Case Study: PERT MUSTANG 1

Case Study: Pert Mustang

OPS/350
Case Study: Pert Mustang 2

1. Case Outline

Robert Auto Sales and Service (RASAS) consists of three car dealerships that sells and

service several American and Japanese cars and owned two auto parts stores, a large body shop and

car painting business and auto salvage yard. After seeing an opportunity to appeal to a new market,

the owner, Vikky Roberts is interested in restoring a 1965 Shelby Mustang GT 350 for advertising a

new restoration business she plans to start. Roberts wants the new business to appeal to both types

of people. Vikky first envisions serving as parts broker for ‘new old stock’ (NOS), new parts that

were manufactured many years ago and are still packaged in their original cartons or even machine

new parts to replicate those that are hard to find or no longer in existence. For the second group,

RASAS would assemble a library of parts and body manuals for old cars to serve as an information

resource for do-it-yourself restorers. RASAS would assist the do-it-yourself restorers in compiling

the parts list and acquire the parts for them or even RASAS would take charge of the entire

restoration.

The restoration project involves 22 activities (which are listed A-V) and has a window of 45

days to be completed so that the car can be displayed in an auto show which is vital to her new

campaign. Like any thorough leader, Vikky requested the scope of how the restoration business fits

with her other businesses and requires reporting on the activities that need to be completed. An

assessment of whether the project can be completed on time within the allocated budget is also a

measure. She would like to limit the total expenditures on this project not more than $70,000,

including the $50,000 she had spent to acquire the car.

2. Learning issues
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This case allows us to see how a project is managed from start to end. A clear understanding

of a project’s organization and how personnel are going to work together to complete the project are

keys to success. In this section, we will address (1) defining the scope and objectives, (2) selecting the

project manager and team, and (3) recognizing the organizational structure. The three main goals of any

project are (1) complete the project on time or earlier, (2) do not exceed the budget, and (3) meet the

specifications to the satisfaction of the customer ( Krajewski, Malhotra, Ritzman, 2015).

During the defining phase, one should understand what the scope and objective of the

project which will help support the vison or desired outcomes. The outcome of a project is as good

as its leader. It is vital that the right project manager AND team are buying in and able to execute.

One of the first objectives would be to structure a plan that outlines the specific tasks to be

accomplished, along with their projected finish times. Projects vary based on volume, cost, time

and other factors. Truthfully, there are a ton of methodologies and phases that can be uses to

accomplish a project. Below are some core:

1. Defining the work breakdown schedule is essentially ensuring that all important task for the

project to be completed is taken into consideration.

2. The network planning method is used to depict the relationships between activities. The

two methods that can be used are the critical path method (CPM) and the program

evaluation review technique (PERT) and the usage of these methods will illustrated. These

are tied the creation of a schedule of project activities which will assist the manager to

estimate the completion time of a project by finding the critical path, identify start and finish

times for each activity and calculate the amount of slack for each activity.

3. Analyzing cost-time trade-offs is another area that project managers should strongly focus

on. PERT/CPM will assist managers to analyze and keep costs at acceptable levels by

obtaining minimum-cost schedules. A project manager may consider crashing, or

expediting, some activities to reduce overall project completion time and total project costs.
Case Study: Pert Mustang 4

This can come in the form of hiring temps to aide in the volume and even hiring consultants

for specific expertise as it relates to the project.

4. Developing a risk-management plan which identifies the key risks to a project’s success

and define ways to get around them is also an essential part of working towards a successful

project.

The preceding would be considered as the “prepping” portion of the project. After planning, the

target is to effectively execute the project, making sure the project on schedule within the budget of

allocated resources. This can be undertaken by effectively monitor the project status using good

tracking or KPI system - monitoring the progress of activities throughout the project is important to

avoid potential overloading of resources.

