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APPENDIX TWO

Computer Project Exercises

In developing the exercises, trade-offs had to be made to enrich the learning experience. One of the major problems students initially encounter is data and detail over-load. This reduces their ability to identify project and data problems and to compare alternatives. Although the project found in the exercises is real, it has been reduced and detail has been eliminated many times to concentrate on applying project management principles and understanding linkages. In addition, other simplifying assumptions have been made so that students and instructors can trace problems and discuss outcomes. These assumptions detract from reality, but they keep the focus on the objectives of the exercises and reduce student frustration with software intricacies. Moving from these exercises to real projects is primarily one of increasing detail.

The POM+ Project*

Big Kola Company has been concerned that specialized fruit drinks have been eroding their cola market. The CEO mandates that “If you can’t beat them, join them.” Grape juice was the first product that was successful after an advertising blitz claiming the antitoxin benefits. Lately, competition is compressing grape juice margins and profits. Months of additional market surveys and focus groups have resulted in three potential high-margin drinks: cranberry, blueberry, and pomegranate. All these choices represent antitoxins. The decision is to produce the pomegranate drink that has many health claims. For example, the relative ability of these juices to eliminate harmful free radicals (antitoxins) is 71 percent for pomegranate, 33 percent for blueberry, and 20 percent for cranberry (Technion Institute of Technology). The market potential appears very attractive and should have a higher profit margin than the other potential juice products. Another appeal for pomegranate juice is its familiarity in the Middle East and Asia.

The Priority Matrix for the POM+ Project is:

  Time Scope Cost
Constrain     X
Enhance   X  
Accept X    

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Connor Gage, the project manager, has formed his project team and the members have come up with the following work breakdown structure.

Part 1

  1. Develop the WBS outline using the software available (save your file).

  2. Use this file and the information provided below to create a project schedule.

  3. The following holidays are observed: January 1, Martin Luther King Day (third Monday in January), Memorial Day (last Monday in May), July 4th, Labor Day (first Monday in September), Thanksgiving Day (4th Thursday in November), December 25 and 26.

  4. If a holiday falls on a Saturday then Friday will be given as an extra day off, and if it falls on a Sunday then Monday will be given off.

  5. The project team works eight-hour days, Monday through Friday.

  6. The project will begin on January 3, 2012.

  7. Based on this schedule, submit a memo that answers the following questions:

    1. When is the project estimated to be completed? How many working days will it take?

    2. What is the critical path?

    3. Which activity has the most total slack?

    4. How sensitive is this network?

    5. Identify two sensible milestones and explain your choice.

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Include the following (one page) printouts:

Hint: Change the timescale to months and weeks. The estimated duration of the project is 135 days.

Remember: Save your files for future exercises!

The following information has been derived from the WBS. Note that the activity number is what appears in the software with the complete WBS entered.

#* Activity Duration Predecessor(s)
3 Need survey 20 None
4 Set product specs 15 3
5 Shelf life report 10 4
6 Nutrition report  5 4
7 Select fruit suppliers 20 5, 6
9 Equipment rehab 30 4
10 Production trials 15 7, 9
11 Quality trials 20 10
12 Quality metrics  5 11
13 Quality training 15 12
15 Market testing 30 5, 6
16 Package design 15 15
17 Select distributors 25 5, 6
19 Complete FDA certification 15 7, 15
20 Register trademark  5 7, 15
21 Prepare product launch 15 13, 16, 17, 19FS + 25 days, 20FS + 15 days

FS = Finish to Start lag.

Part 2

Remember the old saying, “A project plan is not a schedule until resources are committed.” This exercise illustrates this sometime subtle, but important point.

Using your files from Part 1, input resources and their costs if you have not already done so. All information is found in Tables A2.1 and A2.2.

