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MB0048 : Compare and contrast CPM and PERT. Under what conditions would you recommend scheduling by PERT? Justify your answer with reasons.

Posted on: October 20, 2011

MB0048 : Compare and contrast CPM and PERT. Under what conditions would you recommend scheduling by PERT? Justify your answer with reasons.

Answer :- Project management has evolved as a new field with the development of two analytic techniques for planning, scheduling and controlling projects. These are the Critical Path Method (CPM) and the Project Evaluation and Review Technique (PERT). PERT and CPM are basically time-oriented methods in the sense that they both lead to the determination of a time schedule.

Basic Difference between PERT and CPM

Though there are no essential differences between PERT and CPM as both of them share in common the determination of a critical path. Both are based on the network representation of activities and their scheduling that determines the most critical activities to be controlled so as to meet the completion date of the project.

PERT

Some key points about PERT are as follows:

  • PERT was developed in connection with an R&D work. Therefore, it had to cope with the uncertainties that are associated with R&D activities. In PERT, the total project duration is regarded as a random variable. Therefore, associated probabilities are calculated so as to characterise it.
  • It is an event-oriented network because in the analysis of a network, emphasis is given on the important stages of completion of a task rather than the activities required to be performed to reach a particular event or task.
  • PERT is normally used for projects involving activities of non-repetitive nature in which time estimates are uncertain.
  • It helps in pinpointing critical areas in a project so that necessary adjustment can be made to meet the scheduled completion date of the project.

 

CPM

  • CPM was developed in connection with a construction project, which consisted of routine tasks whose resource requirements and duration were known with certainty. Therefore, it is basically deterministic.
  • CPM is suitable for establishing a trade-off for optimum balancing between schedule time and cost of the project.
  • CPM is used for projects involving activities of repetitive nature.

PROJECT SCHEDULING BY PERT-CPM

It consists of three basic phases: planning, scheduling and controlling.

Phases of PERT-CPM

1. Project Planning: In the project planning phase, you need to perform the following activities:

  • Identify various tasks or work elements to be performed in the project.
  • Determine requirement of resources, such as men, materials, and machines, for carrying out activities listed above.
  • Estimate costs and time for various activities.
  • Specify the inter-relationship among various activities.
  • Develop a network diagram showing the sequential inter-relationships between the various activities.

2. Project Scheduling: Once the planning phase is over, scheduling of the project is when each of the activities required to be performed, is taken up. The various steps involved during this phase are listed below:

  • Estimate the durations of activities. Take into account the resources required for these execution in the most economic manner.
  • Based on the above time estimates, prepare a time chart showing the start and finish times for each activity. Use the time chart for the following exercises.

ü  To calculate the total project duration by applying network analysis techniques, such as forward (backward) pass and floats calculation

ü  To identify the critical path

ü  To carry out resource smoothing (or levelling) exercises for critical or scarce resources including re-costing of the schedule taking into account resource constraints

3. Project Control: Project control refers to comparing the actual progress against the estimated schedule. If significant differences are observed then you need to re-schedule the project to update or revise the uncompleted part of the project.

 

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12 Responses to "MB0048 : Compare and contrast CPM and PERT. Under what conditions would you recommend scheduling by PERT? Justify your answer with reasons."

Hi Nikaht, Thanks a lot, you were so helpful….you know I’m lil greedy, can you please help me with assignments for:
MB0038
MB0039
MB0040
MB0041
MB0042
MB0043

Thanks a ton,
Sathish

Dear……

Please send me the solutions for Assignments for MB0045 & MB0048 (Sem-II).Winter / November 2011

Thanks & regards,

Mamta

Thanks nikaht for updating the answers can u please provide the answer 6 for operation research which is Transportation problem of assignment 1 MB0048

Thanks nikaht for updating the answers can u please provide the answer 6 for operation research which is Transportation problem of assignment 1 MB0048. A million thanks
Regards,
Shailaja

Hi Shailaja,

I have uploaded all the answers of set- 1 and set -2. Just browse through my blog.
If you didnt find your answer, give me your complete question, I will try my best to help you.

