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Toys City Inc.

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LGT 3105 Operation Management – Case Assignment 1 (Toys City Inc.)

1. I would have accommodated David Cheung’s vacation request.

It is because based on the Critical Path Method (CPM), the network diagram of the work of different audit areas comes as Figure 1, and we can find that the critical path which is the series of activities using the longest time to complete is Activity 1-2-5-7-10-13-15. It means that if there is any delay on Activity 1, 2, 5, 7, 10, 13, 15, the whole project would be delayed also. However, David is only responsible on the auditing of liquid assets which is Activity 4 which is not in the critical path. The vacation or delay made by David would not affect the progress of the whole project. Moreover, by calculating the early start/finish and late start/finish schedule, we find out the slack time which is the available delaying time of the activity without delaying the whole project (Late start time-Early start time= Late finish time-Early finish time). The slack time of Activity 4 is 125 hours (178-53 = 213-88) which means that the maximum time I would be comfortable giving David off is 125 hours. It is much greater that David’s requested vacation time which is 40 audit hours; therefore, I would allow his vacation request.

[pic]Figure 1

2. Before setting up the accelerating plan, we should know about the crash time and the crash cost. Crash time refers to the minimum time used to work on those activities which means that it is able to shorten their time of completion and the crash cost refers to the additional cost required to pay for speeding up the task. From Exhibit 5, the table suggests that there are 6 activities can have crash time and able to speed up by spending more money. They are Activity 5, 7, 9, 12, 13, 14. By using the formula [(crash cost-normal cost)/(normal time-crash

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