TABLE A2.1 Resource Assignments

Activity Resources
Need survey MRKT (500%)
Set product specs R&D (400%), MRKT (200%)
Shelf life report R&D (300%)
Nutrition report R&D (300%)
Select fruit suppliers PURCH (100%)
Equipment rehab ENG (1,000%), PROD (2,000%)
Production trials PROD (1,500%), PURCH (100%), ENG (1,000%)
Quality trials QUAL (300%), PROD (500%)
Quality metrics QUAL (300%), PROD (100%)
Quality training QUAL (300%), PROD (1,500%)
Market testing MRKT (500%)
Package design DESIGN (300%), MRKT (100%)
Select distributors MRKT (500%)
Complete FDA certification LEGAL (300%)
Register trademark LEGAL (300%)
Prepare product launch QUAL (300%), PURCH (200%), PROD (1,500%), MRKT (500%), ENG (500%), R&D (100%)

TABLE A2.2 Resources Availability and Pay Rates

Resource Abbrev Available Hourly rate
Marketing staff MRKT  5 $ 80/hr
R&D R&D  5 $ 80/hr
Engineering ENG 10 $100/hr
Purchasing PURCH  2 $ 60/hr
Quality engineers QUAL  3 $ 80/hr
Designers DESIGN  3 $ 60/hr
Legal staff LEGAL  3 $120/hr
Production PROD 20 $ 60/hr

Prepare a memo that addresses the following questions:

  1. Which if any of the resources are overallocated?

  2. Assume that the project is time constrained and try to resolve any overallocation problems by leveling within slack. What happens?

  3. What is the impact of leveling within slack on the sensitivity of the network?

Include a Gantt chart with the schedule table after leveling within slack.

  1. Assume the project is resource constrained and resolve any overallocation problems by leveling outside of slack. What happens?

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Include a Gantt chart with the schedule table after leveling outside of slack.

Note: No splitting of activities is allowed.

Note: No partial assignments (e.g., 50 percent). All resources must be assigned 100 percent.

Part 3

Top management has accepted the July 19th completion schedule created at the end of Part 2. Prepare a brief memo that addresses the following questions:

  1. How much will the project cost? What is the most expensive activity?

  2. What does the cash flow statement tell you about how costs are distributed over the life span of the project?

Include a monthly cash flow for the project.

Once you are confident that you have the final schedule, save the file as a baseline.

Hint: Save a backup file just in case without baseline!

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Part 4 A

Assume that today is March 31, 2012, and Table A2.3 contains the tracking information for the project up till now. Enter this information into your saved baseline file and prepare a status report for the first three months of the POM+ project.

TABLE A2.3 Status Report March 31, 2012

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Your status report should also address the following questions:

  1. How is the project progressing in terms of cost and schedule?

  2. What activities have gone well? What activities have not gone well?

  3. What do the PCIB and PCIC indicate in terms of how much of the project has been accomplished to date?

  4. What is the forecasted cost at completion (EACf)? What is the predicted VACf?

  5. Report and interpret the TCPI for the project at this point in time.

  6. What is the estimated date of completion?

  7. How well is the project doing in terms of its priorities?

Try to present the above information in a form worthy of consideration by top management.

Include an Earned Value table and a Tracking Gantt Chart.

Note: Insert March 31, 2012, as the status date in the Project Information box.

Part 4 B

Assume that today is May 31, 2012, and Table A2.4 contains the tracking information for the project up till now. Enter this information into your saved baseline file and prepare a status report for the POM + project.

TABLE A2.4
Status Report May 31, 2012

Images

Your status report should address the following questions:

  1. How is the project progressing in terms of cost and schedule?

  2. What activities have gone well? What activities have not gone well?

  3. What do the PCIB and PCIC indicate in terms of how much of the project has been accomplished to date?

  4. What is the forecasted cost at completion (EACf)? What is the predicted VACf?

  5. Report and interpret the TCPI for the project at this point in time.

  6. What is the estimated date of completion?

  7. How well is the project doing in terms of its priorities?

Try to present the above information in a form worthy of consideration by top management.

Include an Earned Value table and a Tracking Gantt Chart.

Note: Insert May 31, 2012, as the status date in the Project Information box.

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Red Zuma Project

The ARC Company specializes in developing and selling a wide range of high-quality scooters. Sales representatives report that there is a growing demand for racing scooters. ARC’s president, Robin Lane, is excited about the possibilities and predicts that one day these kinds of razor scooters will be featured in X-Game events. ARC is a small company and uses a strong matrix to optimally utilize limited manpower.

