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    Homework#2 Solution

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    Hamed Junaid

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    Homework#2 Solution

    Uploaded by

    Hamed Junaid
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    Homework#2 Solution(1)

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    3 views3 pages

    Homework#2 Solution

    Uploaded by

    Hamed Junaid

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    KING FAHD UNIVERSITY OF PETROLEUM & MINERALS

    Construction Engineering and Management Department


    EM 550 01 – 233 – Engineering Project Management

    Homework #2 solution

    Please solve the following questions on your own terms


    Q.1 Differentiate between Top Down budgeting and Bottom-up Budgeting
    Refer to the slides of chapter 7 [slides 8-10]

    Q.2. Solve problem 6 page 258


    Solution
    Learning rate =85%, N=8 sessions, T 1=50 hrs for the first session
    cost per hour is $100, overheads =$600 per session, profit margin=20%
    a. What is the total bid price
    N =8
    total time=T 1 ∑ nr , utilizing the learning curve tables at N=8 with learning rate of
    n=1
    N=8

    85%, the multiplier ∑ n r=5.936


    n=1

    Total time= 50*5.936=296.8 hours


    Total cost is 296.8 *$100+600*8=$34,480
    The bidding price =total cost *1.2=$34,480*1.2=$41,376

    b. What should be the price per session?


    Price per session = total price /N=$41,376/8=$5,172 per session

    c. At what session will you break even


    r ln ⁡(0.85)
    T n=T 1 n , where r = =−0.2345 .
    ln ⁡(2)
    To calculate the time for every session we use the above rule, for instance, T 2=T 1 2r ,
    or use the Table in chapter 7, T 2=50∗0.85=42.5 hours
    It will breakeven in session 3.

    Session Time Direct Over Total Price per Total


    KING FAHD UNIVERSITY OF PETROLEUM & MINERALS
    Construction Engineering and Management Department
    EM 550 01 – 233 – Engineering Project Management

    Homework #2 solution

    No. (hours) Cost ($)* heads ($) cost ($) session ($) Price ($)
    1 50 5000 600 5600 5,172 5172
    2 42.5 4,250 600 10,450 5,172 10,344
    3 38.65 3,865 600 14,915 5,172 15,516
    4 36.15 3,615 600 19,130 5,172 20,688
    5 34.3 3,430 600 23,160 5172 25,860
    6 32.85 3,285 600 27,045 5172 31,032
    7 31.7 3,170 600 30,815 5172 36,204
    8 30.7 3,070 600 34,485 5172 41,376
    * Direct Cost = session Time * $100 per session

    Q.3 Solve problem 9, page 307, part c only.


    Solution
    The expected times are listed in the table below, with these expected times, the project
    completion time is 24.67 . the critical path is A-C-E-G and the critical path variance is
    Var(critical path)=Var(A)+Var(C)+Var(E)+Var(G)= 1.78+0.11+0.44+0.44=2.77
    σ critical path=√ 2.77=1.66

    Calculate the Z normal parameter at 25


    25−24.67
    Z= =0.1987∨0.2
    1.66

    8.5 16

    0 8.5 18.17 24.67


    10.67 18.17
    0
    8.5 12 12 18.17 24.67
    0 8.5 18.17 24.67
    8.5 12 12 18.17
    0 24.67
    0 10. 12 19. 19. 22.83
    5 5 5

    1.5 12 13.84 21.34 21.34 24.67

    Activit ET Variance
    a m b
    y
    A 6.5 7.5 14.5 8.5 1.78
    KING FAHD UNIVERSITY OF PETROLEUM & MINERALS
    Construction Engineering and Management Department
    EM 550 01 – 233 – Engineering Project Management

    Homework #2 solution

    10.
    B 8.5 10.5 12.5 0.44
    5
    C 2.5 3.5 4.5 3.5 0.11
    D 6.5 7.5 8.5 7.5 0.11
    6.1
    E 5.5 5.5 9.5 0.44
    7
    F 5.5 7.5 9.5 7.5 0.44
    G 4.5 6.5 8.5 6.5 0.44
    3.3
    H 2.5 3.5 3.5 0.03
    3

    From the normal tables the area at 0.2 is 0.5793


    So there is 57.93% chance that the project will finish within 25 days
    Remarks; the durations in the nodes are for problem 8, just replace these by the ET
    calculated in the table above

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