MME30001

Engineering
Management 1
ASSIGNMENT 2

Prepared By
4314069-Mohammed Abdulhamid Hussen
13 May 2015

MME30001- Engineering Management 1

Table of Contents
1.

2.

CPM Network ............................................................................................................................ 2

1.1.

Activity plan ....................................................................................................................... 2

1.2.

Normal CPM network ......................................................................................................... 3

Analysis of the five proposals ..................................................................................................... 4

2.1.

Proposal 1 .......................................................................................................................... 4

2.2.

Proposal 2 .......................................................................................................................... 5

2.3.

Proposal 3 .......................................................................................................................... 6

2.4.

Proposal 4 .......................................................................................................................... 7

2.5.

Proposal 5 .......................................................................................................................... 8

2.6. Recommendations based on analysis of the five proposals ..................................................... 9

Cost analysis .............................................................................................................................. 9
Time Analysis ............................................................................................................................. 9
3.

Implications in terms of costs and profits for all scenarios........................................................ 10

MME30001- Engineering Management 1

1. CPM Network
1.1.

Activity

Activity plan

Activity Name

Precedent
Activities

Duration
(weeks)

Clearing of Site

12

Work on the subsurface drainage

12

Filling for landscaping

21

Installation of the landscaping plants and

trees

18

Excavation work

Pouring of Concrete footings

Pouring of supports for seat galleries

20

Erecting pre-cast galleries

19

Pouring of the seat platforms

Install steel structure to erect roof on

Erect roof

12

Complete the dressing and support rooms

12

Paint the seats

I,L

Installation of lights

Installation of electronic board and other

facilities

0
0

Start

0
0

0
0

A
12
0

B
12
15

24
39

24
39

C
21
15

45
60

45
60

D
18
15

63
78

12
12

E
6
0

18
18

18
18

F
7
0

25
25

25
25

G
20
0

45
45

12
27

12
12
45
45

H
19
0

64
64

64
64

I
8
0

72
72

72
72

M
6
0

78
78
78
78

25
40

J
8
15

33
48

Normal CPM network

1.2.

MME30001- Engineering Management 1

33
48

Project Duration: 78 weeks

Completion date: 3rd July 2017
The critical path is directed by the red
arrows.
Critical path: A-E-F-G-H-I-M

K
12
15

45
60

45
50

L
12
15

57
72

45
64

N
8
19

53
72

45
66

O
6
21

51
72

Finish

78
78

Start

A
12

B
12

24

24

C
21

45

45

D 63+X
18

12

E
6

18

18

F
7

25

25

G
12

12

12

37

37

H 56+X
19

56+X

I
8

64+X

64+X M 70+X
6
70+X

25

J
8

33

Proposal 1
2.1.

2. Analysis of the five proposals

MME30001- Engineering Management 1

33

P (Strike)
No Strike, P=50%
Strike (8 weeks), X=8, P=0.25%
Strike (12 weeks), X=12, P=0.25%

Actual Cost
$60,000
$60,000
$180,000

K
12

45

45

L 57+X
12

45

N
8

53+X

45

O
6

51

Finish

70+X

Start

A
12

B
12

24

24

C
14

38

38

D 56+X
18

12

E
6

18

18

F
7

25

25

G
12

12

12

37

37

H 56+X
19

56+X

I
8

64+X

64+X M 70+X
6
70+X

25

J
8

33

Proposal 2
2.2.

MME30001- Engineering Management 1

33

P (Strike)
No Strike, P=50%
Strike (8 weeks), X=8, P=0.25%
Strike (12 weeks), X=12, P=0.25%

Actual Cost
$90,000
$90,000
$210,000

K
12

45

45

L 57+X
12

45

N
8

53+X

45

O
6

51

Finish

70+X

0
0

Start

0
0

A
12

B
12

24
39

24
39

C
21

45
60

45
60

D 63+X
18 78

12

E
6

18

18

F
7

25

25

G
20

12
27

12

45

45

H 64+X
19

64+X

I
8

72+X

72+X M 78+X
6
78+X

25

J
8

33

Proposal 3
2.3.

MME30001- Engineering Management 1

33

P (Strike)
No Strike, P=50%
Strike (8 weeks), X=8, P=0.25%
Strike (12 weeks), X=12, P=0.25%

Actual Cost
$27,000
$267,000
$387,000

K
6

39

39

L
12

52

39

N
8

47

39

O
6

45

Finish

78+X

Start

A
12

12

B
12

24

24

C
21

45

45

D
18

12

E
6

18

18

F
7

25

25

G
20

63+8
63+12

12

45

45

H
19

64+8
64+12

72
76

I
8-5=3

75
79

75
79

M
6-4=2

77
81

77
81
77
81

25

J
8

33

Proposal 4
2.4.

MME30001- Engineering Management 1

33

P (Strike)
No Strike, P=50%
Strike (8 weeks), X=8, P=0.25%
Strike (12 weeks), X=12, P=0.25%

Actual Cost
$0
$51,000
$171,000

K
12

45

45

L
12

57

45

N
8

53

45

O
6

51

Finish

77
81
77
81

Start

A
12

B
12

24

24

C
21

45

45

D 63+X
18

12

E
6

18

18

F
7

25

25

G
20

12

12

45

45

H 64+X
19

64

I
8

72+X

72

M 78+X
6
78+X

25

J
8

33

Proposal 5
2.5.