The Project Priority Matrix for the Red Zuma Project is:

  Time Scope Cost
Constrain   X  
Enhance X    
Accept     X

Part 1

You are a member of a project team assigned to develop the new razor scooter code named “Red Zuma.” Table A2.5 contains the information necessary to create a project schedule. For the purpose of this case assume the following:

  1. The project begins January 2, 2015.

  2. The following holidays are observed: January 1, Martin Luther King Day (third Monday in January), Memorial Day (last Monday in May), July 4th, Labor Day (first Monday in September), Thanksgiving Day (4th Thursday in November), December 25.

  3. If a holiday falls on a Saturday, then Friday will be given as an extra day off, and if it falls on a Sunday, then Monday will be given as a day off. If December 25th falls on a Friday then Monday will not be given a day off.

  4. The project team works eight-hour days, Monday through Friday.

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TABLE A2.5 Red Zuma: Project Schedule

ID Task Name Duration Predecessors
1 1 Red Zuma Project 260 days  
2 1.1 Market Analysis 25 days  
3 1.2 Product Design 30 days 2
4 1.3 Manufacturing Study 20 days 2
5 1.4 Product Design Selection 10 days 3, 4
6 1.5 Detailed Marketing Plan 15 days 5
7 1.6 Manufacturing Process 30 days 5
8 1.7 Detailed Product Design 45 days 5
9 1.8 Build Prototypes 25 days 8
10 1.9 Lab Test Prototypes 10 days 9
11 1.10 Field Test Prototypes 15 days 9
12 1.11 Finalized Product Design 20 days 7,10,11
13 1.12 Final Manufacturing Process 10 days 12
14 1.13 Order Components 7 days 12
15 1.14 Order Production Equipment 14 days 13
16 1.15 Install Production Equipment 35 days 14FS+20 days,15FS+30 days
17 1.16 Celebrate 1 days 6, 16

Note: FS refers to a Finish-to-Start lag.

Construct a network schedule for this project and prepare a memo that answers the following questions:

  1. When is the project estimated to be completed? How long will the project take?

  2. What is the critical path for the project?

  3. Which activity has the greatest amount of slack?

  4. How sensitive is this network?

  5. Identify two sensible milestones and explain your choices.

Include the following printouts:

Part 2

The following personnel have been assigned full-time to the Red Zuma project team:

Use the file from Part 1 and the information contained in Tables A2.6 and A2.7 to assign resources to the project schedule.

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TABLE A2.6
Red Zuma Project Resources

  $ Number available
Marketing specialist $80,000/yr 4
Design engineer $125,000/yr 4
Development engineer $110,000/yr 4
Industrial engineer $100,000/yr 4
Purchasing agent $75,000/yr 2
Test rider $70/hr 4

Note: MS Project considers resources in terms of percentages with one full-time worker being 100%.

TABLE A2.7 Red Zuma Resource Assignments

Task Name Resource Names
Red Zuma Project  
Market Analysis Marketing Specialist [400%]
Product Design Marketing Specialist, Design Engineer [400%], Development Engineer [200%], Industrial Engineer, Purchasing Agent
Manufacturing Study Industrial Engineer [400%], Development Engineer [200%]
Product Design Selection Marketing Specialist [200%], Design Engineer [300%], Development Engineer [200%], Industrial Engineer [200%], Purchasing Agent [25%]
Detailed Marketing Plan Marketing Specialist [400%]
Manufacturing Process Design Engineer, Development Engineer [200%], Industrial Engineer [300%]
Detailed Product Design Marketing Specialist [200%], Design Engineer [400%], Development Engineer [200%], Industrial Engineer [200%], Purchasing Agent [25%]
Build Prototypes Design Engineer [200%], Development Engineer [200%], Industrial Engineer [400%]
Lab Test Prototypes Design Engineer [200%], Development Engineer [200%], Test Rider
Field Tests Marketing Specialist, Design Engineer [200%], Development Engineer, Industrial Engineer, Test Rider [300%]
Finalized Product Design Marketing Specialist [200%], Design Engineer [300%], Development Engineer [300%], Industrial Engineer [200%], Purchasing Agent [25%]
Final Manufacturing Process Industrial Engineer [300%], Design Engineer, Purchasing Agent [25%]
Order Components Purchasing Agent
Order Production Equipment Purchasing Agent
Install Production Equipment Design Engineer, Development Engineer [300%], Industrial Engineer [400%]
Celebration Design Engineer [400%], Development Engineer [400%], Industrial Engineer [400%], Marketing Specialist [400%], Purchasing Agent [200%]

Note: Resource assignments without brackets are 100%.

