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George and Harry Haygood are building contractors who specialize in the construction of private home dwellings, storage warehouses, and small businesses (less than 20,000 sq. ft. of floor space). Both George and Harry entered a carpenter union's apprenticeship program in the early 1990s and, upon completion of the apprenticeship, became skilled craftsmen in 1996. Before going into business for themselves, they worked for several local building contractors in the Detroit area.

Typically, the Haygood Brothers submit competitive bids for the construction of proposed dwellings. Whenever their bids are accepted, various aspects of the construction (electrical wiring, plumbing, brick laying, painting, and so forth) are subcontracted. George and Harry, however, perform all carpentry work. In addition, they plan and schedule all construction operations, frequently arrange interim financing, and supervise all construction activities.

The philosophy under which the Haygood Brothers have always operated can be simply stated:''Time is money." Delays in construction increase the costs of interim financing and postpone the initiation of their building projects. Consequently, they deal with all bottlenecks promptly and avoid all delays whenever possible. To minimize the time consumed in a construction project, the Haygood Brothers use PERT.

First, all construction activities and events are itemized and properly arranged (in parallel and sequential combinations) in a network. Then time estimates for each activity are made, the expected time for completing each activity is determined, and the critical (longest) path is calculated. Finally, earliest times, latest times, and slack values are computed. Having made these calculations, George and Harry can place their resources in the critical areas to minimize the time of completing the project.

The following are the activities that constitute an upcoming project (home dwelling) of the Haygood Brothers:

1. Arrange financing (AB).
2. Let subcontracts (BC).
3. Set and pour foundations (CD).
4. Plumbing (CE).
5. Framing (DF).
6. Roofing (FG).
7. Electrical wiring (FH).
8. Installation of windows and doors (FI).
9. Ductwork and insulation (including heating and cooling units) (FJ).
10. Sheetrock, paneling, and paper hanging (JK).
11. Installation of cabinets (KL).
12. Bricking(KM).
13. Outside trim (MN).
14. Inside trim (including fixtures) (LO).
15. Painting (OP).
16. Flooring (PQ).

The PERT diagram is shown in Figure 1, and the optimistic (a), most likely (m), and pessimistic (b) time estimates, are shown in Table 1. Any activities in the network, but not in Table 1, are dummy activities that consume no time.

TABLE 1
Haygood Brothers Construction Co.

Figure 1

DISCUSSION QUESTIONS

1. What is the time length of the critical path? What is the significance of the critical path?
   
   
   
   

2. Compute the amount of time that the completion of each event can be delayed without affecting the overall project.
   
   
   
   

3. The project was begun on August 1. What is the probability that this project can be completed by September 30? (Note: Scheduled completion time = 60 days.)
   
   
   
   

The Shale Oil Company contains several operating units that comprise its Aston, Ohio, manufacturing complex. These units process the crude oil that is pumped through and transform it into a multitude of hydrocarbon products. The units run 24 hours a day, seven days a week, and must be shut down for maintenance O" a predetermined schedule. One such unit is Distillation Unit No. 5, or DU5. Studies have shown that DU5 can operate only 31/2 years without major equipment breakdowns and excessive loss of efficiency. Therefore, DU5 is shutdown every 31/2 years for cleaning, inspection, and repairs.

DU5 is the only distillation unit for crude oil in the Aston complex, and its shutdown severely affects all other operating units. Some of the production can be compensated by Shale refineries in other locations, but the rest must be processed before the shutdown and stored. Without proper planning, a nationwide shortage of Shale gasoline could occur. The timing of DU5's shutdown is critical, and the length of time the unit is down must be kept to a minimum to limit production loss. Shale uses PERT as a planning and controlling tool to minimize shutdown time.

The first phase of a shutdown is to open and clean the equipment. Inspectors can then enter the unit and examine the damage. Once damages are determined, the needed repairs can be carried out. Repair times can vary considerably depending on what damage the inspection reveals. Based on previous inspection records, some repair work is known ahead of time. Thorough cleaning of the equipment is also necessary to improve the unit's operating efficiency. The table on below lists the many maintenance activities and their estimated completion times.

Preventive Maintenance of DU5

	TIME ESTIMATES (IN DAYS)
ACTIVITIES	Optimistic	Most Likely	Pessimistic
1-2 Circulate wash water throughout unit	1	2	2.5
2-3 Install blinds	1.5	2	2.5
3-4 Open and clean vessels and columns	2	3	4
3-5 Open and clean heat exchangers	1	2	3
3-6 Open and clean furnaces	1	2	4
3-7 Open and clean mechanical equipment	2	2.5	3
3-8 Inspect instrumentation	2	4	5
4-9 Inspect vessels and columns	1	2	3
5-10 Inspect heat exchanger shells	1	1.5	2
5-11 Inspect tube bundles	1	1.5	2
6-12 Inspect furnaces	2	2.5	3
6-17 Retube furnaces	15	20	30
7-13 Inspect mechanical equipment	1	1.5	2
7-18 Install new pump mechanical seals	3	5	8
8-19 Repair instrumentation	3	8	15
9-14 Repair vessels and columns	14	21	28
10-16 Repair heat exchanger shells	1	5	10
11-15 Repair tube bundles; retube	2	5	10
12-17 Repair furnaces	5	10	20
13-18 Repair mechanical equipment	10	15	25
14-20 Test and close vessels and columns	4	5	8
15-16 Install tube bundles into heat exchanger shells	1	2	3
16-20 Test and close heat exchangers	1	2	2.5
17-20 Test and close furnaces	1	2	3
18-20 Test and close mechanical equipment	1	2	3
19-20 Test instrumentation	2	4	6
20-21 Pullblinds	1.5	2	2.5
21-22 Purge all equipment with steam	1	3	5
22-23 Start up unit	3	5	10

DISCUSSION QUESTIONS

1. Determine the expected shutdown time and the probability the shutdown can be completed one week earlier.

2. What are the probabilities that Shale finishes the maintenance project one, two, three, four, five, or six days earlier?

3. Shale Oil is considering increasing the budget to shorten the shutdown. How do you suggest the company proceed?

1. How does project management help a firm like Johnson Controls meet the requirements of the Florida International University contract?
   
   
   
   

1. Identify the major components of the project that Johnson Controls performed for Caltrans.
   
   
   
   

2. What type of negotiation probably took place to develop the contract between Johnson Controls and Caltrans?
   
   
   
   

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