LGT 3105 Operation Management – Case Assignment 1 (Toys City Inc.)

1. I would have accommodated David Cheung’s vacation request.

It is because based on the Critical Path Method (CPM), the network diagram of the work of different audit areas comes as Figure 1, and we can find that the critical path which is the series of activities using the longest time to complete is Activity 1-2-5-7-10-13-15. It means that if there is any delay on Activity 1, 2, 5, 7, 10, 13, 15, the whole project would be delayed also. However, David is only responsible on the auditing of liquid assets which is Activity 4 which is not in the critical path. The vacation or delay made by David would not affect the progress of the whole project.
Therefore, we can choose to crash Activity 7 and Activity 9. They can crash for 2 hours respectively. [pic]Figure 4

Critical Path A (Activity 1-2-5-7-10-13-15) crash Activity 7 to reduce 2 hours by using $37,3334($18.6667*2) and Activity 7 has crashed all the hours. Critical Path B (Activity 1-2-5-8-9-12-14-15) crash Activity 9 to reduce 2 hours by using $20($10*2) and Activity 9 has also crashed all the hours.

There are still 15 hours to go, we can find the activities that can reduce both critical path at the same time. Activity 5 is the activity that is common in both critical path and can be crashed with lower cost. So, we choose to crash Activity 5 for 15 hours. [pic]Figure 5

Both Critical Path A and B crash Activity 5 to reduce 15 hours by using $643.75($42.9167*15). And finally, the accelerating plan can meet the deadline with 60 hours earlier and minimum additional cost.

If there is a corporate limit on per-hour reduction of $70 an hour, it is still possible to have further reductions in certain extent. For the previous reductions, all of their costs are below $70 per hour and they are within the limitation. Apart from the previous reductions, it is still possible to have further reductions on Activity 5 to crash for the remaining 21 hours which is only cost $42.9167 per hour. However, it may cause problem if they want a further crash on Activity