A project manager ascertained that five different resources are needed to complete a project that has been estimated to last 37 days
Just to be on the safe side, the project manager told the client that the project would definitely be delivered in 40 days and 40 nights and arranged to rent the resources for that period of time. The project manager goes to the local rental center at the start of day 1 of the project, signs a 40-day lease agreement for all five resources, and brings them to the site to begin the project. Analyze the Gantt chart and resource list (activity durations are in parenthesis) and determine how much money is being wasted with this rental plan. If each resource could be rented for just the time it takes to complete each activity, what would the charge to the project be?
Resource Number Daily Rate
1 $1,000
2 $1,200
3 $500
4 $750
5 $800
Activity Length Activity Length
H 3 S 3
M 9 J 1
P 6 W 4
B 7 T 4
R 9 G 4
F 5 K 10
The project manager has paid for 40 days of capacity for each resource and the sum of the resources costs is $4,250. The total rental cost is 40 × $4,250 = $170,000.
The actual use of the resources is as follows:
Resource 1 = 18 × $1,000 = $18,000
Resource 2 = 15 × $1,200 = $18,000
Resource 3 = 5 × $500 = $2,500
Resource 4 = 14 × $750 = $10,500
Resource 5 = 13 × $800 = $10,400
The total cost for actual use is $59,400, so there is $170,000 - $59,400 = $110,600 wasted.
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