How much money is saved with the most economical plan

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Reference no: EM131920689

Problem

The air conditioning unit of the Home State Insurance Company's new office wing is not functioning.

The compressor and the fan are out because the system was improperly wired. After much discussion, the general contractor has agreed to replace the whole system. The agreement specifies penalty costs of $300 for every day over 15 that the replacement requires.

In addition, the contractor estimates that it will cost $50 in indirect project costs each day just to administer the project. What is the most economical length of time to complete the repairs? How does the contractor achieve this?

How much money is saved with the most economical plan compared to the "normal duration" plan? Summarized data for the project is given below.

Immediate Predecessors		Minimum Duration	Crash Cost
Immediate Predecessors	Activity	Minimum Duration	Normal Duration	(in $/day)
A: Place order	-	3	2	$50
B: Pull old compressor	A	4	2	$100
C: Remove old fan	A	6	4	$200
D: Build new unit	A	4	4	-
E: Remove old unit	B	5	2	$400
F: Modify duct work	C	3	2	$80
G: Ship new unit	D	7	3	$120
H: Install new unit	F, G	3	3	-
I: Start up new unit	E,H	2	2	-

Reference no: EM131920689

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