Steps in using PERT/CPM are:

 Defining the core tasks

 Establishing the relationship among activities and decides which activities must precede and
which must follow others
 Draw the network connecting the activities
 Allocate time and cost estimates to each activity
 Identify the critical path which would be the longest time path or in other words the
shortest time the project can be completed
 Monitor and control the project

The critical path analysis basically provides the information of the activity like what is the

earliest time or latest time, what is the slack which then would enable us to identify activities that

can be delayed, identifies critical path. Any delay on critical path activities would definitely delays

project.

Objectives:

Prepare the report that Roberts requested, assuming that the project will begin immediately.

Assume 45 working days are available to complete the project, including transporting car to
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Detroit before the auto show begins. Your report should briefly discuss the aspects of the

proposed new business, such as the competitive priorities that Roberts asked about.

Vikky has a strong interest in expanding her business into vintage car restoration business

other than her three car dealerships, two auto parts stores, body/paint shop and one auto salvage

yard. We have to start by looking into the aspects of how the new proposed business fits with

RASAS’s other businesses. As RASAS is already consists of three car dealerships, this vintage car

restoration business also could enter into the packages to make her business as all-in-one. The three

other businesses and the new business can work interdependently to bring up RASAS’s reputation

to be the best in car business.

Areas Category
1. Parts Broker  New old stock (NOS)
 Replication of old parts (for parts that are hard to
find or that no longer exist)
2. Information &  Compiling parts lists and body manuals for do-it
Restoration Centre yourself restorers.
 Take charge of entire restoration.

As a start of this new business, Roberts can use her own Mustang that will be restored in a
mint condition without customization to be exhibited in sales and advertising and taken to auto
shows to attract business. By looking into the areas of her new business, she could concentrate on
the following areas:

Competitive Priorities.

1. Cost

Expanding the business into the vintage car restoration can potentially to lead to higher
costs. In going thus route, Vikky would need to ensure the right people are in plave. This ca be
costly. However, as RASAS is already into the car business, it should have talented and
experienced craftsmen who are really knowledgeable and well-informed about cars. By
expanding her business within the same division, she will not have many drawbacks in looking
for qualified craftsmen. Costs for new parts for the restoration process can be minimize as they
can be acquired at RASAS’ auto parts stores.
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2. Quality
Vintage car owners take their car to high quality car restoration shop that really cares about their
cars and are willing to provide the best service to them. They will not worry on how much they are
paying but worry on the worth fullness of paying that much. The standard is 100% quality and the
parts being restored as they will not sacrifice the quality for quantity.

3. Flexibility
Providing customization according to the customer’s preference is one of the best criterions in
doing vintage car restoration business. As mentioned in the case, the proposed new business would
accept any kind of restoration a customer wanted even though for Roberts, she just wants her
Mustang to be restored into mint condition. By putting the customers dream car up to their
specifications, RASAS could have a competitive advantage compare to their competitors.
Therefore, Roberts and her team should be able to do as much or as little as their customers like in
order to capitalize the market.

4. Time
Time also can be an important competitive priority because in any service businesses, customers
will always ask on when they could get back their items. As in vintage car restoration business,
money and time could not be narrowed or lessened. However, they could provide on-time delivery
which means meeting their delivery time as promised earlier. They might take longer duration in
order to produce the best vintage restored cars but they must be able to meet their datelines at the
same time. As for example, there are only 45 working days available for restoring Roberts’s
Mustang and she wanted to get it done within that duration to ensure that it could make it to the
Detroit show on time.

5. Customer Service
In my opinion, the beating heart of any operation. Since RASAS is known as a diversified and
successful mini-empire that consists of other businesses, customers must have confidence in the
RASAS’ businesses. So, for this new business, RASAS must be able to provide good services to
attract the target customers who are vintage car enthusiasts. Vintage car enthusiasts have different
preferences in restoring their car. So, RASAS will provide basic restoration, mint condition
restoration, and customization. RASAS will tailor-made any type of restoration that a customer
wants. Customers’ tastes and preferences will be taken as a top priority in this new business. The
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services provided by RASAS will attract vintage car owners who will trust RASAS to restore their
car, customers who desire to purchase vintage cars that RASAS have restored and do-it-yourself
restorers. The key competitive priorities for the restoration business most likely would be high cost,
top quality and customization in a low-volume environment. It may be likely that these competitive
priorities conflict with other market segments RASAS is serving.

