Answer to Question #42463 in Economics of Enterprise for tesvalia
Associated Technologies Co. has been working on a new product, a laser oven, through its well-known division that already markets microwave ovens. Unfortunately the company has just learned that an overseas competitor is also developing a laser oven and plans to bring it to market in six months. If Associated Technologies is to capture a large share of the market first its product must be out within 81 days. Fortunately, Associated has been taking an integrated approach to new product development and most pieces are already in place. After considering every possible reduction in time the company came up with the following activities that have to be completed with their respective times and overtime costs. The company will gain additional profits of $10,000 per day if the product is marketed before 83 days.
Prepare a CPM/PERT chart and determine project duration based on normal project duration (using Normal Time)
Prepare a CPM/PERT chart and determine the shortest time this project can be completed taking (using Crash Time).
Use project crashing technique and calculate the net extra profit the company will make by completing the project in the minimum number of days rather that the normal number of days (remember to subtract the total crash cost from the extra profit to find the net extra profit).