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**preview**shows pages 1-2. to view the full**6 pages of the document.**Chapter 13 Project Scheduling: PERT/CPM

showed how PERT/CPM can be used to plan, schedule, and control a wide variety

of projects. The key to this approach to project scheduling is the development of

a PERT/CPM project network that depicts the activities and their precedence

relation- ships. From this project network and activity time estimates, the critical

path for the net- work and the associated critical activities can be identified. In

the process, an activity schedule showing the earliest start and earliest finish

times, the latest start and latest finish times, and the slack for each activity can be

identified.

We showed how we can include capabilities for handling variable or uncertain

activity times and how to use this information to provide a probability statement

about the chances the project can be completed in a specified period of time. We

introduced crashing as a procedure for reducing activity times to meet project

completion deadlines, and we showed how a linear programming model can be

used to determine the crashing decisions that will minimize the cost of reducing

the project completion time.

Chapter 14 Inventory Models

presented some of the approaches used to assist managers in establish- ing low-

cost inventory policies. We first considered cases in which the demand rate for

the product is constant. In analyzing these inventory systems, total cost models

were developed, which included ordering costs, holding costs, and, in some cases,

backorder costs. Then minimum cost formulas for the order quantity Q were

presented. A reorder point r can be established by considering the lead-time

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demand.

In addition, we discussed inventory models in which a deterministic and

constant rate could not be assumed, and thus demand was described by a

probability distribution. A critical issue with these probabilistic inventory

models is obtaining a probability distribution that most realistically

approximates the demand distribution. We first described a single-period model

where only one order is placed for the product and, at the end of the period,

either the product has sold out or a surplus remains of unsold products that will

be sold for a salvage value. Solution procedures were then presented for

multiperiod models based on either an order-quantity, reorder point, continuous

review system or a replenishment-level, periodic review system.

In closing this chapter, we reemphasize that inventory and inventory systems

can be an expensive phase of a firm’s operation. It is important for managers to

be aware of the cost of inventory systems and to make the best possible

operating policy decisions for the inventory system. Inventory models, as

presented in this chapter, can help managers to develop good inventory policies.

The Q.M. in Action, Multistage Inventory Planning at Deere & Company, provides

another example of how computer-based inventory models can be used to

provide optimal inventory policies and cost reductions.

Chapter 15 Waiting Line Models

presented a variety of waiting line models that have been developed to help

managers make better decisions concerning the operation of waiting lines. For

each model we presented formulas that could be used to develop operating

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