55815 Quantitative Models

Exercise 9

1. Consider the following project:

Activity Precedence Standard times Minimum times Cost of reduction

relations (in weeks) (in weeks) per week in shequels
A - 4 2 300
B - 7 5 200
C - 4 3 700
D A 4 4 -
E A,B 3 2 200
F A,B 4 3 250
G D,E 4 3 200
H C 5 3 100
I H,F 5 2 400

a) Draw the network diagram and compute ES, LS, EF and LF (you can use a table for
the computation).
b) What is the critical path and its length?
c) If you manage to decrease the project duration to 13 weeks, you will receive a payment
of 1,000 shequels. Would it be advantageous to shorten the project duration? If so,
what would be the financial gain from this reduction? Solve using manual crashing
and then verify the outcomes using a linear programming model and its solution.

2. Consider the following project:

Planned Cost of reduction

Activity predecessor Minimum time
time by 1 time unit
A - 12 10 1000
B - 19 15 800
C - 14 12 1200
D C 16 15 900
E A 23 20 1300
F B,D 15 10 700
G B,D 36 32 800
H C 22 21 300
I E,F 18 14 1000
J H 28 25 700

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 Lecture 9. Project Management - crashing and stochastic duration

a) Identify the critical path and the minimum duration required to finish the project
(prior to any crashing).
b) Calculate the cost of shortening the project duration to 60.

3. Consider the following project:

Immediate Planned Cost of reduction

Activity Minimum time
predecessor time by 1 time unit
A - 4 3 200
B H 6 5 200
C D,E,F 5 4 500
D A 3 3 -
E A,H 6 6 -
F A 6 2 450
G D,E 8 6 400
H - 8 7 700
I B 9 7 600

a) Identify the critical path and the minimum duration required to finish the project
(prior to any crashing).
b) Calculate the cost of shortening the project duration by 2.

4. (**Optional question - You can refer to the lecture notes where I demonstrate how to
address this question. We will learn it next week) As the vice president of marketing for
a prominent toy company, you are overseeing a new advertising campaign that needs to be
completed within 57 days to coincide with the start of the school summer holidays. There
are six essential activities that have been identified for the project, each with its estimated
time for completion:

Activity Precedence Optimistic Most Likely Pessimistic

Relationship Estimate estimate Estimate
A - 12 12 12
B - 15 21 39
C A 12 15 18
D B 18 27 36
E C 12 18 24
F E 2 5 14

a) Find the estimate of the mean and variance of the duration of each activity.
b) Find the mean critical path.
c) Use the mean critical path to find the probability that the advertising campaign will
be ready to launch within 57 days.

Quantitative models 2 Amir Brudner

 Lecture 9. Project Management - crashing and stochastic duration

d) Now, analyze the alternative path through the project network. Find the probability
that this path will be completed in 57 days.
e) Given that the project can be finished only if both paths are completed within 57 days,
what is the probability of both paths being finished on time? What does this result
indicate about the reliability of the standard method employed in part c?

Quantitative models 3 Amir Brudner