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94 Cards in this Set
- Front
- Back
Supply Chain Management
DELIVER Transportation |
Supply Chain Management
DELIVER Transportation |
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Two categories of factors influencing transportation costs
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1. product-related
2. market-related |
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product related factors
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- density
- stowability - ease or difficulty of handling - liability |
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market related factors
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- degree of competition
- location of markets - government regulation - freight traffic into and out of a market - domestic vs. international movement |
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basic modes of transportation
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1. motor carriers
2. railroads 3. air carriers 4. water carriers 5. international water carriers 6. pipelines |
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- low cost of entry and low fixed costs but high variable costs
- characterized by a large number of small firms - do not own their rights-of-way |
motor carriers
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advantages of motor carriers
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- high accessibility
- transit times faster than rail or water - small vehicle size coincides with lower inventory strategies and quick replenishment |
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disadvantages of motor carriers
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- relatively high cost compared to rail and water
- reliability can be affected by weather |
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advantages of railroads
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- cost effective for long haul, large volume products
- own rights-of-way - intermodal now permits seamless dock-to-dock service by one company |
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disadvantages of railroads
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- high fixed costs
- accessibility can be a problem - transit times are spotty and generally long |
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- a few large carriers earn about 90% of the revenue
- per ton ile revenue is 18 times hgher than rail; twice that of motor carriers - cost structure is highly variable - do not own rights-of-way - best for goods with a high value to weight ratio |
air carriers
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advantages of air carriers
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- speed: fastest tranist time of modes
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disadvantages of air carriers
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- highest rates
- accessibility is low - capacity is low - reliability subject to weather more than other modes |
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- available along atlantic, gulf and pacific coasts
- mississippi, missouri, tennessee and ohio river systems and great lakes - do not own rights-of-way |
water carriers
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advantages of water carries
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- relatively low cost mode
- high capacity - cost effective for long distance move of low value, bulk-type mineral, agricultural and forest products |
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disadvantages of water carriers
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- long transit times
- low accessibility |
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types of international water carriers
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1. genergal cargo ships
2. bulk carriers 3. tankers 4. container ships 5. RO-RO (roll on-roll off) 6. other |
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- large high capacity cargo holds
- engaged on a contract basis - moany have self-contained cranes for loading/unloading |
general cargo ships
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- specially designed to haul minerals
- can handle multiple cargoes |
bulk carriers
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- specially designed for liquid cargo
- largest vessels afloat, some VLCCs at 500k+ tons |
tankers
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- high speed for ships; increasingly more common and important
- larger vessels can handle up to 5,000 containers |
container ships
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- basically a large ferry that facilitates the loading and unloading process by using drive on/off ramps
- may also have the capacity to haul containers |
RO-RO
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- multipurpose carriers
- barges (not transoceanic) |
other
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- very specialized
- some attempts to transport minerals in a liquid medium, but nother than slurried-coal, no real success - cost structure is highly fixed with low variable costs - own rights-of-way much like rail |
pipelines
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advantages of pipelines
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- most cost effective way to transport high volume of liquids over large distance
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disadvantages of pipelines
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accessibility is very low
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the use of two or more modes of transportation cooperating on the movement of a shipment by publishing a through rate
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intermodal transportation
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biggest advantage of intermodal transportation
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carriers are reluctant to participate
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well developed combinations of inermodal transportation
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- rail/water
- motor/rail - motor/water - motor/air |
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goods are placed in a large box on ship, where they remain untouched until they arrive at consignee's unloading dock
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container-on-flat-car (COFC)
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COFC reduces 4 things
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1. theft
2. damage 3. multiple handling costs 4. intermodal transfer time |
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COFC is estimated to reduce costs from ___ to ___ %
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10 to 20 %
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for international shipments where oceans are separated by a large land mass
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land bridge
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- over the road trailers ride on special rail cars
- takes advantage of motor carrier's flexibility and rail's long haul economic advantage |
- trailer-on-flat-car (TOFC)
- "piggyback" |
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- evolved to carry small, irregular shipments
- fast service, premium rates |
small-package carriers
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provider of logistics services such as warehousing or transportation and logisitcs
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Third Party Providers (3PLS)
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Supply Chain Management
DELIVER Distribution & Site Location |
Supply Chain Management
DELIVER Distribution & Site Location |
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includes warehouses, production facilities, retailers, and the inventory that flows between them
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distribution network
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configuring the network requires decisions related to:
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- location of warehouses and production facilities
- where production should take place - how much inventory should be kept, and where - how to transport inventory from one place to another |
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goal of distribution network
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maximize value and minimize cost
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configuration of network must meet both ______ and ______ needs
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current & future
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most important factor in real estate
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LOCATION!
