Calculate the per day costs for crashing each activity and

Question

ACME HOSPITAL TRAUMA WING PROJECT

Chris Michaels is the Chief Project Coordinator employed by a large private hospital group, AHE Healthcare. His primary responsibility is to ensure hospital construction and heavy-duty equipment installation projects involving any one of their 58 hospitals are successfully completed within the allocated budgets and timeframes. His job also involves coordinating the appointment of the project teams, project human resources management and project resources planning.

The construction supervisor's work is critical as all other work is dependent on the successful, timeous and progressive completion of the construction component. The engineers primarily serve as consultants and source the necessary supplies for the building contractor. The construction supervisor is also responsible for managing the largest proportion of people working on the project, the 32 construction workers required to complete the project on time. Although the builders will be employed and paid by the building contractor, the Project Manager can influence the choice of them. If new builders are selected, they may have to be trained.

ACME Hospital is AHE Healthcare's flagship hospital located in the city of Riversdale. It consists of 950 beds, 12 operating theatres, an emergency department, 14 general and specialist wards, ancillary medical and surgical departments and 1850 staff. The Hospital is planning to build new a new trauma wing consisting of a 6 bed trauma ward, one trauma theatre, one intensive care unit (ICU) and most importantly, a skywalk that links the existing hospital to the new wing which will be located across a major road.

The road is very busy and would require the project team to coordinate traffic during the skywalk construction, using their own resources. The proposed site of the new wing is unfortunately heavily-laden with rocks which have to be removed using heavy duty equipment. There are only two contractors for plant hire in Riversdale, and the limited amount of machinery may slow down the project. Another major challenge for the project team is the 18 month timeframe that the Managing Director of AHE Healthcare has allowed for the completion of the project. The reason is that an international sports organisation committee has selected Hemingway Hospital as the "standby" hospital of choice for any emergencies that may arise during an upcoming international sports tournament commencing in 20 months in Riversdale. The sports stadium is located 3 kilometers away from the hospital and may have to deal with trauma patients in the event of a catastrophe. The outcomes of not having a completed trauma wing on time could be disastrous.

The financial manager reports that the project has been allocated a budget of R65 million, which includes R150 000 for a project team reward and recognition programme. No further funds will be provided by AHE Healthcare, since this is the budget that the project sponsor motivated for at the outset. The project would have to comply with SANS standards, union contracts and government and Basic Conditions of Employment regulations.

The project is set to commence in three days time and cannot be delayed by even a week, but to everyone's dismay, the construction supervisor reports that his 32 construction workers are all reluctant to work. They have decided to go on strike as they have not been paid a fair wage and are demanding an increase. Fortunately, after a brief consultation with the worker's unions, the problem was quickly resolved and the workers will commence the project as scheduled, but some of them seem very lethargic and de-motivated. There is concern from the project team that this may result in project delays and diminished quality of work. Furthermore, some of the builders may resign, leaving the team with limited builders.

QUESTION 1

1.1 Based on the information provided in the case study above, draft a concise staff and management plan for the ACME Hospital trauma wing project.

1.2 How would you ensure that the construction workers do not delay the project or decrease the quality of work due to lethargy and de-motivation?

1.3 Describe two (2) earned-value management indices that you could use to understand how well or poorly the ACME trauma wing project is performing.

QUESTION  2

The Critical Path Method (CPM) is a schedule network analysis technique that is performed using the schedule model.

2.1 Prepare an activity on node (AON) diagram from the project information presented in the table below.

Activity No	Preceding Activity	Duration (Weeks)
100	Start	2
200	100	3
300	100	4
400	300
400	200	4
500	400	2
500	200	3
600	500	7
End	600	-

2.2 What is the duration of each path through the network diagram? 2.3 Identify the critical path. 2.4 Explain why this is called the critical path.

2.5 The PERT methodis used to estimate project duration when there is a high degree of uncertainty about the individual activity duration estimates.

Calculate the expected time (t) for each activity below.

Activity	Optimistic time (a)	Most likely time (m)	Pessimistic time (b)	Expected time (t)	Immediate predecessor
A	1	2	9		-
C	2	4	6		-
E	1	2	3		-
T	1	5	9		E
G	1	2	3		C, T
P	2	3	4		A, G
K	4	6	14		A, G
F	1	3	5		P
M	4	5	6		K
B	7	9	11		F, M

QUESTION 3

Using relevant examples, discuss some ways in which project teams can improve their performance.

QUESTION 4  

4.1 Using the above network diagram and the activity durations (in days) in the nodes calculate the slack time for each activity showing all workings.

4.2 Identify the critical path of the project

4.3 Construct and clearly label the Gantt chart for the above project, assuming the project starts on the 1^st of May.

QUESTION 5

You are considering the decision of whether or not to crash your project. After asking your operations manager to conduct an analysis, you have determined the "pre-crash" and post-crash" activity duration costs as shown in table below:

Activity	Normal	Normal	Crashed	Crashed
	Duration (days)	Cost	Duration (days)	Cost
A	4	R1000	3	R2000
8	5	R2500	3	R5000
C	3	R750	2	R1200
0	7	R3500	5	R5000
E	2	R500	1	R2000
F	5	R2000	4	R3000
G	9	R4500	7	R6300

5.1 Calculate the per day costs for crashing each activity.

5.2 Which is the most attractive activity to start crashing? Why?

5.3 Calculate project costs by all possible project durations. Display this information in a clearly labelled TABLE.

5.4 Assuming that your allocated project budget is capped at R18000, using the TABLE constructed in 5.3 above, determine at what point it no longer makes cost sense to continue crashing activities? Explain why?