Critical path analysis is a method that is used to plan out the many activities involved in a project to be able to find the most efficient way of complete it and how to complete it on time.
From a research and development point of view, the decision to go ahead with this project relies solely on the critical path analysis provided by Amy Jones. In light of this, the operations director is rightly concerned about how valuable the data provided by the critical path analysis is. The arguments for and against seem to be balanced.
Therefore, I present the most significant argument of how valuable a critical path analysis – which is how Amy’s data allows the business to be have a clear outline of when and where money is spent in the project. This means that the critical path analysis will help First Cars plc with their cash flow which would allow them subsequently to be able to plan out careful spending to ensure they are able to fund the project. This would allow them to under go an investment appraisal before starting the project as they also have specific dates in which each part of the development would be ready. This is vital because of First Cars plc’s limited financial reserves it would mean they would be able workout the payback period and the average rate of return which could mean they are able to work out expected profits for the coming year from the which would mean shareholders would feel happier with the business as they are able to see a clear direction in which the business is improving, but most importantly it will show if the project is viable as they will be able to know how quickly it will allow the business to generate cash quickly to ensure they do not face a poor cash flow situation which could see the business dipping into liquidation.
Another potential benefit of using critical path analysis is that it allows such an important project to be planned thoroughly in order to make sure everything is completed properly...