Part A

Prepare a memo that addresses the following questions:

  1. Which if any of the resources are overallocated?

  2. Assume that the project is time constrained and try to resolve any overallocation problems by leveling within slack. What happens?

  3. What is the impact of leveling within slack on the sensitivity of the network?

Include a Gantt chart with the schedule table after leveling within slack.

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  1. Assume that the project is resource constrained and no additional personnel are available. How long will the project take given the resources assigned? (Hint: Undo leveling performed in Part A before answering this question.)

Note: No splitting of activities is allowed.

  1. How does the new duration compare with the estimated completion date generated from Part 1? What does this tell you about the impact resources can have on a schedule?

Include a Gantt chart with a schedule table displaying free and total slack depicting the resource-constrained schedule.

Part B

Top management is not happy with the resource-constrained schedule. Robin Lane, the president, has promised retailers that ARC will begin production in time for the major trade show in Las Vegas on January 22, 2016, which means the project needs to be completed by January 17, 2016. She has authorized working the first available Saturday of each month to help the project get completed sooner. She realizes that this will only reduce the project duration by 12–13 days.

After talking to the engineers, everyone agrees that they do not have to wait for the Detailed Product Design to be 100% completed before starting to build the prototype. The consensus is that Building the Prototype can start 30 days after the start of the Detailed Product Design. Likewise the Final Manufacturing Process can start 15 days after the start of Finalized Product Design.

Dewey Martin, director of product development, is also willing to add personnel to the project. He is willing to make available at least one more Development, Design, and/or Industrial Engineer to the project as well as Marketing Specialist. Since there is an acute shortage of personnel at ARC he requests that you only use additional manpower that will help meet the deadline. Your objective is to develop a schedule that will satisfy the deadline with minimum additional resource usage.

Prepare a memo that addresses the following questions:

  1. What was the impact of introducing Start-to-Start lags to the schedule and budget?

  2. Which, if any additional personnel assignments, would you choose to complete the project before the January 17th deadline? Explain your choices as well as the reasons for not choosing other options.

  3. How have these changes affected the sensitivity of the network and the critical path?

Include a Gantt chart with a schedule table displaying free and total slack for the new schedule.

Note: Do not assign new personnel to specific tasks, simply add them to the Resource Sheet. All new personnel are available full time (100%).

At first glance—this appears to be a very complicated, difficult assignment, but if you enter the information correctly, the computer is able to generate the answers with a few simple clicks.

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Part 3

Top management has accepted the schedule created at the end of Part 2. Prepare a brief memo that addresses the following questions:

  1. How much will the project cost? What is the most expensive activity?

  2. What does the cash flow statement tell you about how costs are distributed over the life span of the project?

Include a monthly cash flow for the project.

Once you are confident that you have the final schedule, save the file as a baseline.

Hint: Save a backup file just in case without baseline!

Part 4

Part A

Today’s date is July 8, 2015, the milestone date for the completion of the Prototype. You are charged with preparing a status report for top management. Table A2.8 summarizes progress on the Red Zuma project.

TABLE A2.8 Red Zuma Project Update

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Submit a professional status report to Robin Lane that addresses the following questions:

  1. How is the project progressing in terms of cost and schedule?

  2. What activities have gone well? What activities have not gone well?

  3. How much of the project has been accomplished (PCIB)?

  4. What is the forecasted cost at completion (EACf)?

  5. What is the estimated completion date?

  6. How is the project doing in terms of priorities (see Part 1)?

Report and interpret relevant Earned Value metrics in your report.

Include a Tracking Gantt chart as well as an Earned Value Table with your memo.