Regards,
Nikhat

Dear Nikhat

Pls Help me for my Assignment i want MB0045 and MB0048 Answers

The Question is given below

MB0045 only Question Number 5 and 6 in SET 1 and 2

Winter / November 2011
Master of Business Administration
Semester II
MB0045 – Financial Management – 4 Credits
(Book ID: B1134)
Assignment
Set- 1 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Explain the steps involved in Financial Planning
Q2. A company is considering a capital project with the following information:
The cost of the project is Rs.200 million, which consists of Rs. 150 million in plant a
machinery and Rs.50 million on net working capital. The entire outlay will be incurred
in the beginning. The life of the project is expected to be 5 years. At the end of 5 years,
the fixed assets will fetch a net salvage value of Rs. 48 million ad the net working capital
will be liquidated at par. The project will increase revenues of the firm by Rs. 250
million per year. The increase in costs will be Rs.100 million per year. The depreciation
rate applicable will be 25% as per written down value method. The tax rate is 30%. If
the cost of capital is 10% what is the net present value of the project.
Q3. Discuss the relevance and factors that influence the determination of stock level.
Q4. There was a replacement of its existing machine by a new machine. The new
machine will cost Rs 2,00,000 and have a life of five years. The new machine will yield
annual cash revenue of Rs 2,50,000 and incur annual cash expenses of Rs 1,30,000. The
estimated salvage of the new machine at the end of its economic life is Rs 8,000. The
existing machine has a book value of Rs 40,000 and can be sold for Rs 20,000. The
existing machine, if used for the next five years is expected to generate annual cash
revenue of Rs 2,00,000 and to involve annual cash expenses of Rs 1,40,000. If sold after
five years, the salvage value of the existing machine will be negligible.
The company pays tax at 40%. It writes off depreciation at 30% on the written down
value. The company’s cost of capital is 20%
Compute the incremental cash flows of replacement decisions.
Winter / November 2011
Hint : unit 8 solved problem
Q5. Explicit cost and Implicit cost are the two dimensions of cost. What role does cost
play in financial decisions
Q6. The following details have been extracted from the books of Ashraya Ltd
Income Statement (Rs. In millions)
2009 2010
Sales less returns 1200 1000
Gross Profit 300 520
Selling Expenses 100 120
Administration 40 45
Deprecation 60 75
Operating Profit 100 280
Non operating income 20 40
EBIT (Earnings before interest & Tax 120 320
Interest 15 18
Profit before tax 105 302
Tax 30 100
Profit after tax 75 202
Dividend 38 100
Retained earnings 37 102
Hint: unit 2 worked example
Winter / November 2011
Master of Business Administration
Semester II
MB0045 – Financial Management – 4 Credits
(Book ID: B1134)
Assignment
Set- 2 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Examine the importance of capital budgeting
Q2 Considering the following information, what is the price of the share as per Gordon’s
Model?
Net sales Rs. 120 lakhs
Net profit margin 12.5%
Outstanding preference shares Rs. 50 lakhs @ 12% dividend
No. of equity shares 250000
Cost of equity shares 12%
Retention ratio 40%
ROI 16%
Hint: Apply the Gordon formula
Q3. Internal capital rationing is uses by firms for exercising financial control” How does
a firm achieve this ?
Q4. A company has two mutually exclusive projects under consideration viz project A &
project B.
Each project requires an initial cash outlay of Rs. 3,00,000 and has an effective life of 10
years. The company’s cost of capital is 12%. The following fore cast of cash flows are
made by the management.
Winter / November 2011
Economic Project A Project B
Environment Annual cash
inflows
Annual cash in flows
Pessimistic 65,000 25,000
Expected 75,000 75,000
Optimistic 90,000 1,00,000
What is the NPV of the project?
Which project should the management consider?
Given PVIFA = 5.650 Unit 9 worked example
Q5. Explain various types of bonds.
Q6. Given the following information, what will be the price per share using the Walter model.
Earnings per share Rs. 40
Rate of return on investments 18%
Rate of return required by shareholders 12%
Payout ratio being 40%, 50%, or 60%.

