1. Draw a network diagram for this project. Identify the four "near-critical" paths through the network diagram.

2. Find the probability that the project can be completed within 30 months. What is the probability that the project will take longer than 40 months? What is the probability that the project will take between 30 and 40 months?

3. Use Crystal Ball@ (or another simulation package) to simulate the completion of this project 10,000 times, assuming that activity times follow a triangular distribution. Estimate the mean and standard deviation of the project completion time. Compare your result to your answer to Question 2.

4. What types of information does Nutri-Sam's top management need that relate to the schedule to decide if they should approve this project at the end of the plan definition phrase.

5. Will the project owner be helpful for this project? If so, with what aspects?

Nutri-Sam: The Latin American Expansion Decision Nutri-Sam produces a line of vitamins and nutritional supple- consists of four major activities that are completed more or less ments. It recently introduced its Nutri-Sports Energy Bar, which concurrently: defining the project scope, developing a broad is based on new scientific findings about the proper balance of schedule of activities, developing detailed cost estimates, and macronutrients. The energy bar has become extremely popular developing a plan for staffing. among elite athletes and others. One distinguishing feature of The output of this phase is a detailed plan and proposal for the Nutri- Sports Energy Bar is that each bar contains 50 mg management specifying how much the project will cost, how of eicosapentaenoic acid (EPA), a substance strongly linked to long it will take, and what the deliverables are. reducing the risk of cancer but found in only a few foods, such If the project gets management's approval and as salmon. Nutri-Sam was able to include EPA in its sports bars management provides the appropriations, the project prog- because it had previously developed and patented a process to resses to the third phase, design and construction. This refine EPA for its line of fish-oil capsules. phase consists of four major activities: detailed engineering, Because of the success of the Nutri-Sports Energy Bar in mobilization of the construction employees, procurement of the United States, Nutri-Sam is considering offering it in Latin production equipment, and construction of the facility. Typ- America. With its domestic facility currently operating at ically, the detailed engineering and the mobilization of the capacity, the president of Nutri-Sam has decided to investigate construction employees are done concurrently. Once these the option of adding approximately 10,000 square feet of produc- activities are completed, construction of the facility and pro- tion space to its facility in Latin America at a cost of $5 million. curement of the production equipment are done concurrently. The project to expand the Latin American facility involves The outcome of this phase is the physical construction of four major phases: (1) concept development, (2) definition the facility. of the plan, (3) design and construction, and (4) start-up and The final phase, start-up and turnover, consists of four major turnover. During the concept development phase, a project activities: prestart-up inspection of the facility, recruiting and owner is chosen to oversee all four phases of the project and training the workforce, solving start-up problems, and deter- is given a budget to develop a plan. The outcome of the con- mining optimal operating parameters (called centerlining). cept development phase is a rough plan, feasibility estimates for Once the prestart-up inspection is completed, the workforce is recruited and trained at the same time that start-up problems the project, and a rough schedule. Also, a justification for the project and a budget for the next phase are developed. are solved. Centerlining is initiated upon the completion of In the plan definition phase, the project owner selects a PM to these activities. The desired outcome of this phase is a facility oversee the activities associated with this phase. Plan definition operating at design requirements. (continued) The following table provides optimistic, most likely, and pessimistic time estimates for the major activities. Optimistic time (months) Most likely time (months) 12 Pessimistic time (months) 24 3 1 2 12 0.25 0.5 1 0.2 0.3 0.5 0.2 0.3 0.6 Activity A: Concept development Plan definition B: Define project scope C: Develop broad schedule D: Detailed cost estimates E: Develop staffing plan Design and construction F: Detailed engineering G: Facility construction H: Mobilization of employees 1: Procurement of equipment Start-up and turnover J: Prestart-up inspection K: Recruiting and training L: Solving start-up problems M: Centerlining 2 6 3 12 8 24 0.5 2 4 1 3 12 0.25 0.5 1 0.25 0.5 1 0 1 2 0 1 4 Questions 1. Draw a network diagram for this project. Identify the four "near-critical" paths through the network diagram. 2. Find the probability that the project can be completed within 30 months. What is the probability that the project will take longer than 40 months? What is the probability that the project will take between 30 and 40 months? 3. 'Use Crystal Ball (or another simulation package) to sim- ulate the completion of this project 10,000 times, assuming that activity times follow a triangular distribution. Estimate the mean and standard deviation of the project completion time. Compare your results to your answer to Question 2. 4. What types of information does Nutri-Sam's top manage- ment need that relate to the schedule to decide if they should approve this project at the end of the plan defini- tion phase? 5. Will the project owner be helpful for this project? If so, with what aspects