Case Problem Moore HOUSING CONTRACTORS completed within 45 days after it is started. If a house is not completed within this time frame, it wants to be Moore Housing Contractors is negotiating a deal with able to charge the contractor a penalty. Mary and Sandy Moore, the president and vice president, respectively, of Countryside Realtors to build six houses in a new devel Moore Contractors, are concerned about the prospect of a opment. Countryside wants Moore Contractors to start in penalty charge. They want to be very confident that they late winter or early spring, when the weather begins to can meet the deadline for a house before they enter into moderate, and build on through the summer and into the any kind of agreement with a penalty involved. (If there fall. The summer months are an especially busy time for is a reasonable likelihood that they cannot finish a house the realty company, and it believes it can sell the houses within 45 days, they want to increase their bid to cover almost as soon as they are ready, and maybe even before. potential penalty charges.) The houses all have similar floor plans and are of approxi The Moores are experienced home builders, so it was mately equal size; only the exteriors are noticeably dif not difficult for them to list the activities involved in build- ferent. The completion time is so critical for Countryside ing a house or to estimate activity times. However, they Realtors that it is insisting that a project management made their estimates conservatively and tended to increase network accompany the contractor's bid for the job, their pessimistic estimates to compensate for the possibil- with an estimate of the completion time for a house. ity of bad weather and variations in their workforce. A list The realtor also needs to be able to plan its offerings of the activities involved in building a house and the activ- and marketing for the summer. It wants each house to be ity time estimates follow on the next page. 414 CHAPTER 8 PROJECT MANAGEMENT Time (days) a m b Activity Predecessor Activity 3 4 3 6 a b d c f 2 2 2 g h i a b b b e e f f cg i j, h, k 1 n d, o m 4 Activity Description Excavation, pour footers Lay foundation Frame and roof Lay drain tiles Sewer (floor) drains Install insulation Pour basement floor Rough plumbing, pipes Install windows Rough electrical wiring Install furnace, air conditioner Exterior brickwork Install plasterboard, mud, plaster Roof shingles, flashing Attach gutter, downspouts Grading Lay subflooring Lay driveway, walks, landscape Finish carpentry Kitchen cabinetry, sink, and appliances Bathroom cabinetry, fixtures Painting (interior and exterior) Finish wood floors, lay carpet Final electrical, light fixtures k 1 8 10 12 m 6 8 3 2 3 n 0 9 3 5 6 2 1 2 3 4 3 2 2 4 2 1 5 7 6 10 12 r 6 5 9 9 9 tu 3 6 6 10 8 Vs V 3 4 a. Develop a CPM/PERT network for Moore Housing Contractors and determine the probability that the company can complete a house within 45 days. Does it appear that the Moores might need to increase their bid to compensate for potential penalties? b. Indicate which project activities Moore Housing Contractors should be particularly diligent to keep on schedule by making sure workers and materials are always available. Also indicate which activities the company might shift workers from as the need arises