University of the East – Manila

College of Business Administration

SY 2017-2018, 2nd Semester

CASE STUDY: Haygood Brothers

Construction Company

Bejo, Christine D.
BBM114- 2M
MWF 3:00-4:00PM
February 14, 2018
Introduction

Haygood Brothers Construction Company is composed of brothers George and Harry Haygood,
who are building contractors specializing in the construction of private home dwellings, storage
warehouses, and small businesses. They both became skilled craftsmen in 1996, after entering a
carpenter union’s apprenticeship.

The Haygood Brothers usually submit competitive bids for the construction of proposed
dwellings, and whenever their bids are accepted, various aspects of construction are
subcontracted. These include electrical wiring, plumbing, brick laying, painting, and so forth.
George and Harry perform all carpentry work and they also plan and schedule all construction
operations.

The philosophy of the Haygood Brothers is “Time is Money”, which means that delays in
construction increase the costs of interim financing and postpone the initiation of their projects.
Thus, they deal with all bottlenecks promptly and avoid all delays whenever possible. The
Haygood Brothers uses the Program Evaluation and Review Technique (PERT) to minimize the
time consumed in constructing a project.

In using the PERT, all construction activities and events are itemized and properly arranged in a
network. Then, time estimates for each activity are made, the expected time for completing each
activity is determined, and the critical path is calculated. Finally, earliest times, latest times, and
slack values are computed.

Upon making these calculations, George and Harry can place their resources in the critical areas
to minimize the time of completing the project. For the current project, Haygood Brothers started
on August 1 and the scheduled completion date is on September 30.
The following are the activities that constitute the current project of the Haygood Brothers:

Activity a m b

AB – Arrange Financing 4 5 6

BC – Let Subcontracts 2 5 8

CD – Set and Pour Foundations 5 7 9

CE – Pluming 4 5 6

DF – Framing 2 4 6

FG – Roofing 3 5 9

FH – Electrical Wiring 4 5 6

FI – Installation of Windows and Doors 3 4 7

FJ – Ductwork and Insulation 5 7 9

JK – Sheetrock, paneling, paper hanging 10 11 12

KL – Installation of Cabinets 4 6 8

KM – Bricking 7 8 9

MN – Outside Trim 4 5 10

LO – Inside Trim 5 7 9

OP – Painting 5 6 7

PQ – Flooring 2 3 4

Table 1 : Activities with optimistic (a), most likely (m), and pessimistic (b) time estimates
Network Diagram

A B C

D E

G H I J

L M

O N

P Q

Figure 1 : Network Diagram

Alternative Solutions
PATHS:
1. A B C DFGKLOPQ 48.33333
2. A B C DFHKLOPQ 48
3. A B C DFIKLOPQ 47.33333
4. A B C DFJKLOPQ 61
5. A B CE JKLOPQ 48
6. A B C DFGKMNPQ 43
7. A B C DFHKMNPQ 42.66667
8. A B C DFIKMNPQ 42
9. A B C DFJKMNPQ 55.66667
10. A B CE JKMNPQ 42.66667

OCT = 61

Critical Path = AB-BC-CD-DF-FJ-JK-KL-LO-OP-PQ

Activity t δ δ^2 CP ES EF LF LS TS
AB 5 0.3333 0.1111 0 5 5 0 0
BC 5 1 1 5 10 10 5 0
CD 7 0.6667 0.4444 10 17 17 10 0
CE 5 0.3333 10 15 28 23 13
DF 4 0.6667 0.4444 17 21 21 17 0
FG 5.3333 1 21 26.33333 33.33333 28 7
FH 5 0.3333 21 26 33.33333 28.33333 7.333333
FI 4.3333 0.6667 21 25.33333 33.33333 29 8
FJ 7 0.6667 0.4444 21 28 28 21 0
JK 11 0.3333 0.1111 24 39 39 24 0
KL 6 0.6667 0.4444 39 45 45 39 0
KM 8 0.3333 39 47 52.33333 44.33333 5.333333
MN 5.6667 1 41 52.66667 58 46.33333 5.333333
LO 7 0.6667 0.4444 45 52 52 45 0
OP 6 0.3333 0.1111 52 58 58 52 0
PQ 3 0.3333 0.1111 58 61 61 58 0
Total 1.914854216

Table 2 : Single time, SD, Earliest Start, Earliest Finish, Latest Finish, Latest Start, and Slack Time
Interpretation:

a. The Optimal Completion Time is 61 days with the Critical Activities AB, BC, CD,
DF, FJ, JK, KL, LO, OP, and PQ.
b. Critical Activities = AB, BC, CD, DF, FJ, JK, KL, LO, OP, PQ
c. Non-Critical Activities = CE, FG, FH, FI, KM, MN
The non-critical activities can be delayed up to the number of days computed in the
table under TS.
d. Dummy Activities (time:0) = EJ, GK, HK, IK, NP

Probability of Completing the Project:

a. OCT = 45 days
b. Due Date = 60 days
c. δ CP = 1.914854
d. z-score (45) = (61-61)/ 1.914854 = 0  P(45) = 0.50
e. z-score (60) = (60-61)/ 1.914854 = -0.522233  0.3015  30.15%

Answers to Discussion Questions:

1. The time length of the critical path is 61 days. The critical path determines the optimal
completion time of the project.

2. Critical Activities AB, BC, CD, DF, FJ, JK, KL, LO, OP, and PQ cannot be delayed.
Non-critical activities CE, FG, FH, FI, KM, and MN can be delayed up to 13 days, 7
days, 7.33 days, 8 days, 5.33 days, and 5.33 days, respectively. The delay of non-critical
activities will not affect the overall project.

3. There is a low probability of the project being completed within 60 days since the value
of z is negative and its corresponding percentage on the z table at .02 is 30.15%.

Recommendation

If the Haygood Brothers Construction Company would want to meet the deadline on
September 30, they need to increase the resources on the critical activities namely Arrange
Financing (AB), Let Subcontracts (BC), Set and Pour Foundations (CD), Framing (DF),
Ductwork and Insulation (FJ), Sheetrock, paneling, paper hanging (JK), Installation of Cabinets
(KL), Inside Trim (LO), Painting (OP), and Flooring (PQ). They will also need to consider the
cost of adding resources to the critical activities. Since the difference is just one (1) day, they can
stick to the 61 days completion time.