And MB0048 Only Few Questions

5. Use Two-Phase simplex method to solve: [10 Marks]
Minimize z= + +
Subject to constraints: – + =5
– ≤ 3
+ ≥ 4
≥ 0, ≥ 0 and is unrestricted.
November / Winter 2011
6. Use Branch and Bound method to solve the following L.P.P: [10 Marks]
Maximize z= 7 + 9
Subject to constraints: – + 3 ≤6
7 + ≤ 35
≤ 7
, ≥ 0 and are integers.

5. Consider the following transportation problem:
Godowns
Factory 1 2 3 4 5 6 Stock
available
A 7 5 7 7 5 3 60
B 9 11 6 11 – 5 20
C 11 10 6 2 2 8 90
D 9 10 9 6 9 12 50
Demand 60 20 40 20 40 40
It is not possible to transport any quantity from factory B to Godown 5.
Determine:
(a) Initial solution by Vogel’s approximation method.
(b) Optimum basic feasible solution.
6. A machine operator processes five types of items on his machine each week, and
must choose a sequence for them. The set-up cost per change depends on the item
presently on the machine and the set-up to be made according to the following table:
From Item To item
A B C D E
A ∞ 4 7 3 4
B 4 ∞ 6 3 4
C 7 6 ∞ 7 5
D 3 3 7 ∞ 7
E 4 4 5 7 ∞
If he processes each type of item once and only once each week, how should he
sequence the items on his machine in order to minimize the total set-up cost?
(Hint: A-> E -> C-> B-> D-> A Cost: 20)

