Case Study Pert Mustang - Updated

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OPERATIONS MANAGEMENT CASE STUDY

GROUP MEMBERS (G3)

ANNE SHARON GM04816

NURUL HAWA GM04797

NUR HIDAYUNI GM04744

MUZHAFFAR OMAR GM04790

YOKA LETCHUMY GM04767

THE PERT MUSTANGPROJECT PLANNING

Contents

INTRODUCTION AND CONCEPT1

QUESTION 12

QUESTION 23

QUESTION 34

5 QUESTION 4

INTRODUCTION

NEW VENTURE

Vikky Roberts owner of RASAS has a soft spot

for high performance mustang cars

Recently she acquired one which needs a lot of

restoration

She is also aware that there is a growing demand

for these vintage cars

She needs help in assessing the feasibility of this

business

REASONS??

The public want the thrill of restoring an old car

But they do not own time to run down all the old parts

Others just want to own a vintage car for its uniqueness

Many are rich enough to pay someone else to restore an auto for them

MEETING THE DEMAND OF BOTH GROUPS

Approach

BASIC RESTORATION

Gets the car looking great and running

MINT RESTORATION

1. Puts the car back in original condition2. Commands a higher price when resold3. Can be customized4. Accept any kind of restoration a

customer want

Various categories

of Restoration

WHAT NEEDS TO BE DONE??

Requested the service operations director to

observe her mustang

Decide the suitable approach to restore it into

a brand new car

The due date is before the exhibition at the

Detroit Auto Show

A report must be prepared to determine a few

aspects

Restoration steps

Competitive priorities

Aspects of proposed business

Project Duration and Budget

Productivity cost

CONTENT OF

THE REPORT

CONTENT OF

THE REPORT

LEARNING ISSUESAND

CONCEPT

PROJECT MANAGEMENTWork

breakdown schedule

Network planning (PERT

or CPM)

Schedule of project

activities

Analyze cost time trade off

Develop a risk management

plan

Steps in PERT

Establish the relationship among activities (PRECEDENCE DIAGRAM)

Assign cost and time estimates for each activities

Identify critical paths and slack activities

Use the network plan to monitor and control the project

QUESTION 1

Competitive priorities of the new proposed business

RASAS’ knowledge and experience in

automobile industry is an advantage for it to

construct the new business- restoring vintage

automobile.

However, considering the competitive

priorities can ensure a better performance of

the business.

www.themegallery.com

Competitive Priorities

COST

Diversifying the business will lead to a higher cost.

.

Minimize the Costs

Production system operates efficiently

Controlling the product cost

Acquire the parts at existing auto parts

stores.

www.themegallery.com

Competitive Priorities

QUALITY

Value for price paid is a definition of quality that consumers often use for

product or service usefulness.

Error-free products and services-decreasing trend in rejections, reworks,

customer complaints.

Customer relation improvement

www.themegallery.com

Competitive Priorities

Flexibility

Accept any kind of restoration a customer wants

Restoring vintage automobile does fit the demand of current market

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www.themegallery.com

Competitive Priorities Customer services

provide good services to attract thetarget customers .

Focus on the delivery time of the cars

Has sufficient spare parts in store.

Consult customers - designing their vintage car.

Provide the after-sale service to gain market share

QUESTION 2

Construct a table containing the project activities using the letter

assigned to each activity, the time estimates and the precedence

relationship.

TABLE OF PROJECT ACTIVITIES

Activity Detail Predecessor Time

A Order all needed material and parts (upholstery, windshield, carburetor, and oil pump)

- 2

B Receive upholstery material for seat covers. Cannot be done until order is placed

A 30

C Receive windshield. Cannot be done until order is placed

A 10

D Receive carburetor and oil pump. Cannot be done until order is placed

A 7

E Remove chrome from body. Can be done immediately

- 1

F Remove body(doors, hood, trunk, and fenders) from frame. Cannot be done until chrome is removed

E 1

G Have fenders repaired by body shop. Cannot be done until body is removed from frame

F 4

Activity Detail Predecessor Time

H Repair doors, trunk, and hood. Cannot be done until body is removed from frame

F 6

I Pull engine from chassis. Do after body is removed from frame

F 1

J Remove rust from frame. Do after the engine has been pulled from the chassis

I 3

K Regrind engine valves. Do after the engine has been pulled from the chassis

I 5

L Replace carburetor and oil pump. Do after engine has been pulled from chassis and after carburetor and oil pump have been received

