Question 2 (27 marks)

The following data has been extracted from Namibia Construction Company (NCC) a company that undertakes various building projects around Namibia.

Activity	Previous activity	Normal time (days)	Normal costs N$	Crash time	Crash costs N$	Cost slope
A	-	13	20 000	12	25 000	?
B	-	13	15 000	10	18 000	?
C	A	12	10 000	12	10 000	?
D	A	?	12 000	8	12 000	?
E	A	10	8 000	8	11 000	?
F	E	5	6 000	5	6 000	?
G	D, F	7	4 000	5	5 000	?
H	B, C	6	5 000	5	6 500	?
I	G, H	9	8 000	8	?	3 000

The duration of activity D cannot be determined accurately. The estimates are as follows:

• Most likely 8 days
• Optimistic time 6 days
• Pessimistic time 10 days

You have been hired as the management accountant of NCC and you have been tasked to assist the management in various calculations.

Requirement		Mark
		Sub- total	Total
2.1	Draft a network diagram for the project.	10	10
2.2	Identify the different paths and indicate which one is the critical path.	6	16
2.3	Calculate the normal cost of the project.	2	18
2.4	Calculate the earliest starting time of the event that precedes activity H.	2	20
2.5	Calculate the latest starting time of the event that precedes activity G.	2	22
2.6	Calculate the crash cost for activity I.	2	24
2.7	Calculate the total cost if the project has to be completed in 41 days.	3	27
Note: Show all the necessary workings or steps that are required to reach the answer. Marks are available for these.
Total		27