1996 Paper 8 Question 5
Business Studies
In a project plan what is meant by a critical path, and why is the concept useful?
[5 marks]
A certain software project has two phases. Each phase has three tasks (analysis,
coding and testing) which must be performed sequentially. Analysis for phase 2
cannot be started until analysis for phase 1 is complete. The effort in person-weeks,
as estimated by the programmers, in each task is given in the table below.
Task Phase 1 Phase 2
Analysis 4 8
Coding 4 4
Testing 4 8
Two staff are assigned to the project. Tasks may be performed by either member
of staff. Analysis and coding tasks can have only one person usefully working at a
time whereas, for testing, the time to completion is inversely proportional to the
effort expended.
Draw PERT and GANTT charts for the project, and indicate the critical path.
[5 marks]
Staff are each paid £24,000 per annum. The company allows for overheads of
100% of salary. Equipment worth £50,000 will be needed, depreciated over 5 years.
Payment is proposed as 25% on start, 25% on delivery of the first phase, and
50% on completion. Draw up a rough budget and cash flow for the project. How
much working capital (excluding equipment purchase, but including depreciation)
is required? [5 marks]
What price and delivery would you quote for this project? Explain the additional
factors you have considered in formulating your quotation. [5 marks]