This is significant since, if this occurs, crashing the fabrication would make no difference on the total project time. The trial assembly has a maximum crash reduction of 7. 4 days, which will not make up the deficit. The only decimal places kept on the simplified diagram above are the slack calculations for L (packing for inland transport) and O. (first overland transport. ). This was done to avoid confusion in the critical path examination. However, it is worth mentioning that the slack values for L and O are extremely small, being a matter of hours.
This is not particularly significant since the task times and variances for the transportation / mobilization and erection are both small, showing that this alteration to the critical path would have minimal effects on the overall project time.
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1. Monitor production and shipping of steel members and fasters, in order to adjust plant schedule and apply for additional time: The primary drivers of the total project time is the rolling and shipping of the steel members. However, as mentioned in the findings section, the variance in the delivery and shipping of fasteners may cause this to become critical if there are improvements in steel members' overall delivery time or delays in the fastener overall delivery time. Even though the contract has no control over these tasks, it is recommended the project manager follow the progress of these deliveries carefully. Early deliveries may mean that the plant must tool and jog earlier than projected with the benefit of reducing the liquidated damages.
In this case the plant schedule would have to be adjusted and an investigation done to see if the reduction in liquidated damages would justify crashing or delaying other current jobs. Late deliveries would give the plant additional time to prepare, and enable the reduction of overtime (and cost) on existing jobs. Additionally, time variations can be claimed from the employer based on the force majeure clause of the contract, as delays in shipping due to unforeseen circumstances are completely beyond the contractor's control.
From experience with Guysuco, variation claims are usually granted once they can be substantiated in writing by the manufacturer or shipping company, and are made well in advance. 2. Accept liquidated damage rather than crashing: The lowest crashing cost per day is K (trial assembly) at approximately eighty two thousand, five hundred dollars. This is more than double the cost per day of liquidated damages (approximately forty-one thousand dollars. ) Further, this daily rate is only applicable for a maximum reduction of seven point four days.
If more than this is required, the fabrication cost per day of crashing is approximately one hundred and twenty eight thousand dollars. As a result, it is recommended that no crashing be done, and that liquidated damages be accepted as the least expensive alternative of any case where the project will not be finished on time. To put this in perspective, as shown in the analysis, there is greater than fifty percent probability that the project will finish on time and greater than ninety-five percent probabilities than the liquidated damages will not exceed one million dollars.
3. Request additional time based on bid validity The original bid validity was one hundred and twenty days, meaning that the tender submitted was not valid past four months from the date of the tender. The initial award in September 2002 was within the validity period, but the subsequent delay and final contract signing in January 2003 was beyond. As per contract, a petition should be made stating that the delays in the final award caused supplier agreements to expire, which lost placements in raw materials manufacturer scheduling.
Resultantly, the orders were removed from the queue, causing delay times which pushed the estimated completion time beyond the contract completion requirement. Though this recommendation is unrelated to the analysis put forward here, it is nonetheless valid and would reduce any liquidated damages.
- Introduction to Management Science, Anderson, Sweeney, Williams, Tenth Edition 2003
- CAM 384: Introduction to Management Science, Jeffers, http://www. rice. edu /384Lecture 2002
- Guyana Sugar Corporation Corporate Web, http://www. guyscuo. com
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