Two Business A2 Level Critical Path Analysis Questions
Q1) Discuss the benefits to Balfour Beatty of using critical path analysis in order to plan its construction projects. (15 marks)
Critical path analysis identifies the most efficient and cost effective way of completing a complex project. The various activities which together will make up the project are identified, and the order of these activities are identified. Then, the duration of each activity is estimated and these factors are then arranged as a network or graph, showing the whole project from start to finish, and showing which tasks can happen at the same time. The sequence of tasks which have to be done one after another with no gaps in between is called the Critical Path.
One benefit of Critical Path analysis to Balfour Beatty is that it always finds the shortest time possible for completing a complex project. “The customer requested completion in 124 weeks but through careful planning using Critical Path Analysis, Balfour Beatty was able to plan the project for completion in 79 weeks.” This can give a competitive edge and is an important element of time-based management. If a company is able to complete the task faster than others, it is more likely that they will get chosen, providing the company with more customers, more revenue and therefore more profit.
A second benefit of Critical Path Analysis to Balfour Beatty is that it allows managers to operate Just-in-time production. Resources such as raw materials, labour and equipment can be employed right at the earliest start time. Construction companies rely on subcontractors to complete certain tasks and for certain equipment to be hired at specific times, so with Critical Path Analysis, a manager could predict the exact time a certain piece of equipment would be needed and book the particular equipment early on to ensure that the company will have it when needed. This saves on the storage costs and opportunity costs of stock holding, and improves liquidity.
Overall, I believe that Critical
Critical path analysis identifies the most efficient and cost effective way of completing a complex project. The various activities which together will make up the project are identified, and the order of these activities are identified. Then, the duration of each activity is estimated and these factors are then arranged as a network or graph, showing the whole project from start to finish, and showing which tasks can happen at the same time. The sequence of tasks which have to be done one after another with no gaps in between is called the Critical Path.
One benefit of Critical Path analysis to Balfour Beatty is that it always finds the shortest time possible for completing a complex project. “The customer requested completion in 124 weeks but through careful planning using Critical Path Analysis, Balfour Beatty was able to plan the project for completion in 79 weeks.” This can give a competitive edge and is an important element of time-based management. If a company is able to complete the task faster than others, it is more likely that they will get chosen, providing the company with more customers, more revenue and therefore more profit.
A second benefit of Critical Path Analysis to Balfour Beatty is that it allows managers to operate Just-in-time production. Resources such as raw materials, labour and equipment can be employed right at the earliest start time. Construction companies rely on subcontractors to complete certain tasks and for certain equipment to be hired at specific times, so with Critical Path Analysis, a manager could predict the exact time a certain piece of equipment would be needed and book the particular equipment early on to ensure that the company will have it when needed. This saves on the storage costs and opportunity costs of stock holding, and improves liquidity.
Overall, I believe that Critical