CPM/PERT Approach To Planning For Moore Housing Contra

CPM/PERT Approach to Plan of Action for Moore Housing Contractors

Moore Housing Contractors is a home building company owned by Mary and Sandy Moore. The Moores are negotiating a deal with Countryside Realtors to build six homes in their new development. To prepare for negotiations, Moore Housing must ensure they can meet the conditions imposed by Countryside Realtors, which include starting construction in late winter or early spring, with the expectation of completing the homes within 45 days of commencement. Countryside Realtors intends to sell the homes as they are being completed, possibly even before full completion.

Counter to the project timeline, Countryside Realtors has stipulated a 45-day construction window and has expressed willingness to impose penalties for delays. Therefore, Moore Housing must evaluate whether they can meet this deadline or incorporate potential penalties into their bid. To this end, the project management team has developed a Critical Path Method/Program Evaluation and Review Technique (CPM/PERT) network. This network maps out activities, their sequences, and estimated durations, with the goal of assessing schedule feasibility and risk.

Figure 1 illustrates the list of activities involved in building each house, including their normal durations and sequences. The critical path, identified as activities A, B, E, G, K, M, Q, T, V, and W, represents the sequence of tasks that determine the minimum project duration. These activities are essential; any delay along the critical path could jeopardize the entire schedule, as they have no slack or float time allowed. Conversely, non-critical activities, such as D (lay drain tiles) with 26 days of slack, or activities I, L, N, O, P, and R—covering tasks like installing windows, brickwork, roofing, gutters, grading, driveway, and landscaping—have some flex, allowing resource reallocation if delays are detected.

The CPM/PERT analysis results, summarized in Figure 2, exhibit the earliest and latest start and finish times for each activity, their variances, and the identification of the critical path. The total project duration forecast based on the analysis is approximately 45.83 days, with a probability of around 36.47% that the project will be completed within 45 days. Given this, Moore Housing must decide whether to accept the current bid, factoring in the risk of penalties should delays occur.

Given the low probability of completing the project within 45 days, it is prudent for Moore Housing to increase their bid to account for potential penalties. This risk assessment emphasizes the importance of schedule management and contingency planning. Implementing strategies like resource reallocation, parallel task execution, and tight schedule monitoring can increase the likelihood of on-time completion. Nevertheless, the project team must communicate these risks during negotiations and adjust their bid accordingly to cover penalties, thereby safeguarding profits and maintaining contractual commitments.

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Effective project management is vital for contractors intending to meet strict deadlines, especially when penalties are involved. In the case of Moore Housing Contractors, completing six homes within a 45-day timeframe is a challenging endeavor, necessitating a well-planned schedule analysis using the CPM/PERT methodology. This approach provides an analytical framework for assessing schedule feasibility , identifying critical activities, and quantifying the probability of completing the project on time.

The CPM/PERT methodology combines deterministic activity durations with probabilistic analysis, aiding decision-making under uncertainty. For Moore Housing, initial activity durations were estimated based on past experience and expert judgment, allowing the development of a project network. This network visually represents task sequences, durations, and dependencies, with critical path identification being central for schedule control. The critical path consists of activities such as A (excavation), B (foundation), E (sewer drains), G (basement floor), K (furnace installation), M (plasterboard), Q (kitchen cabinetry), T (interior finishes), V (final electrical), and W (flooring), which collectively determine the project's duration.

The analysis revealed a total project duration of approximately 45.83 days, with a total variance corresponding to a standard deviation of about 2.41 days. Using probabilistic calculations, such as the Z-score, the likelihood of completing within 45 days was calculated to be roughly 36.47%, indicating significant risk. This low probability suggests Moore Housing needs to either improve schedule efficiency or adjust their bid to mitigate risks. To improve schedule control, strategies such as resource leveling, increasing workforce, or overlapping activities could be employed. Additionally, contingency planning, including buffer periods and flexible resource allocation, can help absorb potential delays.

In the context of bidding and contractual obligations, the analysis underscores the importance of risk premium in bids. Moore Housing should incorporate potential penalties into their bid, likely increasing it to cover the estimated costs of delays if they occur. This proactive approach safeguards project profitability and ensures contractual obligations are met without jeopardizing the company's financial stability. By adjusting bids, enhancing schedule management, and maintaining close oversight during construction, Moore Housing can improve their chances of on-time completion.

In conclusion, CPM/PERT analysis serves as an essential tool for project managers to identify critical activities, understand schedule risks, and formulate strategies to meet deadlines. For Moore Housing Contractors, embracing such analytical methods enhances decision-making, improves scheduling accuracy, and builds confidence in meeting client expectations—even under tight deadlines with penalty clauses. Effective risk management, coupled with strategic planning, is the cornerstone of successful project execution in residential construction.

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