Case Study: Thao Dien Villa Construction Project

Introduction:
Vietnam's construction industry is booming, especially in luxury residential areas like Thao Dien
in Ho Chi Minh City. Sunrise Construction Company has been awarded a contract to build a
luxury villa named "Thao Dien Villa." This high-profile project is crucial for the company’s
reputation, and the management team is keen on using project management techniques such as
PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method) to ensure
timely completion and cost control.
Project Details:
The following table lists the activities involved in the construction project, along with their time
estimates (in weeks):

Immediate Optimistic Time Most Likely Pessimistic Time

A - Land
- 1 2 3
Preparation

B - Foundation A 2 4 6

C - Structural
A 1 3 5
Framework

D - Roofing B 3 5 7

E - Exterior
C 2 4 6
Finishing

F - Interior
D, E 4 5 6
Finishing

Tasks:
1. Activity Time Estimation:
o Calculate the expected time (TE) and variance (σ²) for each activity.
o Summarize your results in a table.
2. Network Diagram Construction:
o Draw the network diagram for the project, showing all the activities and their
dependencies. This diagram should visually represent the sequence in which the
tasks must be completed.
3. Critical Path Determination:
 o Identify the critical path by performing a forward pass to determine the earliest
start (ES) and earliest finish (EF) times, and a backward pass to determine the
latest start (LS) and latest finish (LF) times.
o Calculate the slack for each activity and identify the activities on the critical path
(i.e., activities with zero slack).
4. Project Duration and Variance:
o Calculate the total project duration and the variance of the project completion
time based on the critical path activities.
o Determine the probability that the Thao Dien Villa project will be completed in
18 weeks using the normal distribution.
5. Project Crashing:
o Suppose the company wants to reduce the project duration by 2 weeks. The
following table provides the crash cost per week for each activity:

Activity Normal Time Crash Time Crash Cost per Week

A - Land Preparation 2 1 $1,000

B - Foundation 4 3 $2,000

C - Structural Framework 3 2 $1,500

D - Roofing 5 3 $3,000

E - Exterior Finishing 4 3 $1,200

F - Interior Finishing 5 4 $2,500

o Determine the least-cost way to reduce the project duration by 2 weeks. Indicate
which activities should be crashed and calculate the total additional cost.
Submission Guidelines:
 Calculations: Provide detailed steps for all calculations, including expected times,
variances, critical path analysis, and project crashing.
 Diagrams: Include a clear and accurate network diagram showing all activities and the
critical path.
 Discussion: Write a brief discussion on the implications of your findings, particularly
regarding the critical path and the decision to crash certain activities. Discuss how these
decisions could impact the overall project cost and timeline.
This case study is designed to apply project management techniques in the context of a luxury
villa construction project in Thao Dien, Ho Chi Minh City, Vietnam. The project reflects realistic
challenges that students might face in the Vietnamese construction industry, including the need
for careful planning, time management, and cost control.
Case Study: Ha Noi Business District Development Project with PERT/Cost Analysis
Introduction:
The Ha Noi Business District Development Project aims to establish a new commercial hub in
the western part of Ha Noi, Vietnam. This high-profile project involves constructing office
buildings, commercial spaces, green areas, and modern infrastructure. Due to its significance, the
project management team must ensure that the project is completed on time and within the
allocated budget. In addition to using PERT (Program Evaluation and Review Technique) and
CPM (Critical Path Method), the team will apply PERT/Cost analysis to monitor and control
project costs effectively.
Project Details:
The project consists of several key activities, each with specific time and cost estimates. The
following table lists the activities involved, along with their time estimates (in weeks) and
associated costs:

Most
Immediate Optimistic Pessimistic Estimated Cost
Activity Likely
Predecessors Time (a) Time (b) (VND million)
Time (m)

A - Land Acquisition
- 4 6 8 2,000
and Permits

B - Infrastructure
A 6 8 12 4,500
Development

C - Office Building
B 8 12 16 10,000
Construction

D - Commercial
B 5 7 10 6,000
Space Development

E - Landscaping and
C, D 4 6 8 2,500
Green Areas

F - Utility
Installation
B 3 4 5 1,800
(Electricity, Water,
etc.)

G - Final Inspections
E, F 2 3 5 1,200
and Approval

Tasks:
1. Activity Time and Cost Estimation:
 o Calculate the expected time (TE) and variance (σ²) for each activity.
o Summarize the expected times, variances, and costs in a table.
2. Network Diagram Construction:
o Draw the network diagram for the project, showing all the activities, their
dependencies, and associated costs.
3. Critical Path and Cost Determination:
o Identify the critical path by performing a forward pass to determine the earliest
start (ES) and earliest finish (EF) times, and a backward pass to determine the
latest start (LS) and latest finish (LF) times.
o Calculate the slack for each activity and identify which activities are on the
critical path (i.e., activities with zero slack).
o Determine the total cost of the project based on the activities on the critical path.
4. PERT/Cost Analysis:
o Assume the following cost distribution for each activity: labor costs (40%),
material costs (30%), and overhead costs (30%).
o Break down the estimated cost for each activity into these three categories.
o Calculate the cumulative cost at each node in the network diagram.
o Identify the points where the project is most likely to exceed the budget and
propose cost control measures.
5. Project Cost Monitoring and Control:
o Develop a plan to monitor the costs throughout the project using the PERT/Cost
approach.
o Discuss how the project team can use PERT/Cost to adjust resource allocation,
schedule activities more efficiently, and ensure the project stays within budget.
6. Project Crashing and Cost Impact:
o If the project needs to be completed 3 weeks earlier, determine the additional
costs associated with crashing specific activities.
o Calculate the impact on the overall project budget and propose strategies to
manage these additional costs.
Submission Guidelines:
 Calculations: Provide detailed steps for all calculations, including expected times,
variances, critical path analysis, PERT/Cost breakdown, and project crashing costs.
  Diagrams: Include a clear and accurate network diagram showing all activities, costs,
and the critical path.
 Discussion: Write a brief discussion on the implications of your findings, particularly
regarding cost management and the impact of project crashing on the budget. Discuss the
role of PERT/Cost in ensuring project success in terms of both time and budget.

This case study integrates PERT/Cost analysis into the project management process for the Ha
Noi Business District Development Project. It challenges students to apply advanced project
management techniques to monitor, control, and optimize both time and cost aspects of a large-
scale urban development project in Vietnam.