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GADGET TOY COMPANY

Joe Huffman, a project manager at Gadget Toy Company has just submitted a proposal for
funding to the new product review committee. He recommended that Gadget introduce, through
its retail distribution network, a new children toy based on a popular cartoon character. Joe felt
that if he could get the toy out by Christmas, Gadget could take advantage of what he felt a
strong market demand. However due to volatility of market for these types of games, Joe could
not be certain that the product would have the same level of market acceptance the following
year.

It was now May 6, 1996 and Joe knew that he would have to manage the timing of the project
carefully, to meet the delivery date of September 15th, just 19 weeks away. Gadgets head office
was in Kitchner, Ontario where it also operated a manufacturing plant and a distribution center.
Whenever possible, Gadget preferred to manufacture its products in-house.

Joe expected feedback from the committee by the end of this week, at which time he could begin
coordinating the launch of the project. Since Joe was an experienced project manager, he
established a preliminary list of activities as shown in the table below:

Activity Description Predecessor Time (in weeks)

A Obtaining funding approval - 1


B Finalize Engineering design A 1
C Deliver new equipment A 8
D Build Dies/Tools B 12
E Install Equipment C 1
F Train workers D, E 1
G Debug process F 1
H Establish advertising plan A 1
I Finalize package and art work H 2
J Advertise H 12
K Raw material delivery D, I 2
L Initial production run G, K 3
M Ship product J, L 1
Based on this schedule, Joe felt that he could start work on some activities immediately, such as
finalizing product design and placing order for equipment. However many activities have to be
performed sequentially, For example he could not train the workers until the equipment was
installed, and the tools for the machines were completed. Similarly he could not order the raw
material until the engineering work and advertising plan was completed. Since the advertising
plan would influence color selection.

Concerned about the delivery schedule, Joe investigated opportunities to cut down project time.
After talking with the marketing manager Ms. Pilon, he learned that he could reduce product
advertising. Pilon anticipated a 5% reduction in sales for each week of lost advertising. She also
indicated that a minimum of six weeks of advertising was essential for a new product of this
nature.

Joe also talked with Mr. Steve, the production manager at the tool shop. Steve offered to speed
up the tool building by working over the weekends for an additional cost of $5,000. Steve
thought that he could improve the delivery time by two weeks, if Joe authorized the extra cost.

CASE STUDY QUESTIONS:

a) Based on the activity chart as above, perform a critical path analysis of this project by
making a network diagram, and find out the expected completion time of this project.

b) If it is given that the variance of the longer critical path is 16.33 weeks, what is the
probability that Joe will be able to meet the delivery schedule on or before the
anticipated time of 19 weeks?