Case Study 2

CASE 3: J.S. PLATINO CONSTRUCTION COMPANY

J.S. PLATINO CONSTRUCTION COMPANY has just made the winning bid of P60 million to construct
a new plant for a major manufacturer. The manufacturer needs the plant to go into operation within a
year. Therefore, the contract includes the following provisions:
A penalty of P3,000,000 if J.S. Platino Construction Company (JSPCC) has not completed construction
by the deadline 47 weeks from now.
A bonus of P1,500,000 will be paid to JSPCC if the plant is completed within 40 weeksto provide
additional incentives for speedy construction.
Engr. J.S. Platino, the company owner, will oversee the project's construction to ensure that this
project stays on schedule. He looks forward to this new challenge of bringing the project in on schedule
and perhaps even finishing early. However, since he isdoubtful that it will be feasible to finish within 40
weeks without incurring high costs, he has decided to focus his initial planning on meeting the deadline of
47 weeks.
Engr. Platino needs to arrange for some crews to perform the various construction activities at different
times.
Table 10.1 shows his list of the various activities. The third column provides important additional
information for coordinating the scheduling of the crews. For any given activity, its immediate
predecessors (as given in the third column of Table 10.1) are those activities that must be completed by
no later than the starting time of the given activity. (Similarly, the given activity is called an immediate
successor of each of its Activity Description Immediate

Activity Activity Description Immediate Estimated Duration

Predecessors
A Excavate --- 2
B Lay the foundation A 4 A 4
C Put up the rough wall B B 10
D Put up the roof C 6
E Install the exterior plumbing C 4
F Install the interior plumbing E 5
G Put up the exterior siding D 7
H Do the exterior painting E,G 9
I Do the electrical work C 7
J Put up the wallboard F,I 8
K Install the flooring J 4
L Do the interior painting J 5
M Install the exterior fixtures H 2
N Install the interior fixture K,L 6

For example, the top entries in this column indicate that :

1. Excavation does not need to wait for any other activities.
2. Excavation must be completed before starting to lay the foundation.
 3. The foundation must be wholly laid before starting to put up the rough wall, etc.
When a given activity has more than one immediate predecessor, all must be finished before the
activity can begin. To schedule the activities, Engr. Platino consults with each of the crew supervisors to
estimate how long each activity should take when done in the normal way. These estimates are given in
the rightmost column of Table 10.1.
Adding up these times gives 79 weeks, which is far beyond the deadline for the project. Fortunately,
some activities can be done in parallel, which substantially reduces the project completion time.
Given all the information in Table 10.1, Engr. Platino now wants to develop answers to the following
questions:
1. How can the project be displayed graphically to visualize the flow of the activities better?
2. What is the total time required to complete the project if no delays occur?
3. When do the individual activities need to start and finish (at the latest) to meettThis project
completion time?
4. When can the individual activities start and finish (at the earliest) if no delays occur?
5. Which are the critical bottleneck activities where any delays must be avoided to prevent delaying
project completion?
6. For the other activities, how much delay can be tolerated without delaying project completion?
7. Given the uncertainties in accurately estimating activity durations, what is the probability of
completing the project by the deadline?
8. If extra money is spent to expedite the project, what is the least expensive way of attempting to
meet the target completion time (40 weeks)?
9. How should ongoing costs be monitored to try to keep the project within budget?

(1) The project be displayed graphically to visualize the flow of the activities better

B(4) C(10 G(7) H(9)

) D(6) M(2
) DONE

A(2) A(2) A(2)

A(2) A(2)

A(2) A(2)
(2). The total time required to complete the project if no delays occur.
Paths Duration
ABCDGHM = 40 (this path proves that the project can be done in due time)
ABCEHM = 31
ABCEFJKN = 43
ABCEFJKN = 44
ABCIJKN = 41
ABCIJLN = 42
ABCEFJKN is the projects critical path (44 weeks)

When do the individual activities need to start and finish (at the latest) to meet this projectcompletion
time?
LS = Latest Start LF= Latest Finis