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Part B

You have told Robin Lane that based on what you know now you need to revise the estimates for some of the remaining activities. Finalized Product Design is expected to take 3 days longer than planned. Final Manufacturing Process is expected to take 2 days less than planned, while Install Production Equipment is now expected to take only 30 days. You also report that Detailed Marketing plan will be completed before the end of the New Year. She is insisting that the project be completed by January 17th in order to be ready for the Las Vegas show. She is willing to spend $50,000 from Management Reserves to expedite shipping if necessary. $25,000 would reduce the shipping of components by 5 days and/or $25,000 would reduce the shipping of manufacturing parts by 5 days (Hint: Adjust lag). Prepare a memo to Robin that addresses the following questions:

  1. What is the impact of the revised estimates for Finalized Product Design and Install Production Equipment on the project schedule and cost?

  2. Would you recommend authorizing the expenditure of $50,000? Explain.

  3. What, if any other recommendations, would you make so that the project can achieve Robin’s deadline? Justify your recommendations.

Include a Tracking Gantt chart with variance schedule that depicts your final recommendations and revised schedule.

Hint: After adjusting the Installation of Production Equipment and Finalized Product Design, level outside of slack to eliminate any resource over allocation problems.

Conveyor Belt Project

Part 1

Project Description

The new computer-controlled conveyor belt is an exciting project that moves and positions items on the conveyor belt within <1 millimeter. The project will produce a new system for future installations, and for replacement of those in the field, at a low cost. The computer-controlled conveyor belt has the potential to be a critical unit in 30 percent of the systems installed in factories. The new system is also easier to update with future technologies.

The Project Priority Matrix for the Conveyor Belt Project (CBP) is:

  Time Scope Cost
Constrain X    
Enhance   X  
Accept     X

Table A2.9 has been developed for you to use in completing the project exercises.

TABLE A2.9
Conveyor Belt Project; WBS

Conveyor Belt Project  
Hardware

Hardware specifications

Hardware design

Hardware documentation

Prototypes

Order circuit boards

Assemble preproduction models
Operating system

Kernel specifications

Drivers

    Disk drivers

    Serial I/O drivers

Memory management

Operating system documentation

Network interface
Utilities

Utilities specifications

Routine utilities

Complex utilities

Utilities documentation

Shell
System integration

Architectural decisions

Integration first phase

System hard/software test

Project documentation

Integration acceptance testing

Assignment

Develop the WBS outline using the software available to you.

Question

Does this information (WBS) allow you to define any milestones of the project? Why or why not? What are they?

Remember: Save your file for future exercises!

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Part 2

Use your file from Part 1 and the information provided below to complete this exercise. (See Table A2.10.)

  1. Each work package will represent an activity.

  2. The project begins January 4, 2010.

  3. The following holidays are observed: January 1, Memorial Day (last Monday in May), July 4th, Labor Day (first Monday in September), Thanksgiving Day (4th Thursday in November), December 25 and 26.

  4. If a holiday falls on a Saturday then Friday will be given as an extra day off, and if it falls on a Sunday, then Monday will be given as a day off.

  5. The project teams work eight-hour days, Monday through Friday.

Warning: Experience has taught students to frequently make separate backup files for each exercise. The software is never as friendly as users expect!

Construct a network schedule for the conveyor belt project and prepare a memo that addresses the following questions:

  1. When is the project estimated to be completed? How long will the project take?

  2. What is the critical path(s) for the project?

  3. Which activity has the greatest amount of slack?

  4. How sensitive is this network?

  5. Identify two sensible milestones and explain your choices.

  6. Compare the advantages/disadvantages of displaying the schedule as a network versus a Gantt chart.

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TABLE A2.10 Conveyor Belt Project; Schedule

Images

Note: F-S refers to a Finish-to-Start lag.

Include the following printouts:

Hint: The project should be completed in 530 days.

Remember: Save your file for future exercises!

Part 3

Remember the old saying, “A project plan is not a schedule until resources are committed.” This exercise illustrates this subtle, but very important, difference.

Part A

Using your files from Part 2 input resources and their costs if you have not already done so. All information is found in Tables A2.10 and A2.11.

