Problem: Bob Summers, CEO of Summer Construction has an opportunity to bid on a contract that pays $5500 upon completion, but the contract calls for a late performance penalty of $140 per week for each week that the project is delayed beyond eight weeks.
Activity Normal Time Normal Cost Crash Time Crash Cost Immediate Predecessors
A 1 $300 1 $300 -
B 3 $400 1 $470 A
C 2 $350 1 $550 A
D 5 $550 4 $675 A
E 4 $300 3 $375 C
F 2 $450 1 $500 C
G 7 $425 5 $525 C
H 4 $525 2 $625 B,E
I 3 $250 1 $330 D,F
J 1 $300 1 $300 H,G,I
Question 1: Find the crash cost per week for each activity and record the results in the crash table in the table. What are the total normal costs for the project?
Question 2: Which activity would you recommend that Hank crash first, if any?
Question 3: What project duration will minimize project cost?
Question 4: What is the maximum profit that Summers can attain for this project?