Question

Past Paper (Q2) 1. What are examples of quality prevention, appraisal and failure costs. (5 marks) 2. Discuss possible reasons for reducing project duration. Discuss the options that are available for accelerating project completion (5 marks) 3. Consider the following information. a. Draw the project network and determine the critical path for the network. (3 marks) b. Compute the duration that represents the lowest total project cost. (10 marks) c. What is this cost? (2 marks) (Note: You may find it convenient to plot direct, indirect and total costs for the project) Direct costs Crash Normal Cost $ Activity Max Predecessor Cost Time Time Cost $ crash slope (weeks) (weeks) time 3 A 3 1500 3500 1500 6700 B A 6 C 5 2000 4 3600 2500 10000 7 A 7 2500 13800 5 3 10000 C 8000 2 G 3 4500 12000 2 5600 E,F.G H 2 1 12800 The above costs are direct costs. The project also carries indirect costs of $800/week.

Answer 1

answer-

1- Cost of quality (COQ) is defined as a methodology that allows an organization to determine the extent to which its resources are used for activities that prevent poor quality, that appraise the quality of the organization’s products or services, and that result from internal and external failures .

Prevention costs are incurred to prevent or avoid quality problems. These costs are associated with the design, implementation, and maintenance of the quality management system. They are planned and incurred before actual operation,

examples of quality prevention costs are-

• Product or service requirements: establishment of specifications for incoming materials, processes, finished products, and services
• Quality planning: creation of plans for quality, reliability, operations, production, and inspection
• Quality assurance: creation and maintenance of the quality system
• Training: development, preparation, and maintenance of programs

Appraisal costs are associated with measuring and monitoring activities related to quality. These costs are associated with the suppliers’ and customers’ evaluation of purchased materials, processes, products, and services to ensure that they conform to specifications .

examples of appraisal costs are-

• Verification: checking of incoming material, process setup, and products against agreed specifications
• Quality audits: confirmation that the quality system is functioning correctly
• Supplier rating: assessment and approval of suppliers of products and services

Internal failure costs are incurred to remedy defects discovered before the product or service is delivered to the customer. These costs occur when the results of work fail to reach design quality standards and are detected before they are transferred to the customer.

examples are-

• Waste: performance of unnecessary work or holding of stock as a result of errors, poor organization, or communication
• Scrap: defective product or material that cannot be repaired, used, or sold
• Rework or rectification: correction of defective material or errors
• Failure analysis: activity required to establish the causes of internal product or service failure.

External failure costs are incurred to remedy defects discovered by customers. These costs occur when products or services that fail to reach design quality standards are not detected until after transfer to the customer.

examples are-

• Repairs and servicing: of both returned products and those in the field
• Warranty claims: failed products that are replaced or services that are re-performed under a guarantee
• Complaints: all work and costs associated with handling and servicing customers’ complaints
• Returns: handling and investigation of rejected or recalled products, including transport costs

2-the reasons for project duration can be meeting the customer's demand on time.There is a need to complete the project before the planned date to respond customers’ demand.

another reason for reducing project duration occurs when unforeseen delays—for example, adverse weather, design flaws, and equipment breakdown— cause substantial delays midway in the project.Getting back on schedule usually requires compressing the time on some of the remaining critical activities. The additional costs of getting back on schedule need to be compared with the consequences of being late. This is especially true when time is a top priority.

Imposed deadlines” is another reason for reducing project duration.For example, a politician makes a public statement that a new law building will be available in two years.Or the president of a software company remarks in a speech that new advanced software will be available in one year.

the options that can help to accelerate the project completion are -

Adding Resources-The most common method for shortening project time is to assign additional staff and equipment to activities. There are limits, as to how much speed can be gained by adding staff. Doubling the size of the workforce will not certainly reduce completion time by half.

Outsourcing Project Work- Sometimes the organization -subcontract out the project activities to shorten the project time. The subcontractor may have access to superior technology or expertise that will accelerate the completion of the activity. Further, subcontracting also frees up resources that can be assigned to critical activity and will ideally result in a shorter project duration.

Scheduling Overtime-The easiest way to add more labor to a project is not to add more people, but to schedule overtime. If a team work 50 hrs a week instead of 40, it might accomplish 20% more. By scheduling overtime you avoid the additional coordination and communication encountered when new people are added.

Establish a Core Project Team-One of the advantages of creating a dedicated core team to complete a project is speed. Assigning professionals full time to a project avoids the hidden cost of multi-tasking. This singular focus creates a shared goal that can bind a diverse set of professionals into a highly cohesive team capable of accelerating project completion.

Fast-Tracking:Sometimes it is possible to re-arrange the logic of the project network so that critical activities are done in parallel rather than sequentially. One of the most common methods for restructuring activities is to change a finish -to-start relationship to start -to-start relationship.

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