TABLE A2.11
Organization Resources

Name Group Cost ($/hr)
Design R&D (2 teams) $100
Development R&D (2 teams)  70
Documentation R&D (1 team)  60
Assembly/test R&D (1 team)  70
Purchasing Procurement (1 team)  40

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Prepare a memo that addresses the following questions:

  1. Which if any of the resources are overallocated?

  2. Assume that the project is time constrained and try to resolve any overallocation problems by leveling within slack. What happens?

  3. What is the impact of leveling within slack on the sensitivity of the network?

Include a Gantt chart with the schedule table after leveling within slack.

  1. Assume the project is resource constrained and resolve any overallocation problems by leveling outside of slack. What happens? What are the managerial implications?

  2. What options are available at this point in time?

Include a Gantt chart with the schedule table after leveling outside of slack.

Note: No splitting of activities is allowed.

Note: No partial assignments (e.g., 50 percent). All resources must be assigned 100 percent.

Part B

When you show the resource-constrained network to top management, they are visibly shaken. After some explanation and negotiation they make the following compromise with you:

Internal Development

Add as many development units (teams) as needed to stay within the 530 days. If you need more than two internal development units, then hire as few external teams as necessary. Select the cheapest possibility! Change as few activities as possible. It is recommended you keep work packages that require cooperation of several organizational units inside your company. You decide how best to do this.

Hint: Undo leveling prior to adding new resources.

Once you have obtained a schedule that meets the time and resource constraints, prepare a memo that addresses the following questions:

  1. What changes did you make and why?

  2. How long will the project take?

  3. How did these changes affect the sensitivity of the network?

Include a Gantt chart with a schedule table presenting the new schedule.

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Part 4

Based on the file created at the end of Part 3, prepare a memo that addresses the following questions:

  1. How much will the project cost?

  2. What does the cash flow statement tell you about how costs are distributed over the life span of the project?

Include a monthly cash flow and a cost table for the project.

Once you are confident that you have the final schedule, save the file as a baseline.

Hint: Save a backup file just in case without baseline!

Part 5

Prepare status reports for each of the first four quarters of the project given the information provided here. This requires saving your resource schedule as a baseline and inserting the appropriate status report date in the program. Assume that no work has been completed on the day of the status report.

Your status report should include a table containing the PV, EV, AC, BAC, EAC, SV, CV, and CPI for each activity and the whole project. The report should also address the following questions:

  1. How is the project progressing in terms of cost and schedule?

  2. What activities have gone well? What activities have not gone well?

  3. What do the PCIB and PCIC indicate in terms of how much of the project has been accomplished to date?

  4. What is the forecasted cost at completion (EACf)? What is the predicted VACf?

  5. Report and interpret the TCPI for the project at this point in time.

  6. What is the estimated date of completion?

  7. How well is the project doing in terms of its priorities?

Try to present the above information in a form worthy of consideration by top management.

Include a Tracking Gantt chart with each report.

First Quarter, April 1, 2010

Table A2.12 summarizes the information regarding activities accomplished to date.

TABLE A2.12
April 1, 2010

Images

Be sure to save your file after each quarterly report and use it to build the next report!

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Second Quarter, July 1, 2010

Table A2.13 summarizes the information regarding activities accomplished since the last report.

TABLE A2.13
July 1, 2010

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* The project manager for the external development team that was hired to perform routine utilities reported that due to commitments to other clients they would be able to start on that activity 4/26/10.

Third Quarter, October 1, 2010

Table A2.14 summarizes the information regarding activities accomplished since the last report.

TABLE A2.14
October 1, 2010

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Fourth Quarter, January 1, 2011

Table A2.15 summarizes the information regarding activities accomplished since the last report.

TABLE A2.15 January 1, 2011

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Part 6

You have received revised estimates for the remaining activities at the end of the fourth quarter:

Prepare a memo that addresses the following questions:

  1. What is the new EAC for the project? How long should the project take given these revised estimates?

  2. How happy will top management be with these forecasts given the priorities of the project?

  3. What recommendations would you make?

Include a revised schedule, a Tracking Gantt chart, and cost table with your memo.

*Cliff Gray, Erik Larson, & Pinyarat Sirisomboonsuk, doctoral candidate at Rawls College of Business, Texas Tech University.