CASE: MOORE HOUSING CONTRACTORS

Moore Housing Contractors is negotiating a deal with Country Realtors to build six houses in a new development. Countryside wants Moore Contractors to start in late winter or early spring when the weather begins to moderate and build on through the summer into fall. The summer months are an especially busy time for the realty company, and it believes it can sell the houses almost as soon as they are ready, and sometimes even before. The houses all have similar floor plans and are of approximately equal si e! only the exteriors are noticeable different. The completion time is so critical for Countryside Realtors that they are insisting that a pro"ect management networ# accompany the contractor$s bid for the "ob with an estimate of the completion time for a house. The realtor also needs to be able to plan its offerings and mar#eting for the summer. They want each house to be completed within %& days after it is started. 'f a house is not completed within the time frame they want to be able to charge the contractor a penalty. Mary and (andy Moore, the president and vice)president, respectively, of Moore Contractors, are concerned about the prospects of a penalty charge. They want to be very confident that they can meet the deadline for a house before they enter into any #ind of agreement with a penalty involved. *'f there is a reasonable li#elihood that they cannot finish a house within a %& days they want to increase their bid to cover potential penalty charges.+ The Moores are experienced home builders, so it was difficult for them to list the activities involved in building a house or to estimate activity times. However, they made their estimates conservatively and tended to increase their pessimistic estimates to compensate for the possibility of bad weather and variations in their wor#force. ,ollowing is a list of the activities involved in building a house and the activity time estimates.

Act

Description

Predecesso

Time
1

-ivity a b c d e f g h i " # l m n o p q r s t u v w x

-xcavation, pour footers 0ay foundation ,rame and roof 0ay drain tiles (ewer *floor+ drain 'nstall insulation 3our basement floor Rough plumbing, pipes 'nstall windows Rough electrical wiring 'nstall furnace, air conditioner -xterior bric#wor# 'nstall plasterboard, mud, plaster Roof shingles, flashing 7ttach gutter, downspouts 8rading 0ay sub flooring 0ay driveway, wal#s, landscape ,inish carpentry 9itchen cabinetry, sin#, and appliances :athroom cabinetry, fixtures 3ainting *interior and exterior+ ,inish wood floors, lay carpet ,inal electrical, light fixtures

rs )))) a b b b c e e f f c, g i ", h, # l n d, o m p q q q " v, s v

. 1 1 2 2 1 1 1 2 2 . & / 1 2 1 . % . 1 1 % 1 2

m % . % 1 1 % . % . 1 & / 5 . 1 . % / & % . / & .

! / & & % . & & 4 % % 5 26 21 / & 4 / 26 21 5 / 26 5 %

DISCUSSION "UESTIONS: a. ;evelop a networ# for Moore Contractors and determine the probability that they can complete a house within %& days. ;oes it appear that the Moores might need to increase their bid to compensate for potential penalties< b. 'ndicate which pro"ect activities Moore Contractors should be particularly diligent to #eep on schedule by ma#ing sure wor#ers and materials are always available. 7lso indicate which activities they might shift wor#ers from as the need arises.