OPERATIONS MANAGEMENT CASE

STUDY

GROUP MEMBERS (G3)

ANNE SHARON GM04816
NURUL HAWA GM04797
NUR HIDAYUNI GM04744
MUZHAFFAR OMAR GM04790
YOKA LETCHUMY GM04767
LOGO
THE PERT MUSTANG
PROJECT
PLANNING
Contents

1 INTRODUCTION AND CONCEPT

2 QUESTION 1

3 QUESTION 2

4 QUESTION 3

5 QUESTION 4
INTRODUCTION
 NEW VENTURE

 Vikky Roberts owner of RASAS has a soft spot for

high performance mustang cars
 Recently she acquired one which needs a lot of
restoration
 She is also aware that there is a growing demand
for these vintage cars
 She needs help in assessing the feasibility of this
business
 REASONS??

 The public want the thrill of restoring an old

car

 But they do not own time to run down all the

old parts

 Others just want to own a vintage car for its

uniqueness

 Many are rich enough to pay someone else to

restore an auto for them
 MEETING THE DEMAND OF BOTH
GROUPS

Approach

1. Assemble a library
1. Serving as a part
of parts and body
brokers for NOS
manuals for old cars
for customization
2. Machine new parts to
purposes
replicate those which
are rare
2. Offers help in
compiling part list
3. Take charge of the
and RASAS could
entire if restoration
acquire the parts for
them
 BASIC RESTORATION

Gets the car looking great and running

Various
categories
MINT RESTORATION of
1. Puts the car back in original condition Restoration
2. Commands a higher price when resold
3. Can be customized
4. Accept any kind of restoration a
customer want
 WHAT NEEDS TO BE DONE??

 Requested the service operations director to

observe her mustang
 Decide the suitable approach to restore it into a
brand new car
 The due date is before the exhibition at the
Detroit Auto Show
 A report must be prepared to determine a few
aspects
 Restoration steps

Competitive priorities
CONTENT
OF
THE Aspects of proposed business

REPORT
Project Duration and Budget

Productivity cost
LEARNING ISSUES
AND
CONCEPT
 PROJECT MANAGEMENT
Work Network
breakdown planning (PERT
schedule or CPM)

Schedule of
project activities

Develop a risk
Analyze cost
management
time trade off
plan
 Steps in PERT

Establish the relationship among activities

(PRECEDENCE DIAGRAM)

Assign cost and time estimates

for each activities

Identify critical paths and

slack activities

Use the network plan to monitor and

control the project
 QUESTION
1
Competitive priorities of the
new proposed business
 RASAS’ knowledge and experience in
automobile industry is an advantage for it to
construct the new business- restoring vintage
automobile.
 However, considering the competitive
priorities can ensure a better performance of
the business.
 Competitive Priorities
COST

 Diversifying the business will lead to a higher cost.

Minimize the Costs

Production system
operates efficiently Acquire the parts at
existing auto parts
Controlling the product stores.
cost

www.themegallery.com
Competitive Priorities

QUALITY

Value for price paid is a definition of

quality that consumers often use for
product or service usefulness.

Error-free products and services-

decreasing trend in rejections, reworks,
customer complaints.

Customer relation improvement

www.themegallery.com
 Competitive Priorities
Flexibility
restore
Accept the
any
Restoring oldkind
car
vintage
for customer
automobile who
does fit the
of
are
restoration
really
demand of keen on
current a
customer
market
vintage wants
cars.

www.themegallery.com
Competitive Priorities Customer services

provide good services to attract the

target customers .

Focus on the delivery time of the cars

Has sufficient spare parts in store.

Consult customers - designing their

vintage car.

Provide the after-sale service to gain market share

www.themegallery.com
QUESTION
2
Construct a table containing the
project activities using the letter
assigned to each activity, the time
estimates and the precedence
relationship.
 TABLE OF PROJECT ACTIVITIES
Activity Detail Predecessor Time

A Order all needed material and parts (upholstery, - 2

windshield, carburetor, and oil pump)

B Receive upholstery material for seat covers. A 30

Cannot be done until order is placed

C Receive windshield. Cannot be done until order is A 10

placed

D Receive carburetor and oil pump. Cannot be done A 7

until order is placed

E Remove chrome from body. Can be done - 1

immediately

F Remove body(doors, hood, trunk, and fenders) E 1

from frame. Cannot be done until chrome is
removed

G Have fenders repaired by body shop. Cannot be F 4

done until body is removed from frame
Activity Detail Predecessor Time

H Repair doors, trunk, and hood. Cannot be done until F 6

body is removed from frame
I Pull engine from chassis. Do after body is removed F 1
from frame
J Remove rust from frame. Do after the engine has I 3
been pulled from the chassis
K Regrind engine valves. Do after the engine has been I 5
pulled from the chassis
L Replace carburetor and oil pump. Do after engine I,D 1
has been pulled from chassis and after carburetor
and oil pump have been received

