Project Management Critical Path Method

The network below represents a project being analyzed by the critical path method. Activity durations in weeks, are given in the following table and required that a the network diagram be drawn:

Activity	Preceding	Duration
A	--	9
B	A	2
C	A	12
D	A	5
E	B	6
F	B	8
G	C, F	3
H	D	2
I	H	8
J	G, I	6
K	E, J	2

1. Draw the network diagram.

2. Which activities form the critical path?

3. How much slack exists at activities A and F?

4. What is the duration of the critical path?

PRODUCTION & OPERATIONS MANAGEMENT

Qustion

The Jamaican firm produces three other products that are not in their Health Care line. Product A sells for $60; its variable costs are $20. Product B sells for $200; its variable costs are $120. Product C sells for $25; its variable costs are $10. Last year, the firm sold 1000 units of A, 2000 units of B, and 10,000 units of C.

The firm has fixed costs of $320,000 per year. Calculate the break-even point of the firm

Productivity

1. ALLISON Products produces glass bottles for use in a local beverage company. Currently, ALLISON Products produces 1600 cases of bottles per day. The 20 workers at ALLISON Products work from 7 a.m. until 4 p.m., with 30 minutes off for lunch and a 15-minute break during the morning work session and another at the afternoon work session. ALLISON Products is in the competitive packaging industry, and needs to increase productivity to stay competitive. They feel that a 20 percent increase is needed. ALLISON's management believes that the 20 percent increase will not be possible without a change in working conditions, so they change work hours. The new schedule calls on workers to work from 7:30 a.m. until 4:30 p.m., during which workers can take one hour off at any time of their choosing. Obviously, the number of paid hours is the same as before, but production increases, perhaps because workers are given a bit more control over their workday. After this change, bottle production increased to 1800 cases of bottles per day.

Required:

1. Calculate labor productivity for the initial situation
2. Calculate labor productivity for the hypothetical 20 percent increase
3. What is the productivity after the change in work rules?
4. Write a short paragraph analyzing these results.

Project Management - Decision Trees

A local toy manufacturer has three different mechanisms that can be installed in a doll that it sells. The different mechanisms have three different setup costs (overheads) and variable costs and, therefore, the profit from the dolls is dependent on the volume of sales. The anticipated payoffs are as follows:

	Light Demand	Moderate Demand	Heavy Demand
Probability	0.25	0.45	0.3
Wind-up action	$325,000	$190,000	$170,000
Pneumatic action	$300,000	$420,000	$400,000
Electrical action	-$400,000	$240,000	$800,000

1. What is the ultimate objective in the use of decision trees to product design? How is this objective accomplished?

2. Draw the decision tree

3. What is the EMV of each decision alternative?

4. Which action should be selected?

Costing and Break-even Analysis

A Jamaican food company produces two popular brands of beverages. The following information is available:

Alcohol based wine Non-alcoholic wine

Selling price per unit $46 $36

Variable cost per unit $38 $24

Total fixed costs are $234,000. Lakers plans to sell 21,000 units of Alcohol based wine and 7,000 units of Non-alcoholic wine.

Required:

1. Compute the contribution margin for each beverage.

2. What is the expected net income?

3. Assume the sales mix is 3 units of Alcohol based wine for every 1 unit of Non-alcoholic wine; What is the break-even point in units for each beverage?

4. Assume the sales mix is 3 units of Alcohol based wine for every 2 units of Non-alcoholic wine; What is the break-even point in units for each beverage?