Question

Estimated durations are provided for four types of activity

	Analysis	Production	Testing	Installation
Predecessors	None	50% of analysis	Production	Testing
Cost per week	$7000	$15000	$8000	$3000
Crews on hand	2	3	1	1

You can split jobs, but not across crews doing the same function. (So you could do a week of analysis on A1 with Analysis Crew 1, then have them do something else, and come back later and do the other 3 weeks on A1. But you can’t have Analysis Crew 1 and Analysis Crew 2 both work on the same project.) Production can’t start until 50% of Analysis is done and you can’t finish Production until Analysis is completely done. You can hire new crews and you have to hire staff prior to using them, because there is a four week training period to indoctrinate people into your company’s way of doing things (training is paid at the full rate for that type of crew).  So therefore, starting times may have to wait for your indoctrination program unless you have hired people ahead. For those periods after the four week orientation when you do not have work for them, you can rent them out to others at a loss of $2000 per week per crew. You can lay off crews after their work is done.

Create a Gantt chart scheduling the following jobs. If you miss the deadlines there is a pentalty of $50,000 per week. The revenues are collected at the end of the week the job is completed.

Job	Analysis	Production	Testing	Installation	Due by end of	Revenue
A1	4 weeks	7 weeks	3 weeks	2 weeks	Week 20	$200,000
A2	4 weeks	6 weeks	2 weeks	2 weeks	Week 20	$210,000
A3	6 weeks	9 weeks	3 weeks	3 weeks	Week 30	$250,000
A4	8 weeks	12 weeks	5 weeks	4 weeks	Week 40	$350,000
A5	8 weeks	14 weeks	6 weeks	5 weeks	Week 40	$400,000

Create a cash flow plan for maximum profit that shows:

Weeks each crew is to work, what they are to work on, cash flow

Answer 1

Here we have to preapare a cash flow plan for maximum profit

Salary for crew of analysis
A1	18	7000	0	5000	126000
A2	12	7000	0	5000	84000
Salary for crew of production
P1	30	15000	2	013000	424000
P2	23	15000	0	13000	345000
Salary for crew of testing
T1	35	8000	13	6000	202000
Salary for crew of installation
I1	39	3000	22	1000	95000
Total					1276000

Now we have prepare the revenue for project Cash flow

Total Revenue for project
A1	200000
A2	2100000
A3	250000
A4	350000
A5	400000
Total	1410000
Cash flow	134000