INTERCAT CASE

Project and Portfolio Management Assignment #01

OCTOBER 18, 2014

KARTHIK ARUMUGHAM [1311299]

IIM BANGALORE

Project and Portfolio Management Assignment #01

a) Draw the project network for completing the initial public offering of InterCat stock. How long is the initial
public offering process? What are the critical steps in the process?
Project network:

Duration: 137.5 days or 27.5 weeks

Critical Path: A-B-D-E-F-J-K-L-O-P

Karthik Arumugham [1311299]

Project and Portfolio Management Assignment #01

b) How would the change in the following activities affect the time to complete the initial public offering? Please
evaluate each change independently.
a. Some members of the syndicate are playing hardball. Therefore, the time it takes to negotiate the
commitment of each member of the syndicate increases from 2-3 weeks.
The negotiate the commitment of each member of the syndicate task has a start slack of 1 week. Hence
increasing the duration of this task from 2-3 weeks will not impact the overall duration of the project. But it
now introduces a new alternate critical path.
Critical Path 1 : A-B-D-E-F-J-K-L-O-P
Critical Path 2 : A-B-C-E-F-J-K-L-O-P

b. The underwriters are truly math geniuses. Therefore, the time it takes to calculate the issue price
decreases to 4 weeks.
The calculate the issue price task has a start slack of 2.5 weeks. Hence decreasing the duration of this task
from 5-4 weeks will not impact the overall duration of the project. But it increases the slack to 3.5 weeks.
Critical path remains the same.
Critical Path: A-B-D-E-F-J-K-L-O-P

Karthik Arumugham [1311299]

Project and Portfolio Management Assignment #01

c. Whoa! The SEC found many deficiencies in the initial registration statement. The underwriters must
therefore spend 2.5 weeks amending the statement and resubmitting it to the SEC.
The amending the statement and resubmitting it to the SEC task has a start slack of 0 weeks and is a
critical task. Hence increasing the duration of this task from 1-2.5 weeks will impact the overall duration of
the project by 1.5 weeks increase to 29 weeks. Critical path remains the same.
Critical Path: A-B-D-E-F-J-K-L-O-P

d. The new issue does not comply with the blue sky laws of a handful states. The time it takes to edit the
issue for each state to ensure compliance increases to 4 weeks.
The Confirm that the new issue complies with the 'blue sky' laws task has a start slack of 2.5 weeks. Hence
increasing the duration of this task from 1-4 weeks will impact the overall duration of the project by 0.5
weeks increase to 28 weeks. This introduces two new critical paths
Critical path 1: A-B-D-E-F-G-M-P
Critical path 2: A-B-D-E-F-J-K-L-M-P

Karthik Arumugham [1311299]

Project and Portfolio Management Assignment #01

c) How can Intercat meet the new deadline of 22 weeks set by Janet and Gilbert at minimum cost?
Solved using Linear Programming in Excel 2013 Solver Add-in:

Janet and Gilbert must reduce the time for the following tasks to finish the project within 24 weeks at a minimum cost of
$260,800,
Task A by 1.5 weeks,
Task B by 1 week,
Task K by 0.5 week
Task N by 1.5 weeks
Task O by 2 weeks and
Task P by 0.5 week
Karthik Arumugham [1311299]

Project and Portfolio Management Assignment #01

d) How can Intercat meet the new deadline of 24 weeks set by Janet and Gilbert at minimum cost?

Janet and Gilbert must reduce the time for the following tasks to finish the project within 24 weeks at a minimum cost of
$236,000,
Task A by 1.5 weeks,
Task B by 1 week,
Task K by 0.5 week and
Task O by 0.5 week

Karthik Arumugham [1311299]