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the process of identifying the best geographic location for a service or production facility
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facility location
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primary location factors
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- proximity to
1. suppliers 2. customers 3. labor |
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secondary location factors
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- community considerations
- site considerations - quality-of-life issue - other considerations |
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potential advantages for firm going global
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- inside track to foreign markets
- avoid trade barriers - gain access to cheap labor |
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potential disavantages for firm going global
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- political risks may increase
- loss of control of porprietary technology - local infrastructure may be inadequate - high inflation |
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other issues for going global
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- language barrier
- different laws and regulations - different business cultures |
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location analysis methods follws this three step process
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1. identify dominant location factors
2. develop location alternatives 3. evaluate location alternatives |
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five methods for determining locations
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1. factor rating
2. load-distance 3. center of gravity 4. break-even analysis 5. transportation |
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LOOK AT FACTOR RATING EXAMPLE IN NOTES (MAYBE ESSAY???)
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LOOK AT FACTOR RATING EXAMPLE IN NOTES (MAYBE ESSAY???)
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LOOK AT OTHER EXAMPLES AS WELL IN NOTE PACKET
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LOOK AT OTHER EXAMPLES AS WELL IN NOTE PACKET
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3 different approaches to moving products
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1. warehousing
2. direct shipment 3. cross-docking |
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holding inventory reveived from suppliers in warehouses until it is needed by retailers
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warehousing
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advantage of warehousing
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reduced inbound costs because all shipmets are going to the same place
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disadvantage of warehousing
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likely to ship full truckloads inbound, but may ship less than full truckloads outband
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one of the advantages of warehousing strategy is
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risk pooling
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inventory is held in our warehouse to service a large number of retailers
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risk pooling in warehousing
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advantages of direct shipment from suppliers to retailers
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eliminates warehousing costs
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disadvantages of direct shipment from suppliers to retailers
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- less likely to ship full truck loads
- each retail store will require higher levels of inventory and safety stock |
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continuous shipment from suppliers to warehouses where goods are redirected and delivered to retailers in continuous shipments
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cross-docking
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advantages of cross-docking
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- very cost effective
- typically used in high-volume supply chains that have sophisticated information systems (Wal-Mart) |
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disadvantages of cross-docking
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requires...
- excellant communication links - very reliable transportation system - accurate demand forecasts are critical |
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Supply Chain Management
INFORMATION TECHNOLOGY Project Management |
Supply Chain Management
INFORMATION TECHNOLOGY Project Management |
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any endeavor with objectives, multiple activities, defined precendent relationships, ad a specific time period for completion
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project
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five project life cycle phases
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1. conception
2. feasbility analysis or study 3. planning 4. execution 5. termination |
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identify the need
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conception
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costs, benefits, and risks
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feasibility analysis or study
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who, how long, what to do
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planning
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doing the project, performance and tracking
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execution
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ending the project
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termination
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two network techniques for planning, each uses a different estimate of activity time
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PERT and CPM
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things considered in PERT and CPM
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project on schedule, budget, rousources, least amount of time to complete project if necessary
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- developed to manage the polaris missile project
- many tasks pushed the boundaries of science and engineering |
Program Evaluation & Review Technique
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- developed to coordinate maintenance project in the chemical industry
- a complex undertaking, but individual tasks are routine |
Critical Path Method
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we more or less know exactly how long it will take
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deterministic
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rough estimate of how long it will take
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probabilistic
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- graphically display the precedence relationship & sequence of activities
- estimate the project's duration - identify critical activities that cannot be delayed without delaying the project - estimate the amount of slack associated with non-critical activities |
Both PERT and CPM
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Activity-on-Node
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- uses nodes to represnt the activity
- usees arrows to represent precedence relationships |
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the six steps commmon to PERT and CPM
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1. define the project and prepare the work breakdown structure
2. develop relationships among the activities 3. draw the network connecting all of the activities 4. assign time and/or cost estimates to each activity 5. compute the longest time path through the network 6. use the network to help plan, schedule, monitor, and control the project |
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the longest time path through the network
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critical path
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LOOK AT STEP EXAMPLES IN PACKET
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LOOK AT STEP EXAMPLES IN PACKET
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the earliest finish of the immediately preceding activity
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earliest start
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the ES plus activity time
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earliest finish
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Latest start and latest finish depend on whether or not the activity is on the
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critical path
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the activity's late finish minus its early finish
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slack
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all activities on the critical path have __ slack
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zero
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slack deines how long _________ activities can be delayed without delaying the project
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non-critical
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advantages of PERT and CPM
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- especially useful when scheduling and controlling large projects
- straightforward concept and not mathematically complex - graphical networks aid perception of relationships among project activities - critical path and slack time analysis help pinpoint activities that need to be closely watched - project documentation and graphics point out who is reponsible for various activities - applicable to wide variety of projects - useful in monitoring schedules and costs |
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limitations of PERT and CPM
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- assumes clearly defined, independent and stable activities
- specified precedence relationships - activity times follow beta distribution - subjective time estimates - over-emphasis on critical path |
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a _____ is a unique, one time event of some duration that consumes resources and is designed to achieve an objective in a given time period
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project
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each project goes through a five-phase cycle:
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1. concept
2. feasibility study 3. planning 4. execution 5. termination |
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reduceing the length of a project
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crashing
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to crash the project, we need to know the ________ of the project and the _______
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critical path
cost of reducing individual activity times |