Chapter 4

Discussion Ques+on 8
“Project control should always focus on the cri+cal path.” Comment.

The cri(cal path is an important concept in project management and control. It refers to the
sequence of project network ac(vi(es that have the longest overall dura(on, essen(ally the chain
of tasks that determines the shortest (me a project can be completed in. Focusing controls and
resources on the cri(cal path is crucial because any delays to cri(cal path tasks will delay the
en(re project.

However, saying project control should always focus on the cri(cal path may be an
oversimplifica(on. While monitoring the cri(cal path and ensuring those ac(vi(es stay on track
is key, other non-cri(cal ac(vi(es can become an issue if not properly controlled as well. Problems
with non-cri(cal tasks can use up valuable slack (me that was meant to act as a buffer for cri(cal
path issues arising. So, some aGen(on should be given to non-cri(cal ac(vi(es too.

Addi(onally, the cri(cal path can change over the course of a project. Other previously non-
cri(cal chains of tasks can become cri(cal. So, project managers need to update the schedule and
cri(cal path analysis regularly and adjust focus as needed. An approach that flexibility shiLs
aGen(on and controls between cri(cal and non-cri(cal ac(vi(es as a project progress is more
realis(c.

In summary, the cri(cal path is very important to project scheduling and control and should
receive significant focus. But exclusively or inflexibly focusing on only the formally defined cri(cal
path as ini(ally established is likely insufficient.

Discussion Ques+on 9
Why would subcontractors for a government project want their ac+vi+es on the cri+cal path?
Under what condi+ons would they try to avoid being on the cri+cal path?

There are a few reasons why subcontractors for a government project may want their ac(vi(es
on the cri(cal path:
1. Being on the cri(cal path means their work is essen(al to the overall project (meline. This
gives them more leverage and influence over the project schedule.
2. Subtasks on the cri(cal path may get extra allocated resources, oversight, and more
flexible contracts to ensure they are completed on (me. Subcontractors can benefit from
this addi(onal support.
3. Payments are oLen (ed to comple(on of project milestones. Subcontractors on the
cri(cal path may get paid faster as their work directly (es to major milestones.
However, subcontractors may wish to avoid being on the cri(cal path under some condi(ons as
well:
1. If the project (meline is aggressive and being forced onto the cri(cal path means
accep(ng unrealis(c deadlines, taking on extra risks and liabili(es.
2. They may lack capacity or exper(se to deliver for cri(cal ac(vi(es geSng intense
oversight. Preferring less visibility.
3. If incen(ves or risk/reward sharing for mee(ng (ght project deadlines are lacking, there
is liGle benefit for subcontractors to take on cri(cal path tasks.

Objec+ve Ques+on 8
Objec+ve Ques+on 9

The R&D department is planning to bid on a large project for the development of a new
communica+on system for commercial planes. The accompanying table shows the ac+vi+es,
+mes, and sequences required.
Objec+ve Ques+on 11
There is an 82 percent chance the following project can be completed in X weeks or less. What
is X?
Objec+ve Ques+on 19
Bragg’s Bakery is building a new automated bakery in downtown Sandusky. Here are the
ac+vi+es that need to be completed to get the new bakery built and the equipment installed.
Chapter 5
Discussion Ques+on 5

Management may choose to build up capacity in an+cipa+on of demand or in response to

developing demand. Cite the advantages and disadvantages of both approaches.

Here are some poten(al advantages and disadvantages of building up capacity in an(cipa(on of
demand versus in response to developing demand:

Building Up Capacity in An(cipa(on of Demand

Advantages:
• Get ahead of the compe((on and capture market share.
• Avoid costs of rush orders or temporary capacity if demand grows quickly.
• Lock in lower capital costs before infla(on raises equipment prices.
Disadvantages:
• Overes(mate demand and end up with excess capacity.
• Take on unnecessary risk if demand does not materialize.
• Face higher opera(ng costs per unit with excess capacity

Building Up Capacity in Response to Developing Demand

Advantages:
• Match supply closer to actual demand
• Avoid geSng stuck with unused capacity if demand lags.
• Delay capital investment un(l more certainty about market
Disadvantages:
• Lag behind compe(tors in capturing market share.
• Struggle to keep up if demand grows very rapidly.
• May need to pay premium costs for rush equipment orders.
• Temporary shortages and opera(onal inefficiencies as demand outpaces supply.
Discussion Ques+on 7

What are some reasons for a plant to maintain a capacity cushion? How about a nega+ve
capacity cushion?

Here are some poten(al reasons for a plant to maintain a capacity cushion or a nega(ve capacity
cushion:
Reasons for a posi(ve capacity cushion:
• Protect against variability/surges in demand.
• Enable quick response (me for rush or unexpected orders.
• Allow for planned maintenance down(me without disrup(ng produc(on.
• Account for inevitable equipment failures and breakdowns
Reasons for allowing a nega(ve capacity cushion/over-capacity:
• Capture opportunity for growth if confident demand will increase.
• Gain market share rapidly against constrained compe(tors
• Compensate for an(cipated efficiency losses as equipment ages.

In general, posi(ve cushion allows flexibility while nega(ve cushion seeks growth opportuni(es
despite the higher risks. The op(mal tradeoff depends significantly on the specifics and
predictability of a plant's product demand within its compe((ve environment.
Objec+ve Ques+on 4
Objec+ve Ques+on 5

Suppose that AlwaysRain Irriga+on’s marke+ng department will undertake an intense ad

campaign for the bronze sprinklers, which are more expensive but also more durable than the
plas+c ones. Forecast demand for the next four years is as follows:
Year Plastic 90 Plastic Plastic Bronze 90 Bronze Bronze Total
180 360 180 360 Demand
1 32 15 50 11 6 15 129
2 44 16 55 15 5 16 151
3 64 17 64 18 6 17 186
4 67 18 67 23 9 20 204
What are the capacity implica+ons of the marke+ng campaign (assume no learning)?
Objec+ve Ques+on 6

In an+cipa+on of the ad campaign, AlwaysRain bought an addi+onal bronze machine. Will this
be enough to ensure that adequate capacity is available?
Objec+ve Ques+on 7

Suppose that operators have enough training to operate both the bronze machines and the
injec+on molding machine for the plas+c sprinklers. Currently, AlwaysRain has 10 such
employees. In an+cipa+on of the ad campaign described in problem 5, management approved
the purchase of two addi+onal bronze machines. What are the labor requirement implica+ons?
7) Using Solver in Excel the “Poor Growth Profit” for “Move” should be -8333.333 to Expected
values of “Do Nothing” and “Move” in different.