Reference no: EM132178239

Roberts Auto Sales and Service (RASAS) consists of three car dealerships that sell and service several makes and models of American and Japanese cars, two auto parts stores, a large body shop and car painting business, and an auto salvage yard. Vicky Roberts, owner of RASAS, went into the car busniess when she inherited a Ford dealership from her FAther. She was able to capitalize on her knowledge and experience to build her business into the diversified and successful mini-empire that it is today. Her motto, "Sell em' today, repair em' tomorrow!' refelcts a strategy that she refers to in private as "Get em' coming and going."

Roberts has alwaya retained a soft spot in her heart for high performance Mustangs and just acquired a 1965 Shelby Mustang GT 350 that needs a lot of resoration. She also notes the public's growing interest in the restoration of vintage automobiles. Roberts is thinking of expanding into the vintage restoration business and needs help in assessing the feasibility of such a move. She wants to restore her 1965 Shelby Mustang to mint condition, or as close to mint condition as possible. If she decides to go into the car restoration business she can use the Mustang as an exihibit in sales and advertising, and take it to auto shows to attract business for the new shop.

Roberts believes that many people want the thrill of restoring an old car themselves, but they do not have the time to run down all of the old parts. Still, others just want to own a vintage auto because it is different and many of them have plenty of money to pay someone to restore an auto for them.

Roberts wants the new business to appeal to both types of people. For the first group, she envisions serving as a parts broker for NOS (New old stock), new parts that were manufactured many years ago and are still packaged in their orginal cartons. It can be a time-consuming process to find the right part. RASA could also machine new parts to replicate those that are hard to find or that no longer exist.

In addition, RASA could assemble a library of parts and body manuals for old cars to serve as an infromation resource for do-it yourself restorers. The do-it yourself restorers could come to RASA for help in compiling parts lists, and RASA could acquire the parts for them. For others, RASA would take charge of the entire restoration.

Roberts asked the director of service operations to take a good look at her Mustang and determine what needs to be done to restore it to the condition it was in when it came from the factory more than 40 years ago. She wants to restore this car in time to exhibit it at the Detroit Auto Show. If the car gets a lot of press, it will be a real public relations coup for RASA - esprecially if Roberts decides to enter this venture. Even if she doesn't, the car will be a showpiece for the rest of the business.

Roberts asked the director of service operations to prepare a report about what is involved in restorign the car and whether it can be done in time for the Detroit Auto Show in 45 working days using PERT/CPM. The parts manager, the body manager, and the cheif mechanic have provided the following estimates of times and activities that need to be done, as well as cost estimates:

a. order all needed material and parts (upholstery, windshield, carburetor, and oil pump. Time: 2 days. Cost(telephone calls, and labor): $100

b. receive upholstery material for seat covers. Cannot be done until order is placed. Time 30 days. Cost: $2,100

c. receive windshield. Cannot be done until order is place. Time 10 days. Cost $800.

d. Receive carburetor and oil pump. Cannot be done until order is placed. Time 7 days. Cost: $1,750

e. remove chrome from the body. Can be done immediately. Time 1 day. Cost $200.

f. remove body (doors, hood, trunk, and fenders) from frame. Cannot be done until chrome is removed. Time 1 day. Cost $300.

g, have fenders repaired by body shop. Cannot be done until body is removed from frame. Time 4 days. Cost $1,000

h. repair doors, trunk, and hood. Cannot be done until body is removed from the frame. Time 6 days. Cost $1,500

i. pull engine from chassis. Do after body is removed from the frame. Time 1 day. Cost $200.

j. Remove rust from the frame. Do after engine has been pulled from the chasis. Time 3 days. Cost $900

k. regrind engine valves. do after the engine has been pulled from the chassis. Time 5 days. Cost $1,000

l. replace carburetor and oil pump. Do after engine has been pulled from chassis and after carburetor and oil pump received. Time 1 day. Cost $200.

m. rechrome the chrome parts. Chrome must have been removed from the body first. Time 3 days. Cost $210

n. reinstall engine. do after valves reground and carburetor and oli pump have been installed. Time 1 day. Cost $200

o. put doors, hood, and trunk back on frame. the doors, hood and trunk, must have been replaced before it can go back on the body. The frame must have had the rust removed first. Time 1 day. Cost $100.

p. rebuild transmission and replace brakes. do so after the engine has been reinstalled and the doors, hood, and trunk are back on the frame. Time 4 days. Cost $2,000

q. replace windsheild. winshield must have been received. Time 1 day. Cost $100

r. put fenders back on, the fenders must have been repaired first, the transmission rebuilt, and the brakes replaced. Time 1 day. Cost $100

s. Paint car. cannot be done until the fenders are back on and windshield replaced. Time 4 days. Cost $1,700

t. reupholster interior of car. must have received upholstered material first. Car must have been painted first. Time 7 days. Cost $2,400

u. put chrome parts back on. Car must have been painted, and chrome parts rechromed first.

v. Pull car to Detroit Auto Show. must have completed upholstery of interior and have put the chrome parts back on. Time 2 days Cost $1,000

Roberts wants to limit expenditures on this project to what could be recovered by selling the restored car. She has already spent $50,000 to acqurie the car. In addiiton, she wants a brief report of some of the aspects of the proposed business, such as how it fits with RASA's other businesses and what RASA's operations task should be with reguard to cost, quality and customer service, and flexibility.

In the restoration business there are various categories of restoration. A basic restoration gets the car looking great and running, but a mint condition restoration puts the car back in the orginial condition. When restored cars are resold, a car in mint condition commands a higer price than one with a basic restoration. As cars are restored, they can also be customized. That is, something is put on the car that could not have been on the orginal. Roberts wants a mint condition restoration for her Mustang without customization. (The proposed new business would accept any kind of restoration a customer wanted.)

The total budget cannot exceed $70,000 including the $50,000 Roberts has already spent. In addition, Roberts cannot spend more than $3,600 in any week given her present financial position. Even though much of the work will be done by Robert's own employees, labor and material costs must be considered. All relevent costs have been including in the cost estimates.

Questions

1. using the information provided, prepare the report that Roberts requested, assuming that the project will be done immediately. Assume 45 working days are available to complete the project, including transportating the car to Detriot before the auto show begins. Your report should briefly discuss the aspects of the proposed new business, such as the competitive priorities that Roberts asked about it.

2. Construct a table containing the project activities using the letter assigned to each activity, the time estimates, and the precedence relationships from which you will assmeble the network diagram

3. draw a network diagram. determine the activities on the critical path and estimated slack for each activity.

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? will the project require more than $3,600 in any week? To answer this question, assume that activities B, C and D must be paid for when the item is received(the earliest finish time for the activity). Assume that the costs of all other activities that span more than one week can be prorated. Each week contains 5 work days, if problems exist, how might Roberts overcome them?