Acct2522 management accounting 1 session 1, 2016

1THE UNIVERSITY OF NEW SOUTH WALESSCHOOL OF ACCOUNTINGACCT2522 Management Accounting 1Session 1, 2016Tutorial Week 12 – Project Planning and AnalysisTutorial Questions (must be prepared prior to the tutorial)
Question 1: Advantager UniversityThis question can be found on the following pages.A 4 (5)B 4 (7)A 2 (3) C 4 (3)D 6 (4) 3Question 1: Advantager UniversityAdvantager University is a top ranked university that has experienced huge and growing demandfrom potential students for several years. To cope with this increased demand, several managershave been hired by the university to facilitate expansion projects. The School of Accounting is justone of the successful schools at Advantager that urgently needs to expand. To better servestudents and staff, the University administration has provided the School with a choice of severalunder‐utilised buildings on campus that would meet the School’s expansion needs. After several committee meetings, eight major expansion project activities have been identified,and the University has agreed to provide project managers to support these activities. Theproject needs to be completed in 16 weeks at latest, in time for the next Semester. Peopleinvolved in the expansion were interviewed to gather information for the following table:Table 1:Activity ImmediatelyprecedingactivitiesNumber ofManagersrequired*Activity Description Time Estimates (weeks)Optimistic Likely PessimisticA ‐ 4 Select building 1 2 3B ‐ 2 Interview staff applicants 1 2 9C A 3 Develop remodelling plans 1 2 3D B 2 Select staff applicants 2 4 6E C 3 Remodel 1 3 11F C 3 New staff training 1 3 5G D, E 2 Install facilities 2 5 8H F, G 3 Move in 1 2 3* Managers are qualified to work on all activities relating to the University’s expansion projects,and can be interchanged between activities and projects. Required:1. Draw a detailed network diagram for the project (there is a skeleton diagram on the nextpage to get you started if you’re really stuck, but it would be better if you tried to work thisout on your own first). 12. What is the critical path? What does it tell you, and why is it important? 3. (a) Which activities have slack? (b) Using your answer to (a), explain the concept of shared slack, and where it does/does notexist for this project. 4. (a) Advantager University has hired several managers to facilitate its expansion plans. Usingthe data in Table 1, show in Gantt chart format (weeks on the horizontal axis and number of1 Please note, when you draw up the last activity in your network diagram, you should set your late finish time to equalyour early finish time. So even though the project needs to be completed in 16 weeks, please don’t set 16 to be yourlate finish time, unless 16 also happens to be your early finish time. When drawing up these diagrams you shouldassume we don’t want a project to take any longer than it has to – remember, on the critical path there is no slack!Activities examined in isolation may have slack, but the critical path should not. 4managers on the vertical axis), the resource loading for this project week by week, assumingthat each activity starts as soon as possible.(b) Show in Gantt chart format how you would use resource levelling to achieve a reductionin variability in management requirements without increasing project duration.(c) Explain how your answer to (b) can help Advantager University, given that it is undergoingseveral expansion projects simultaneously.5. Calculate the path variance of ACFH. What is the value in calculating path variances?6. A world‐renowned Nobel Prize winning accounting academic will be visiting the university in12 weeks. If the project can be completed in 12 weeks, she will be able to give a speech at theopening ceremony for the building, attracting valuable news coverage of the event. (a) Using the additional information in Table 2 below, ascertain the smallest total additional costincurred for finishing the entire project in 12 weeks.(b) What factors would you consider in deciding whether to crash the project?Table 2:Activity Normal time(weeks)Normal cost$Crash time(weeks)Crash cost$A 2 100,000 2 ‐ B 3 30,000 2 40,000C 2 250,000 1 310,000D 4 30,000 3 35,000E 4 1,200,000 2 1,800,000F 3 60,000 3 ‐ G 5 800,000 3 1,100,000H 2 350,000 1 600,000HintThis can help you get started on Question 1, if you’re really stuck …..5127463 5Self Study Questions (complete in your own time)1. Stevenson, Ch 17, Problems 1- 5 on pp. 765-771. Worked solutions are provided in the text.Problem 1: Practice with AOA diagramsProblem 2: Practice with early and late start and finishes, slack time.Problem 3 & 4: Practice with PERT calculationsProblem 5 part (a) only: Practice with project crashing2. Consider the following CPM/PERT diagram. Among other resources, each activity (A,B, C and D) requires a certain number of skilled supervisors to oversee the work. Thenumber of weeks to complete each activity is shown, along with the number of skilledsupervisors needed, in brackets.a. Show in Gantt chart format (weeks on the horizontal axis and number of supervisors on thevertical axis), the resource loading week by week, assuming that each activity starts as soonas possible.b. Your task is to reduce variability in supervisory requirements without increasing projectduration. Show in Gantt chart format how one should use resource levelling to achieve this.No. ofSupervisors1312A1110987B654D 32 C1Weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14A 4 (5)B 4 (7)A 2 (3) C 4 (3)D 6 (4) 62.No. ofSupervisors1312111098A7B654D 32 C1Weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14

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