Construct a table containing the project available using the letter assigned to each activity, the
time estimates, and the precedence relationships from which you will assemble the network
diagram.

Activity Details Predecessor (# of days)

A Order all needed materials and parts (upholstery, 2
windshield, carburetor, and oil pump).
B Receive upholstery material for seat covers. Cannot be A 30
done until order is placed.
C Receive windshield. Cannot be done until order is A 10
placed.
D Receive carburetor & oil pump. Cannot be done until A 7
order is placed.
E Remove chrome from body. Can be done immediately. 1

F Remove body (doors, hood, trunk, & fenders) from E 1

frame. Cannot be done until chrome is removed.
G Have fenders repaired by body shop. Cannot be done F 4
until body is removed from frame.
H Repair doors, trunk, and hood. Cannot be done until F 6
body is removed from frame.
I Pull engine from chassis. Do after body is removed F 1
from frame.
J Remove rust from frame. Do after the engine has been I 3
pulled from the chassis.
K Regrind engine valves. Do after the engine has been I 5
pulled from the chassis.
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L Replace carburetor & oil pump. Do after engine has I, D 1

been pulled from chassis and after carburetor & oil
pump have been received.
M Rechrome the chrome part. Chrome must have been E 3
removed from the body first.
N Reinstall engine. Do after valves are reground and K, L 1
carburetor & oil pump have been installed.
O Put doors, hood, & trunk back on frame. The doors, H, J 1
hood & trunk must have been repaired first. The frame
must have had its rust removed first.
P Rebuild transmission & replace brakes. Do so after the N, O 4
engine has been reinstalled & the doors, hood & trunk
are back on the frame.
Q Replace windshield. Windshield must have been C 1
received.
R Put fenders back on. The fenders must have been G, P 1
repaired first, the transmission rebuilt & the brakes
replaced.
S Paint car. Cannot be done until the fenders are back on R, Q 4
and windshield replaced.
T Reupholster interior of car. Must have received B, S 7
upholstery material first.
U Put chrome parts back on. Car must have been painted S, M 1
and chrome parts rechrome first.
V Pull car to the Detroit Auto Show. Must have completed T, U 2
reupholstery of interior & have put the chrome parts
back on.

Draw a network diagram of the project similar to Figure 7.3

Determine the activities on the critical path and the estimated slack for each activity
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NETWORK DIAGRAM
ES = earliest start LF = Maximum EF for ending activities
EF = ES + Activity time LF is latest finish; EF is earliest finish
EF = earliest finish LS = LF ­ Activity time
ES = Maximum EF of all predecessors for  LS is latest start
non­starting activities LF = Minimum LS of all successors for non­
ending activities
 S=0
S=0
B 2 32 EF
T 32 39
30 2 32
7 32 39 L
S=0 S=15 S=15 ES F
A 0 2 C 2 12 Q 12 13 LS
2 0 2 10 17 27 1 27 28
S=12 S=12 S=12
D 2 9 L 9 10 S=12 S 16 20
7 14 21 1 21 22 N 10 11 4 28 32
1 22 23 S=0

S=14 S=12 V 39 41
S=14 P 11 15 2 39 41
K 3 8
I 2 3 4 23 27
5 17 22
1 16 17
START S=16
S=12
J 3 6 S=14 FINIS
S=11 S=11 R 15 16 H
3 19 22 O 8 9
F 1 2 H 2 8 1 27 28
1 22 23
1 12 13 6 13 22 S=18
S=21 U 20 21
G 2 6 1 38 39
S=11 S=34
4 33 27
E 0 1 M 1 4
1 11 12 3 35 38 Critical path: A B
  TV
 References

Krajewski, L., Malhotra, M., & Ritzman, L. (2015). Operations management: Processes and

supply chains (11thEd.). Upper Saddle River, NJ: Pearson.