations, properly supported.
Please be sure to include the rationale for your recommendations. Be sure to summarize your thoughts and address (To, From, Date, and Subject/Project Name) and close the memo appropriately.
If you are uncomfortable with the courses of action noted, provide your own with appropriate substantiation for your position. Limit your answer to one, full typewritten page (roughly three handwritten pages).
While your email can be a detailed as you like, be sure to write sufficiently to address each element of the assignment, yet not so long that you go beyond the scope of the exercise.
Take time to read the problem and consider what you want Evan to say. Good luck!
The answer is pending.

Answer(s): D

Reveal Solution Next Question

QUESTION: 58

Scenario:
The entire network consists of the following activities and relationships. Activity A is twenty days long and is tied to Activity B, a ten-day activity, with a finish-to-finish tie with a lag value of five Activity B is tied to Activity C, a twenty-day activity, with a start-to-start relationship with a lag value of five.

PSP Activities Table
Scope Known about Rock-Filled Dam Project:
The dam requires river diversion and work over two or more rainy seasons. The contract is lump sum, competitively bid, and will be self-performed. The owner has attempted to shift all risk to the contractor by employing "no differing sit conditions" and "no damage for delay" clauses. There is a bonus/penalty provision of $2,500 per calendar day for early or late delivery. The early completion bonus is capped at $500,000, with no cap for late delivery penalty. Liquidated damages end at the finish of demobilization. Indirect costs per calendar day are $2,800 for the "normal" schedule and $3,200 for the "crashed" schedule. The winter/wet weather season is 151 days between October 15 and March 25 of each year, reduces the efficiency of the contractor's operations by 20% and costs the contractor $10,000 per day. Assume a start date of March 5, 2001 and use a 7-day work week.
The following table lists work activities as planned by the contractor.

Theoretically construct a summary activity for only those activities with a finish-to-start relationship for Activities 8001 through 10001. Using the "normal" schedule, what is the cost of this hammock?