Igloo Frozen Yogurt

Part 1:Igloo Foods, owners of the Igloo Frozen Yogurt chain, watched as the company began a program to test market its product in London, England. The target opening date for the first store was 122 days from the inception of the project. If the store proves successful, Igloo plans to open up at least a two dozen such stores across Europe. The project consists of 18 work packages summarized in Table 1 below, together with budget information and time estimates.

Igloo is planning a big gala “grand opening” for the morning of day 123 with visiting dignitaries and a popular rock band. If the project is finished a week earlier (in 115 days), the grand opening can take place a week earlier at a saving of $10,000 to Igloo (the rock band is willing to reduce its pay for the performance if the date changes because they need to prepare for a long tour). If the project is not completed in 122 days, Igloo will suffer a $100,000 loss. To reduce the probability the event will need to be canceled Igloo is considering four suggestions:

1.At a cost of $ 8,000 activity N can be expedited such that the optimistic, most likely and pessimistic times are reduced by 3 days each.

2.At a cost of $10,000 the time estimates of activity G are reduced by 50%.

3.At a cost of $3000 the pessimistic time of activity Rcan be reduced to 9 days.

4.Take the best combination of the three alternatives mentioned above.

(a) Prepare a report that will alert Igloo as to whichjobs are critical and which have some slack. Use the template to solve the project. Do not include any of the 4 possible changes suggested above to expedite the project. What is the expected completion time of the project? What is the probability the gala will have to be canceled?

(b)Which one of the 4 alternatives do you recommend Igloo chooses based on expected total cost? Note, that selecting none of the four is also a possibility (making the total number of alternatives to check – 5). Apply a quantitative approach to answer (not your own feeling!)

Part 2: Fifty-eight days into the project the Board of Directors has received the status report summarized in Table 2 below. To answer part (c) and (d) assume your recommendation regarding the best way to expedite the project (made in section (b) above) was accepted.

(c)Analyze whether the project is ahead or behind schedule.Base your answer on expected value of activity completion times.

(d)Would you suggest additional alternative be selected now out of the four alternatives shown above? If so, what should be done now on expected cost ground? Assume here that theexpected completion time and the standard deviation for each unfinished work package are reduced by an amount proportional to the completion percentage of the work package (for example, if 75% of an activity are completed, then the both the expected time to complete the activity and the standard deviation are reduced by 75%).

Table 1

Activity / Precedence / T I M E S (Days) / Budget ($)
Optimistic / Likely / Pessimistic
a / 5 / 9 / 13 / 0
b / 6 / 14 / 34 / 2000
c / a / 8 / 13 / 30 / 0
d / c / 4 / 11 / 18 / 15,000
e / d / 9 / 10 / 11 / 4,000
f / a / 19 / 38 / 63 / 40,000
g / e,f / 46 / 75 / 80 / 260,000
h / b / 10 / 30 / 50 / 15,000
i / h / 9 / 16 / 17 / 10,000
j / f,i / 10 / 17 / 30 / 150,000
k / f,i / 16 / 22 / 28 / 15,000
l / k / 8 / 22 / 24 / 100,000
m / k,j / 15 / 23 / 43 / 18,000
n / m / 8 / 10 / 18 / 7,000
o / a / 30 / 36 / 60 / 12,000
p / d,o / 41 / 47 / 77 / 90,000
q / p / 4 / 5 / 6 / 80,000
r / g,q / 3 / 6 / 21 / 26,000

Table 2

Activity / Percent completed
a / 100%
b / 100%
c / 100%
d / 100%
e / 100%
f / 100%
g / 25%
h / 100%
i / 100%
j / 75%
k / 25%
l / 0%
m / 0%
n / 0%
o / 50%
p / 0%
q / 0%
r / 0%