Operations and Supply Chain Management The Core

PROJECTS chapter 5 139
group will consider. During this meeting, you will split your group in half: Two people will
be responsible for the annual report and ratio analysis, and the other two will collect the
technical data and construct the charts. Your group expects it to take two weeks to get the
annual report and perform the ratio analysis, and a week to collect the stock price data and
generate the charts. You agree that the two groups can work independently. Finally, you
agree to meet as a team to make the purchase decision. Before you meet, you want to allow
one week for each team member to review all the data.
This is a simple project, but it will serve to demonstrate the approach. The following are
the appropriate steps:
1. Identify each activity to be done in the project and estimate how long it will
take to complete each activity. This is simple, given the information from your
instructor. We identify the activities as follows: A(1), B(2), C(1), D(1). The number
is the expected duration of the activity.
2. Determine the required sequence of activities and construct a network
reflecting the precedence relationships. An easy way to do this is to first identify
the immediate predecessors associated with an activity. The immediate
predecessors are the activities that need to be completed immediately before an
activity. Activity A needs to be completed before activities B and C can start. B
and C need to be completed before D can start. The following table reflects what
we know so far:
ACTIVITY
DESIGNATION
IMMEDIATE
PREDECESSORS
TIME
(WEEKS)
Select company A None 1
Obtain annual report and perform ratio analysis B A 2
Collect stock price data and perform technical analysis C A 1
Review data and make a decision D B and C 1
Here is a diagram that depicts these precedence relationships:
Immediate
predecessors
Activities that need
to be completed
immediately before
another activity.
Report and Ratio Analysis
Select
Company
B(2)
Make
Decision
A(1)
D(1)
C(1)
Technical Analysis
3. Determine the critical path. Consider each sequence of activities that runs from
the beginning to the end of the project. For our simple project there are two paths:
A–B–D and A–C–D. The critical path is the path where the sum of the activity
times is the longest. A–B–D has a duration of four weeks and A–C–D has a duration
of three weeks. The critical path, therefore, is A–B–D. If any activity along the
critical path is delayed, then the entire project will be delayed.
4. Determine the early start/finish and late start/finish schedule. To schedule
the project, find when each activity needs to start and when it needs to finish.