Question 11 Let\'s imagine that you graduated from RBS and have become a success
ID: 2540925 • Letter: Q
Question
Question 11 Let's imagine that you graduated from RBS and have become a successful management consultant. Planning your work for the next month, you have realized that you have committed yourself to four projects with deadline in four weeks' time. You work a maximum of 8 hours per day, five times a week, and you are determined to continue to preserve your life-work balance (no overtime). As you are the only expert in your field of knowledge, you cannot outsource your projects to anybody you know. Using the Theory of Constraints' methodology, prioritize your projects, using the following information. Please note that we assume that you can work only on one project at a time. (Hint: use working hours as a constraint.) Project Pojc Project Project Projects Estimated revenue upon 5.0003,000 10,0009,000 27,000 completion of a project Estimated costs for a project Number of hours you need to 1,000 ,500 4,000 3,000 9,500 complete each project 50 10 120 60 240Explanation / Answer
Solution:
The problem is related to “Theory of Constraints” i.e. Resources in Scarcity.
Here Number of hours are limited to total 160 hours for a 4 weeks month.
Number of Hours Available = 8 hrs in a day x 5 days per week x 4 weeks per month
= 160 Hours
Key factor is the factor which is under scarcity. IN this case, we need to priorities the work based on the highest profit per limiting factor. So we need to calculate the Profit per project per hours.
Project
A
B
C
D
Estimated revenue upon completion of a project
$5,000
$3,000
$10,000
$9,000
Less: Estimated costs for a project
$1,000
$1,500
$4,000
$3,000
Estimated Profit from a Project (A)
$4,000
$1,500
$6,000
$6,000
Number of hours required to complete each project (B)
50
10
120
60
Estimated Profit of a project per hour (A/B)
$80
$150
$50
$100
Ranking / Priority of Project
3
1
4
2
Priorities
Rank 1 --- Project B is to be done first, since it has highest Estimated Profit per hour. 10 Hours
Rank 2 – Project D. 60 Hours
Rank 3 – Project A. 50 Hours
Rank 4 – Project C --- It will not be done since total available hours are 160 hours and this project requires 120 Hours.
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Project
A
B
C
D
Estimated revenue upon completion of a project
$5,000
$3,000
$10,000
$9,000
Less: Estimated costs for a project
$1,000
$1,500
$4,000
$3,000
Estimated Profit from a Project (A)
$4,000
$1,500
$6,000
$6,000
Number of hours required to complete each project (B)
50
10
120
60
Estimated Profit of a project per hour (A/B)
$80
$150
$50
$100
Ranking / Priority of Project
3
1
4
2
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