Toys City Inc.

1217 Words Aug 31st, 2014 5 Pages
LGT 3105 Operation Management – Case Assignment 1 (Toys City Inc.)


1. I would have accommodated David Cheung’s vacation request.


It is because based on the Critical Path Method (CPM), the network diagram of the work of different audit areas comes as Figure 1, and we can find that the critical path which is the series of activities using the longest time to complete is Activity 1-2-5-7-10-13-15. It means that if there is any delay on Activity 1, 2, 5, 7, 10, 13, 15, the whole project would be delayed also. However, David is only responsible on the auditing of liquid assets which is Activity 4 which is not in the critical path. The vacation or delay made by David would not affect the progress of the whole project.
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Activity 7 requires $18.6667 to reduce 1 duration hour.
Activity 9 requires $10 to reduce 1 duration hour.
Activity 12 requires $50 to reduce 1 duration hour.
Activity 13 requires $120 to reduce 1 duration hour.
Activity 14 requires $50 to reduce 1 duration hour.
[pic]Figure 2
In order to meet the accelerating deadline which is 60 hours earlier at minimum additional cost, we should first look at the network diagram and the critical path.
From Figure 1, we know that the critical path is Activity 1-2-5-7-10-13-15. It is because if there is any change of time in the Activities on the critical path, the whole progress time of the project will change. Therefore, we choose to crash the activities on the critical path with the lowest crash cost in order to lower the time used with minimum additional cost. Activity 7 has the lowest crash cost within the Activities on the critical path. So, we choose to crash Activity 7 first.
Although Activity 7 can crash for 45 hours, we cannot crash all the hours. It is because when Activity 7 crash to 50 hours, a new critical path is created.
[pic]Figure 3

After crashing Activity 7 to reduce 43 hours by using $802.6681 ($18.6667*43), now another new critical path Activity 1-2-5-8-9-12-14-15 is created.








It has just reduced 43 hours and there are still 17 hours to go. Now, there are 2 critical paths and we need to find the combination…