A G M
LS = 0 LS = 22 LS = 38
LF = 2 LF = 29 LF = 40

B H N
LS = 2 LS = 29 LS = 38
LF = 6 LF = 38 LF = 4
M
C I LS = 38
LS = 6 LS = 16 LF = 40
LF = 16 LF = 23

D J
LS = 16 LS = 25
LF = 22 LF = 33

E K
LS = 16 LS = 33
LF = 20 LF = 37

F L
LS = 20 LS = 33
LF = 25 LF = 38
When can the individual activities start and finish (at the earliest) if no delays occur?
The following diagram illustrates the individual activities start and finish if no delays
occur. This is the diagram:
ES=Earliest Start EF = Earliest Finish

A G M
ES = 0 ES = 22 ES = 38
EF = 2 EF = 29 EF = 40

B H N
ES = 2 ES = 29 ES = 38
EF = 6 EF = 38 EF = 44

C I
ES = 6 ES = 16
EF = 16 EF = 23

D J
ES = 16 ES = 25
EF = 22 EF = 33

E K
ES = 16 ES = 33
EF = 20 EF = 37

F L
ES = 20 ES = 33
EF = 25 EF = 38
A G

Which are the critical bottleneck activities where any delays must be avoided to prevent delaying project
completion? 
The bottleneck activities where delays may occur are Activities DEI, GF, HJ, and MKL. These activities
should be monitored to avoid delay of project completion.
For the other activities, how much delay can be tolerated without delaying project completion? 

Calculating Slack

Activity Late Finish Early Finish Slack In Weeks

A 2 2 0
B 6 6 0
C 16 16 0
D 22 22 0
E 29 16 13
 F 34 25 9
G 29 29 0
H 38 38 0
I 25 23 2
J 42 33 9
K 46 37 9
L 46 38 8
M 40 40 0
N 44 44 0

Given the uncertainties in accurately estimating activity durations, what is the probability of completing
the project by the deadline?
Expected Time = Optimistic Time + (4 x most likely) + pessimistic

Activity Optimistic Most likely Time Pessimistic Time Expected

Time Time

A 1 2 3 2
B 2 4 5 3.83
C 6 10 12 9.66
D 3 6 8 5.83
E 2 4 5 3.83
F 3 5 6 5.66
G 5 7 9 7
H 7 9 11 9
I 5 7 8 6.83
J 6 8 10 8
K 2 4 5 3.83
L 3 5 6 4.83
M 1 2 3 2
N 4 6 7 5.83

If extra money is spent to expedite the project, what is the least expensive way of attempting to meet the
target completion time (40 weeks)? 
For the budget of P21,000,000 for labor cost
 Activity Normal Normal Crash Crash Max Reduce
Time Cost Time Cost Weeks Cost
(week) Of Per Week
Reduction

A 2 1,000,000 2 1,000,000 0 0
4 5,000,000 3 8,000,000 1 3,000,000
C 10 4,000,000 9 4,900,000 1 900,000
D 6 3,000,000 5 3,500,000 1 500,000
E 4 500,000 3 800,000 1 300,000
F 5 500,000 4 900,000 1 400,000
G 7 1,000,000 6 2,000,000 1 1,000,000
H 9 1,000,000 8 1,800,000 1 800,000
I 7 800,000 6 1,400,000 1 600,000
J 8 200,000 7 900,000 1 700,000
K 4 2,000,000 3 2,300,000 1 300,000
L 5 1,000,000 4 1,400,000 1 400,000
M 2 500,000 2 500,000 0 0
N 6 500,000 6 500,000 0 0

The least expensive way is to get the lowest cost out of this diagram. For example, E- installing the
plumbing, K – installing the flooring, and L – interior painting. Reducing the time for these can save time
and spend less.
How should ongoing costs be monitored to try to keep the project within budget?  
Using the critical chain approach to keep project within budget.

Original Critical Path

Activity A Activity B Activity C Activity D Activity E Activity F

Critical Path with Project Buffer

Activity A Activity B Activity C Activity D Activity E Activity F PROJECT

BUFFER

Time buffers can be put between bottlenecks in the critical path.

These feeder buffers protect the critical path from delays in non-critical path.

Activity Buffer
B1
Activity A Activity B Activity C Activity D Activity E Activity F PROJECT

BUFFER

ACTIVITY ACTIVITY BUFFER

D1 D2