M Rechrome the chrome parts. Chrome must have E 3

been removed from the body first
N Reinstall engine. Do after valves are reground and K,L 1
carburetor and oil pump have been installed
O Put doors, hood, and trunk back on frame. The H,J 1
doors, hood, and trunk must have been repaired
first. The frame must have had its rust removed first
Activity Detail Predecessor Time

P Rebuild transmission and replace brakes. Do so N,O 4

after the engine has been installed and the doors,
hood, and trunk are back on the frame

Q Replace windshield. Windshield must have been C 1

received
R Put fenders back on. Fenders must have been G,P 1
repaired first the transmission rebuilt, and the
brakes replaced

S Paint car. Cannot be done until the fenders are R,Q 4

back on and windshield replaced
T Reupholster interior of car. Must have received B,S 7
upholstery material first. Car must have been
painted first

U Put chrome parts back on. Car must have been S,M 1
painted and chrome parts rechromed first
V Put car to the Detroit Auto Show. Must have T,U 2
completed reupholstery of interior and have put
the chrome parts back on
 QUESTION
3
Draw a network diagram of the project
similar to figure 2.4.Determine the
activities on the critical path and the
estimated slack for each activity
 S= 0 S= 0 S= 0
A 0 2 B 2 32 T 32 39
2 0 2 30 2 32 7 32 39

S S=15 S=15 S=15 S= 0

C 2 12 Q 12 13 S 13 17 V 39 41
T 10 17 27 1 27 28 4 28 32 2 39 41

A S=26 S=26 S=21 S=21

D 2 9 L 9 10 R 6 7 U 17 18
R 7 28 35 1 35 36 1 27 28 1 38 39

S=21 S=21 S=21

F
T E
1
0
21 22
1 F
1
1
22
2
23
G
4
2
23
6
27
I
S=34 N
M 1 4 S=28 S=26 S=26
3 35 38 H 2 8 N 10 11 P 11 15 I
6 30

S=27
36

S=30
1 36

S=28
37 4 37 41
S
I 2 3 J 3 6 O 8 9 H
1 29 31 3 33 36 1 36 37

S=28
K 3 8
5 31 36 41
days
 $100 $2100 $2400
A 0 2 B 2 32 T 32 39
2 0 2 30 2 32 7 32 39

S $800 $100 $1700 $1000

C 2 12 Q 12 13 S 13 17 V 39 41
T 10 17 27 1 27 28 4 28 32 2 39 41

A $1750 $200 $100 $100

D 2 9 L 9 10 R 6 7 U 17 18
R 7 28 35 1 35 36 1 27 28 1 38 39

$200 $300 $1000

F
T E
1
0
21 22
1 F
1
1
22
2
23
G
4
2
23
6
27
I
$210 N
M 1 4 $1500 $200 $2000
3 35 38 H 2 8 N 10 11 P 11 15 I
6 30

$200
36

$900
1 36

$240
37 4 37 41
S
I 2 3 J 3 6 O 8 9 H
1 29 31 3 33 36 1 36 37

$1000
K 3 8
5 31 36
  Critical path
A – B – T – V = 41 days
 QUESTION
4
Prepare a project budget showing the cost
of each activity and the total for the
project.
Can the project be completed within the
budget?
ACTIVITIES COST ($)
A 100
B 2100
C 800
D 1750
E 200
F 300
G 1000
H 1500
I 200
J 900
K 1000
L 200
 M 210
N 200
O 240
P 20 00
Q 100
R 100
S 1 700
T 2 400
U 100
V 1 000
TOTAL COST 18 100
 Total project cost
= $ 50 000 + $ 18 100
= $ 68 100

 The project cost is within $ 70 000, thus it can

be completed within the budget.
Will the project require more than $3600 in
any week? If problems exist, how might Roberts
overcome them?

Assumptions
*Activities B,C and D must be paid for when the item is
received
*The costs of all activities that spam more than one week
can be prorated
*Each week contains five work days
 GANTT CHART
F:\gantt chart mustang.doc

 The activities cost from day 7 to day 12

 = $( 850 + 640 + 250 + 350 + 650) = $ 2 740
<$3,600
 However,
The activities cost from day 3 to day 7
= $( 1170 + 1470 + 1400 + 850 )= $ 6 290
>$3,600
How to overcome the problem?
Robert can start some activities later since
some activities have slack time;
such as slack for activity k = 14 days
 CONCLUSION

CPM/ PERT are very handy when it comes to

project planning because :

 Assist managers to plan and manage resources

effectively
 Monitor schedules and cost

RASAS will be able to complete the project

before the display in Detroit within the
required timeline and budget
LOGO