Given the following information, determine the project schedule that minimizes the total project costs. Suppose that project indirect costs are $8,000 per week. Suppose also that, after week 65, the Central Ohio Hospital Board imposes on St. Adolf's a penalty cost of $20,000 per week if the hospital is not fully operational. Activity Normal Time Normal Cost ($) Crash Crash Cost Time ($) Cost to Crash per week (weeks) (weeks) ($) A 12 $12,000 11 $13,000 $1,000 B 9 $50,000 7 $64,000 $7,000 C 10 $4,000 5 $7,000 $600 Ꭰ 10 $16,000 8 $20,000 $2,000 E 24 $120,000 14 $200,000 $8,000 F 10 $10,000 6 $16,000 $1,500 G 35 $500,000 25 $530,000 $3,000 H 40 $1,200,000 35 $1,260,000 $12,000 I 15 $40,000 10 $52,500 $2,500 J 4 $10,000 1 $13,000 $1,000 K 6 $30,000 5 $34,000 $4,000 Total $1,992,000 What is the optimum choice for project duration?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Given the following information, determine the project schedule that minimizes the total project
costs. Suppose that project indirect costs are $8,000 per week. Suppose also that, after week 65,
the Central Ohio Hospital Board imposes on St. Adolf's a penalty cost of $20,000 per week if the
hospital is not fully operational.
Activity
Normal
Time
Normal Cost
($)
Crash
Crash Cost
Time
($)
Cost to
Crash per
week
(weeks)
(weeks)
($)
A
12
$12,000
11
$13,000
$1,000
B
9
$50,000
7
$64,000
$7,000
C
10
$4,000
5
$7,000
$600
Ꭰ
10
$16,000
8
$20,000
$2,000
E
24
$120,000
14
$200,000
$8,000
F
10
$10,000
6
$16,000
$1,500
G
35
$500,000
25
$530,000
$3,000
H
40
$1,200,000
35
$1,260,000
$12,000
I
15
$40,000
10
$52,500
$2,500
J
4
$10,000
1
$13,000
$1,000
K
6
$30,000
5
$34,000
$4,000
Total
$1,992,000
What is the optimum choice for project duration?
Transcribed Image Text:Given the following information, determine the project schedule that minimizes the total project costs. Suppose that project indirect costs are $8,000 per week. Suppose also that, after week 65, the Central Ohio Hospital Board imposes on St. Adolf's a penalty cost of $20,000 per week if the hospital is not fully operational. Activity Normal Time Normal Cost ($) Crash Crash Cost Time ($) Cost to Crash per week (weeks) (weeks) ($) A 12 $12,000 11 $13,000 $1,000 B 9 $50,000 7 $64,000 $7,000 C 10 $4,000 5 $7,000 $600 Ꭰ 10 $16,000 8 $20,000 $2,000 E 24 $120,000 14 $200,000 $8,000 F 10 $10,000 6 $16,000 $1,500 G 35 $500,000 25 $530,000 $3,000 H 40 $1,200,000 35 $1,260,000 $12,000 I 15 $40,000 10 $52,500 $2,500 J 4 $10,000 1 $13,000 $1,000 K 6 $30,000 5 $34,000 $4,000 Total $1,992,000 What is the optimum choice for project duration?
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