Major Assignment 1 on Project Management

Due: April 12, 2021; by MIDNIGHT

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Probha’s Auto Resales and Service (PARAS) consists of three car dealerships that sell and
service several makes of American and Japanese cars, two auto parts stores, a large body shop
and car painting business, and an auto salvage yard. Probha, owner of PARAS, went into the car
business 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
it is today. Her motto, “Sell ‘em today, repair ‘em tomorrow!” reflects a strategy that she refers
to in private as “Get ‘em coming and going.” Probha has always 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 restoration. She also notes the public’s growing interest in the restoration of vintage
automobiles. Probha is thinking of expanding into the vintage car 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
restoring business, she can use the Mustang as an exhibit in sales and advertising and take it to
auto shows to attract business for the new shop. Probha believes that many people want the thrill
of restoring an old car themselves, but they do not have the time to run down all 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. Probha 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 original cartons. It can be a time-consuming process to find the right part. PARAS could
also machine new parts to replicate those that are hard to find or that no longer exist. In addition,
PARAS could assemble a library of parts and body manuals for old cars to serve as an
information resource for do-it-yourself restorers. The do-it-yourselfers could come to PARAS for
help in compiling parts lists, and PARAS could acquire the parts for them. For others, PARAS
would take charge of the entire restoration. Probha 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 PARAS—especially if Probha decides to enter this new venture. Even
if she does not, the car will be a showpiece for the rest of the business. Probha asked the director
of service operations to prepare a report about what is involved in restoring the car and whether
it can be done in time for the Detroit show in 45 working days using PERT/CPM. The parts
manager, the body shop manager, and the chief 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 placed. 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 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 frame. Time: 6
days. Cost: $1,500.
I. Pull engine from chassis. Do after body is removed from frame. Time: 1 day. Cost: $200.
J. Remove rust from frame. Do after the engine has been pulled from the chassis. 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 have been 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 are reground and carburetor and oil 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
repaired first. The frame must have had its rust removed first. Time: 1 day. Cost: $240.
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 windshield. Windshield 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 upholstery 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.
Time: 1 day. Cost: $100.
V. Pull car to the Detroit Auto Show. Must have completed reupholstery of interior and have put
the chrome parts back on. Time: 2 days. Cost: $1,000.
Probha wants to limit expenditures on this project to what could be recovered by selling the
restored car. She has already spent $50,000 to acquire the car. In addition, she wants a brief
report on some of the aspects of the proposed business, such as how it fits in with RASAS’s
other businesses and what RASAS’s operations task should be with regard to cost, quality,
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 original condition—as it was “when it rolled off the line.” When
restored cars are resold, a car in mint condition commands a much higher price than one that is
just 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 original. Probha 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
Probha has already spent. In addition, Probha cannot spend more than $3,600 in any week given
her present financial position. Even though much of the work will be done by Probha’s own
employees, labor and materials costs must be considered. All relevant costs have been included
in the cost estimates.
Questions:
1. Construct a table containing the project activities, using the letter assigned to each activity, the
time estimates, and the precedence relationships.
2. Draw a network diagram, with the earliest start/earliest finish, and latest start/latest finish.
3. Create a budget table, where column heading shows “weeks (1-9)”, row heading shows
“activities (A-V)”, and the intersections show “expenses (in dollars)”, according to your
assignment of tasks into schedules.
a. Can the project be completed in time (45 working days = 9 weeks), and within budget?
b. Will the project require more than $3,600 in any week?
- Assume activities B, C, and D will be paid all at once at the scheduled finish time of each
activity.
- Assume 5 working days per week, and when a certain activity takes more than a week, the
expenses (except for activities B, C, and D) are prorated into each week’s expense.
So, for instance, if a certain activity takes 8 days to complete, and the activity costs is $1200: this
means the activity's per day cost would be $1200 / 8 days = $150 per day. Then, if you were to
schedule this activity for 3 days in one week, and 5 days in the following week, the budget
should be allocated as $150 x 3 = $450 on the first week, and $150 x 5 = $750 on the second
week.