Dear Nikhat

Pls Help me for my Assignment i want MB0045 and MB0048 Answers

The Question is given below

MB0048 only Question Number 5 and 6 in SET 1 and 2

Winter / November 2011
Master of Business Administration
Semester II
MB0045 – Financial Management – 4 Credits
(Book ID: B1134)
Assignment
Set- 1 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Explain the steps involved in Financial Planning
Q2. A company is considering a capital project with the following information:
The cost of the project is Rs.200 million, which consists of Rs. 150 million in plant a
machinery and Rs.50 million on net working capital. The entire outlay will be incurred
in the beginning. The life of the project is expected to be 5 years. At the end of 5 years,
the fixed assets will fetch a net salvage value of Rs. 48 million ad the net working capital
will be liquidated at par. The project will increase revenues of the firm by Rs. 250
million per year. The increase in costs will be Rs.100 million per year. The depreciation
rate applicable will be 25% as per written down value method. The tax rate is 30%. If
the cost of capital is 10% what is the net present value of the project.
Q3. Discuss the relevance and factors that influence the determination of stock level.
Q4. There was a replacement of its existing machine by a new machine. The new
machine will cost Rs 2,00,000 and have a life of five years. The new machine will yield
annual cash revenue of Rs 2,50,000 and incur annual cash expenses of Rs 1,30,000. The
estimated salvage of the new machine at the end of its economic life is Rs 8,000. The
existing machine has a book value of Rs 40,000 and can be sold for Rs 20,000. The
existing machine, if used for the next five years is expected to generate annual cash
revenue of Rs 2,00,000 and to involve annual cash expenses of Rs 1,40,000. If sold after
five years, the salvage value of the existing machine will be negligible.
The company pays tax at 40%. It writes off depreciation at 30% on the written down
value. The company’s cost of capital is 20%
Compute the incremental cash flows of replacement decisions.
Winter / November 2011
Hint : unit 8 solved problem
Q5. Explicit cost and Implicit cost are the two dimensions of cost. What role does cost
play in financial decisions
Q6. The following details have been extracted from the books of Ashraya Ltd
Income Statement (Rs. In millions)
2009 2010
Sales less returns 1200 1000
Gross Profit 300 520
Selling Expenses 100 120
Administration 40 45
Deprecation 60 75
Operating Profit 100 280
Non operating income 20 40
EBIT (Earnings before interest & Tax 120 320
Interest 15 18
Profit before tax 105 302
Tax 30 100
Profit after tax 75 202
Dividend 38 100
Retained earnings 37 102
Hint: unit 2 worked example
Winter / November 2011
Master of Business Administration
Semester II
MB0045 – Financial Management – 4 Credits
(Book ID: B1134)
Assignment
Set- 2 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Examine the importance of capital budgeting
Q2 Considering the following information, what is the price of the share as per Gordon’s
Model?
Net sales Rs. 120 lakhs
Net profit margin 12.5%
Outstanding preference shares Rs. 50 lakhs @ 12% dividend
No. of equity shares 250000
Cost of equity shares 12%
Retention ratio 40%
ROI 16%
Hint: Apply the Gordon formula
Q3. Internal capital rationing is uses by firms for exercising financial control” How does
a firm achieve this ?
Q4. A company has two mutually exclusive projects under consideration viz project A &
project B.
Each project requires an initial cash outlay of Rs. 3,00,000 and has an effective life of 10
years. The company’s cost of capital is 12%. The following fore cast of cash flows are
made by the management.
Winter / November 2011
Economic Project A Project B
Environment Annual cash
inflows
Annual cash in flows
Pessimistic 65,000 25,000
Expected 75,000 75,000
Optimistic 90,000 1,00,000
What is the NPV of the project?
Which project should the management consider?
Given PVIFA = 5.650 Unit 9 worked example
Q5. Explain various types of bonds.
Q6. Given the following information, what will be the price per share using the Walter model.
Earnings per share Rs. 40
Rate of return on investments 18%
Rate of return required by shareholders 12%
Payout ratio being 40%, 50%, or 60%.

And MB0048 Only Few Questions

5. Use Two-Phase simplex method to solve: [10 Marks]
Minimize z= + +
Subject to constraints: – + =5
– ≤ 3
+ ≥ 4
≥ 0, ≥ 0 and is unrestricted.
November / Winter 2011
6. Use Branch and Bound method to solve the following L.P.P: [10 Marks]
Maximize z= 7 + 9
Subject to constraints: – + 3 ≤6
7 + ≤ 35
≤ 7
, ≥ 0 and are integers.

5. Consider the following transportation problem:
Godowns
Factory 1 2 3 4 5 6 Stock
available
A 7 5 7 7 5 3 60
B 9 11 6 11 – 5 20
C 11 10 6 2 2 8 90
D 9 10 9 6 9 12 50
Demand 60 20 40 20 40 40
It is not possible to transport any quantity from factory B to Godown 5.
Determine:
(a) Initial solution by Vogel’s approximation method.
(b) Optimum basic feasible solution.
6. A machine operator processes five types of items on his machine each week, and
must choose a sequence for them. The set-up cost per change depends on the item
presently on the machine and the set-up to be made according to the following table:
From Item To item
A B C D E
A ∞ 4 7 3 4
B 4 ∞ 6 3 4
C 7 6 ∞ 7 5
D 3 3 7 ∞ 7
E 4 4 5 7 ∞
If he processes each type of item once and only once each week, how should he
sequence the items on his machine in order to minimize the total set-up cost?
(Hint: A-> E -> C-> B-> D-> A Cost: 20)

Pls Help me for my Assignment i want MB0045 and MB0048 Answers
The Question is given below

