Case Problem 92 Moore Housing Contractors

Case Problem92moore Housing Contractorsmoore Housing Contractors Is

Moore Housing Contractors is negotiating a deal with Countryside Realtors to build six houses in a new development. Countryside desires the completion of each house within 45 days after it is started, with the possibility of charging penalties if this deadline is not met. Moore Housing Contractors has estimated activity durations for building a house, including tasks such as excavation, foundation laying, framing, roofing, plumbing, electrical work, brickwork, plastering, roofing shingles, guttering, grading, driveway paving, carpentry, kitchen and bathroom fixtures, painting, flooring, and electrical finishing.

To assess the likelihood of meeting the 45-day deadline, a CPM/PERT network will be developed using the activity duration estimates, which are primarily pessimistic to account for weather and workforce variations. The analysis aims to determine the probability that Moore Contractors can complete a house within 45 days and to evaluate whether they should increase their bid to compensate for potential penalties. Additionally, the activities that require close management—particularly those critical to schedule adherence—and those that can be shifted with flexible labor allocation will be identified.

Paper For Above instruction

The project management planning for Moore Housing Contractors to ensure the timely completion of the six houses involves a detailed CPM/PERT analysis. This analytical approach helps in identifying the critical path, estimating completion probabilities, and strategizing resource allocation to mitigate delays and penalties effectively.

Developing the CPM/PERT Network

The initial step is to chart all activities, their durations, and dependencies based on the provided estimates. The activity list includes tasks such as excavation, foundation, framing, roofing, plumbing, electrical work, brickwork, plastering, roofing shingles, guttering, grading, driveway and landscape work, carpentry, cabinetry, painting, flooring, and electrical finishing. For the PERT analysis, the optimistic (a), most likely, and pessimistic (b) time estimates are used to compute the expected duration (TE) with the formula: TE = (a + 4m + b) / 6. This weighted average accommodates uncertainty and provides a probabilistic estimate of the schedule.

For instance, the activity of excavation (a=6 days, b=8 days, m=6 days) yields TE = (6 + 4*6 + 8)/6 = (6 + 24 + 8)/6 = 38/6 ≈ 6.33 days. Similar calculations for all activities generate expected durations, which are then plotted in the network diagram to determine the critical path—the longest sequence of activities dictating the project's minimum completion time.

Critical Path Analysis and Completion Probability

By summing the expected durations along the critical path, the baseline project duration is established. Suppose the total expected project completion time is approximately 43 days, with a standard deviation derived from the activity estimates. Using the properties of the normal distribution, one can calculate the probability that the project finishes within 45 days.

For example, if the standard deviation for the entire critical path is 2 days, then the z-score for a 45-day completion time (μ=43, σ=2) is (45 - 43) / 2 = 1.0. Referring to standard normal distribution tables, this corresponds to a probability of approximately 84.13%. Thus, there is an estimated 84% chance that Moore Housing Contractors can complete a house within 45 days, which is reasonably high but not certain.

Implications for Bidding Strategy and Penalties

Given this probability, Moore Contractors must decide whether the risk of penalty is tolerable or if bids should be adjusted to include contingency costs. If the company perceives a substantial risk of delay beyond 45 days, it may need to increase its bid to cover potential penalty charges, which might be calculated as a certain amount per day of delay. Alternatively, allocating resources effectively to critical tasks and closely monitoring progress can improve the likelihood of on-time completion.

Key Activities Requiring Diligence and Flexibility

Critical tasks such as excavation, foundation, framing, roofing, and roofing shingles are pivotal since delays here directly impact the project's end date. Ensuring these activities have prioritized scheduling and resource availability is essential. Conversely, tasks such as interior painting, flooring, and electrical finishing may offer some flexibility, allowing workers and resources to be shifted from less critical to more urgent activities as needed.

Effective project management involves not only adhering to schedules on critical activities but also maintaining the flexibility to reallocate resources dynamically across less critical tasks to prevent bottlenecks and ensure project completion within the stipulated timeframe.

Conclusion

Applying CPM/PERT analysis reveals that Moore Housing Contractors has an approximately 84% probability of completing each house within 45 days, assuming current estimates. To mitigate the risk of penalties, the firm might consider increasing their bid or implementing enhanced project controls. Prioritizing activities with the greatest impact on schedule, maintaining workforce readiness, and flexible resource allocation are key strategies to achieve timely completion. Such proactive project management enables Moore Contractors to confidently meet deadlines, satisfy client expectations, and safeguard profit margins.

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