I,D 1

M Rechrome the chrome parts. Chrome must have been removed from the body first

E 3

N Reinstall engine. Do after valves are reground and carburetor and oil pump have been installed

K,L 1

O Put doors, hood, and trunk back on frame. The doors, hood, and trunk must have been repaired first. The frame must have had its rust removed first

H,J 1

Activity Detail Predecessor Time

P Rebuild transmission and replace brakes. Do so after the engine has been installed and the doors, hood, and trunk are back on the frame

N,O 4

Q Replace windshield. Windshield must have been received

C 1

R Put fenders back on. Fenders must have been repaired first the transmission rebuilt, and the brakes replaced

G,P 1

S Paint car. Cannot be done until the fenders are back on and windshield replaced

R,Q 4

T Reupholster interior of car. Must have received upholstery material first. Car must have been painted first

B,S 7

U Put chrome parts back on. Car must have been painted and chrome parts rechromed first

S,M 1

V Put car to the Detroit Auto Show. Must have completed reupholstery of interior and have put the chrome parts back on

T,U 2

QUESTION 3

Draw a network diagram of the project similar to figure 2.4.Determine the

activities on the critical path and the estimated slack for each activity

A 0 2 B 2 32 T 32 39

2 0 2 30 2 32 7 32 39

C 2 12 Q 12 13 S 13 17 V 39 41

10 17 27 1 27 28 4 28 32 2 39 41

D 2 9 L 9 10 R 6 7 U 17 18

7 28 35 1 35 36 1 27 28 1 38 39

E 0 1 F 1 2 G 2 6

1 21 22 1 22 23 4 23 27

M 1 4

3 35 38 H 2 8 N 10 11 P 11 15

6 30 36 1 36 37 4 37 41

I 2 3 J 3 6 O 8 9

1 29 31 3 33 36 1 36 37

K 3 8

5 31 36

START

FINISH

S= 0S= 0S= 0

S= 0S=15 S=15 S=15

S=26 S=26

S=26 S=26

S=21 S=21 S=21

S=21

S=34S=28

S=28

S=28S=27 S=30

S=21

41 days

$2400

$1000

$2100$100

$800 $100 $1700

$1750 $200

$200 $300 $1000

$100

$210$1500

$1000

$200 $900

$2000$200

$240

$100

A 0 2 B 2 32 T 32 39

2 0 2 30 2 32 7 32 39

C 2 12 Q 12 13 S 13 17 V 39 41

10 17 27 1 27 28 4 28 32 2 39 41

D 2 9 L 9 10 R 6 7 U 17 18

7 28 35 1 35 36 1 27 28 1 38 39

E 0 1 F 1 2 G 2 6

1 21 22 1 22 23 4 23 27

M 1 4

3 35 38 H 2 8 N 10 11 P 11 15

6 30 36 1 36 37 4 37 41

I 2 3 J 3 6 O 8 9

1 29 31 3 33 36 1 36 37

K 3 8

5 31 36

START

FINISH

Critical path

A – B – T – V = 41 days

QUESTION 4

Prepare a project budget showing the cost of each activity and the total for the

project.Can the project be completed within the

budget?

ACTIVITIES COST ($)

A 100

B 2100

C 800

D 1750

E 200

F 300

G 1000

H 1500

I 200

J 900

K 1000

L 200

M 210

N 200

O 240

P 20 00

Q 100

R 100

S 1 700

T 2 400

U 100

V 1 000

TOTAL COST 18 100

Total project cost

= $ 50 000 + $ 18 100

= $ 68 100

The project cost is within $ 70 000, thus it can be completed within the budget.

Will the project require more than $3600 in any week? If problems exist, how might Roberts overcome them?

Assumptions*Activities B,C and D must be paid for when the item is received*The costs of all activities that spam more than one week can be prorated*Each week contains five work days

F:\gantt chart mustang.doc

The activities cost from day 7 to day 12 = $( 850 + 640 + 250 + 350 + 650) = $ 2 740

<$3,600However,

The activities cost from day 3 to day 7

= $( 1170 + 1470 + 1400 + 850 )= $ 6 290

>$3,600

GANTT CHART

How to overcome the problem?Robert can start some activities later since some activities have slack time;

such as slack for activity k = 14 days

CONCLUSION

CPM/ PERT are very handy when it comes to

project planning because :

Assist managers to plan and manage resources effectively

Monitor schedules and cost

RASAS will be able to complete the project before the display in Detroit within the required timeline and budget

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