Jonesm

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Case: International Capital, Inc.

Activity | a | m | b | te | σte2 |

A | 4 | 7 | 10 | 7.0 | 1.0 |

B | 2 | 4 | 8 | 4.3 | 1.0 |

C | 2 | 5 | 8 | 5.0 | 1.0 |

D | 16 | 19 | 28 | 20.0 | 4.0 |

E | 6 | 9 | 24 | 11.0 | 9.0 |

F | 1 | 7 | 13 | 7.0 | 4.0 |

G | 4 | 10 | 28 | 12.0 | 16.0 |

H | 2 | 5 | 14 | 6.0 | 4.0 |

I | 5 | 8 | 17 | 9.0 | 4.0 |

J | 2 | 5 | 8 | 5.0 | 1.0 |

K | 17 | 29 | 45 | 29.7 | 21.8 |

|

Network Diagram 12 | D | 32 |

0 |   |

12 | 20 | 32 |

0 | A | 5.3 |

0 |   |

0 | 7 | 5.3 |

38 | J | 43 |

0 |   |

38 | 5 | 43 |

32 | H | 38 |

0 |   |

32 | 6 | 38 |

23 | F | 30 |

2 |   |

25 | 7 | 32 |

12 | E | 23 |

2 |   |

14 | 11 | 25 |

7 | C | 12 |

0 |   |

7 | 7 | 12 |

30 | I | 39 |

4 |   |

34 | 9 | 43 |

12 | G | 24 |

8 |   |

20 | 12 | 32 |

43 | K | 72.7 |

0 |   |

43 | 29.7 | 72.7 |

0 | B | 4.3 |

2.7 |   |

2.7 | 4.3 | 7 |

Critical Path: A, C, D, H, J, K

TE = 7 + 7 + 20 + 6 + 5 + 29.7

= 72.7

σTE = √(∑σte2)

= √(1 + 1+ 4 + 4 + 1 + 21.8)

= 5.73

Z = (TS – TE)/ σTE

= (70 – 72.7)/5.73

= -.47

The probability that the project will be completed within 70 workdays is approximately 32 percent.

95 percent probability equates to approximately Z = 1.6

TE = TS – Z(σTE)

= 70 – 1.6(5.73)

= 60.83

In order to have a 95 percent chance of completing the project in 70 workdays, the critical path duration of this project would have to be approximately 60.8 days.

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Chapter 7 Review Questions and Exercises

7-R1 Project risks can/ cannot be eliminated if the project is carefully planned. Explain.

Project risks cannot be eliminated. Risks are inherent in projects and sources of project risk are unlimited. However, if the project is carefully planned risks can be effectively managed and negative consequences minimized through risk...