Q4. There was a replacement of its existing machine by a new machine. The new
machine will cost Rs 2,00,000 and have a life of five years. The new machine will yield
annual cash revenue of Rs 2,50,000 and incur annual cash expenses of Rs 1,30,000. The
estimated salvage of the new machine at the end of its economic life is Rs 8,000. The
existing machine has a book value of Rs 40,000 and can be sold for Rs 20,000. The
existing machine, if used for the next five years is expected to generate annual cash
revenue of Rs 2,00,000 and to involve annual cash expenses of Rs 1,40,000. If sold after
five years, the salvage value of the existing machine will be negligible.
The company pays tax at 40%. It writes off depreciation at 30% on the written down
value. The company’s cost of capital is 20%
Compute the incremental cash flows of replacement decisions.

Q6. The following details have been extracted from the books of Ashraya Ltd
Income Statement (Rs. In millions)
2009 2010
Sales less returns 1200 1000
Gross Profit 300 520
Selling Expenses 100 120
Administration 40 45
Deprecation 60 75
Operating Profit 100 280
Non operating income 20 40
EBIT (Earnings before interest & Tax 120 320
Interest 15 18
Profit before tax 105 302
Tax 30 100
Profit after tax 75 202
Dividend 38 100
Retained earnings 37 102
Hint: unit 2 worked example

set 2
Q2 Considering the following information, what is the price of the share as per Gordon’s
Model?
Net sales Rs. 120 lakhs
Net profit margin 12.5%
Outstanding preference shares Rs. 50 lakhs @ 12% dividend
No. of equity shares 250000
Cost of equity shares 12%
Retention ratio 40%
ROI 16%
Hint: Apply the Gordon formula

And MB0048 Only Few Questions
5. Use Two-Phase simplex method to solve: [10 Marks]
Minimize z= + +
Subject to constraints: – + =5
– ≤ 3
+ ≥ 4
≥ 0, ≥ 0 and is unrestricted.
November / Winter 2011

6. Use Branch and Bound method to solve the following L.P.P: [10 Marks]
Maximize z= 7 + 9
Subject to constraints: – + 3 ≤6
7 + ≤ 35
≤ 7
, ≥ 0 and are integers.

set 2

5. Consider the following transportation problem:
Godowns
Factory 1 2 3 4 5 6 Stock
available
A 7 5 7 7 5 3 60
B 9 11 6 11 – 5 20
C 11 10 6 2 2 8 90
D 9 10 9 6 9 12 50
Demand 60 20 40 20 40 40
It is not possible to transport any quantity from factory B to Godown 5.
Determine:
(a) Initial solution by Vogel’s approximation method.
(b) Optimum basic feasible solution.
6. A machine operator processes five types of items on his machine each week, and
must choose a sequence for them. The set-up cost per change depends on the item
presently on the machine and the set-up to be made according to the following table:
From Item To item
A B C D E
A ∞ 4 7 3 4
B 4 ∞ 6 3 4
C 7 6 ∞ 7 5
D 3 3 7 ∞ 7
E 4 4 5 7 ∞
If he processes each type of item once and only once each week, how should he
sequence the items on his machine in order to minimize the total set-up cost?
(Hint: A-> E -> C-> B-> D-> A Cost: 20)

hi..

Plz send all the answers of mb0048 and mb0049 smu mba sem2 winter 2011 ….it will be a grt help

thank you

hi..

Plz send all the answers of mb0048 and mb0049 smu mba sem2 winter 2011 ….it will be a grt help

thank you

Dear……
Please send me the solutions for Assignments for MB0045 & MB0048 (Sem-II).Winter / November 2011
Thanks & regards,
Mahesh

can you help me to solve this?
Use Branch and Bound technique to solve the following problem
Maximise z = 3×1 + 3×2 + 13 x3
Subject to
– 3×1 + 6×2 + 7×3 ≤ 8
6×1 – 3×2 + 7×3 ≤ 8
0 ≤ xj ≤ 5
And xj are integer j = 1, 2, 3

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