MME30001- Engineering Management 1

33

P (Strike)
No Strike, P=50%
Strike (8 weeks), X=8, P=0.25%
Strike (12 weeks), X=12, P=0.25%

Actual Cost
$0
$240,000
$360,000

K
12

45

45

L 57+X
12

45

N
8

53

45

O
6

51

Finish

78+X

MME30001- Engineering Management 1

2.6. Recommendations based on analysis of the five proposals

Let X denote the number of weeks the workers go on strike. Possible strike will begin in 31st
December 2016, i.e. after 52 weeks.
The actual cost for each scenario is calculated with the following formula:
[ ] + [( + )
( + )]
And the Expected monetary value (or average value) can be calculated as:
= 0.5 + 0.25 8 + 0.25
12

Cost analysis

Cost Analysis
P (Strike)
No Strike, P=50%
Strike (8 weeks), X=8, P=0.25%
Strike (12 weeks), X=12, P=0.25%
Expected Monetary Value

Proposal 1

Proposal 2

$60,000
$60,000
$180,000

$90,000
$90,000
$210,000

Proposal 3
$27,000
$267,000
$387,000

$90,000.00 $120,000.00 $177,000.00

Proposal 4

Proposal 5

$0
$51,000
$171,000

$0
$240,000
$360,000

$55,500.00 $150,000.00

Based on the cost analysis, proposal 4 would be suited best because it has the lowest expected
monetary value and thus can end up with the least amount of cost compared to other proposals.
Proposal 1 can be considered the second best choice since it has a smaller loss range (from $60,000
to $180,000).

Time Analysis

Time Analysis
P (Strike)

Proposal
1

Proposal
2

Proposal
3

Proposal
4

Proposal
5

No Strike, P=50%
Strike (8 weeks), X=8, P=0.25%
Strike (12 weeks), X=12, P=0.25%

70
78
82

70
78
82

78
86
90

78
77
81

78
86
90

Average duration

75

75

83

78.5

83

Based on the time analysis, we consider proposal 1. The main reason is because it has the lowest
average duration compared to other proposals. Even though proposal 2 has the same duration, it
still costs more. Proposal 4 can be considered the second choice because it has the second lowest
average duration and is better than proposal 1 if cost-time ratio is considered.

MME30001- Engineering Management 1

3. Implications in terms of costs and profits for all scenarios

The main purpose of conducting these measures is to ensure that the losses made due to the
possibility of strike is kept to a minimum. Five proposals have been submitted thus far, and each of
them have their own implications of profits and costs. In each proposal, it has been accounted that
the total overhead cost due to delays caused by 12 weeks of strikes amounted to $60,000. An
estimated loss of $25,000 is added for week ahead of the projects deadline.
Proposal 1 suggested that the project should expedite the activity of pouring the seat gallery
supports. This way, the work would be cut down by 8 weeks at the cost of $60,000. However, the
activity that follows it, which is erecting the pre-cast galleries, took 19 weeks to finish and it is during
this time the strike will occur and assuming that the work will continue, the project would extend
beyond the deadline by four weeks, adding $180,000 to the total cost. This is mainly because the
activities lie in the critical path and any delay in an activity could cause the whole project to be
delayed.
Proposal 2 suggested that, in addition to proposal 1, extra work should be done on the landscaping
filling activity, which cuts down the work by 7 weeks and cost an additional $30,000. However, since
this activity is not on the critical path, it virtually adds no effect on the project duration other than
increase the total cost.
Proposal 3 suggested cutting down the duration for erecting the roof by 12 weeks, at a cost of
$27,000. While this seems less costly at first, when we factor in the 12-week strike period, it actually
delays the project duration by 12 weeks, costing $360,000 in the process. This is way higher than the
profit earned by completing the project on time and would result in a huge loss. Thus, it is not
recommended.
Proposal 4 suggested that nothing should be done until December 31st, then if a strike occurs, let it
go on until it ends, and then expedite the remaining activities to no less than one third of its original
duration. Its costs $9000 per week of reduction but it actually allows for the project to complete on
time even though the strike ran its full duration and high overhead cost. It is still efficient compared
to the rest of the proposals.
Proposal 5 suggested to avoid taking any action whatsoever, and to hope no strike occurs. It is a risky
incentive as there is a 50% chance for a strike to occur, and if it does, would cause losses of upto
$360,000, which is beyond the profit margin of the whole project. This proposal would cause the
university to lose money and is not a good choice overall.
Overall, the above analysis shows that it is unwise to assume that a strike would not occur in the first
place. Even if it does, factors such as time and cost have to be considered when making a decision
for suggesting alternatives. Proposal 4 seems to offer the best balance in cost and time savings. It
has the lowest average cost compared to other proposals and has the second lowest average
duration. And since there is no bonus for completing the project earlier, it would be better to go
with proposal 4.

10