Clinton Financial Consultants is a firm of chartered accountants and financial consultants. Amongst its many activities , it specializes in arranging finance for new entrepreneurs. It helps them in evaluation, preparing viable reports, documentation, legal documentation and finally obtaining a loan from banking or financial institutions. The task involves preparing a proposal, checking the background of the client firm for its creditworthiness, preparing pro forma balance sheets and profit and loss accounts for the term of the loan, carrying out a need analysis, preparing loan agreement documents and finally obtaining the loan for the client. To facilitate better management, the firm uses PERT. It is currently processing the proposed loan for Alfa enterprises. The team assigned for this project has identified the following activities: Activity Description Immediate Predecessor A Start preparing proposal as per template - B Check credit worthiness of firm - C Create a rough draft proposal A,B D Carry out need analysis with cost C E Estimate future cash outflows and inflows C F Prepare pro forma financial statements E G Prepare and obtain approval of legal documents C H Integrate all documents and produce proposal D,F,G I Identify potential sources of capital and select G,F J Check approve and print final legal proposal H K Sign agreement and transfer funds I,J Activity Time Optimistic Time Most Likely Time Pessimistic A 4 7 10 B 2 5 8 C 2 5 8 D 16 19 28 E 6 9 24 F 1 7 13 G 4 10 28 H 2 5 14 I 5 8 17 J 2 5 8 K 19 28 37 a. Calculate the expected time and variance for each activity. b. Construct a PERT network c. Find the critical path and expected duration to complete the project d. What is the variance and standard deviation of the project length e. If the company has a policy of setting up a project with 95% probability of achieving the plan, what time frame should the company set for this project?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Clinton Financial Consultants is a firm of chartered accountants and financial consultants. Amongst its many activities , it specializes in arranging finance for new entrepreneurs. It helps them in evaluation, preparing viable reports, documentation, legal documentation and finally obtaining a loan from banking or financial institutions. The task involves preparing a proposal, checking the background of the client firm for its creditworthiness, preparing pro forma balance sheets and
documents and finally obtaining the loan for the client. To facilitate better management, the firm uses PERT. It is currently processing the proposed loan for Alfa enterprises. The team assigned for this project has identified the following activities:
Activity Description Immediate Predecessor
A Start preparing proposal as per template -
B Check credit worthiness of firm -
C Create a rough draft proposal A,B
D Carry out need analysis with cost C
E Estimate future
F Prepare pro forma financial statements E
G Prepare and obtain approval of legal documents C
H Integrate all documents and produce proposal D,F,G
I Identify potential sources of capital and select G,F
J Check approve and print final legal proposal H
K Sign agreement and transfer funds I,J
Activity Time Optimistic Time Most Likely Time Pessimistic
A 4 7 10
B 2 5 8
C 2 5 8
D 16 19 28
E 6 9 24
F 1 7 13
G 4 10 28
H 2 5 14
I 5 8 17
J 2 5 8
K 19 28 37
a. Calculate the expected time and variance for each activity.
b. Construct a PERT network
c. Find the critical path and expected duration to complete the project
d. What is the variance and standard deviation of the project length
e. If the company has a policy of setting up a project with 95% probability of achieving the plan, what time frame should the company set for this project?
Step by step
Solved in 2 steps with 2 images