The following information has been provided regarding Buy it Direct's new IT system installation: The Operations Director has produced the following network diagram. This project must be completed within 45 weeks. The Operations Director has produced the following network diagram: ``` Activity A: Identify problem Activity B: Recruit staff Activity C: Design IT solution Activity D: Implementation and testing Activity E: Consult with software supplier Activity F: Staff training Activity G: Order equipment from suppliers ``` ![Network Diagram](link_to_network_diagram_image) Identify the critical path for the project and explain the potential value of Critical Path Analysis (CPA) for the effective management of the installation of the new IT system.

A-Level Edexcel Business Financial Planning: The following information has be

The following information has been provided regarding Buy it Direct's new IT system installation: The Operations Director has produced the following network diagram - Edexcel - A-Level Business - Question 2 - 2022 - Paper 2

Question 2

The following information has been provided regarding Buy it Direct's new IT system installation: The Operations Director has produced the following network diagram... show full transcript

Worked Solution & Example Answer:The following information has been provided regarding Buy it Direct's new IT system installation: The Operations Director has produced the following network diagram - Edexcel - A-Level Business - Question 2 - 2022 - Paper 2

Step 1

Identify the critical path for the project

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Answer

The critical path for the project can be calculated by determining the longest path through the network diagram of activities, which dictates the minimum time required to complete the project. The durations are as follows:

A to B (2 weeks)
B to C (4 weeks)
C to D (6 weeks)
D to E (3 weeks)
E to G (2 weeks)
G to F (4 weeks)

Thus, the lengths of paths can be outlined as:

Path 1: A → B → C → D → E → G → F = 2 + 4 + 6 + 3 + 2 + 4 = 21 weeks
Path 2: A → B → E → G → F = 2 + 2 + 4 = 8 weeks

The critical path is A → B → C → D → E → G → F taking a total of 41 weeks.

Step 2

Explain the potential value of Critical Path Analysis (CPA)

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Answer

The potential value of Critical Path Analysis (CPA) is significant for several reasons:

1. Scheduling Efficiency

CPA enables Buy it Direct to schedule activities efficiently, allowing project managers to allocate resources and staff effectively to meet project timelines. By identifying the critical path, they can prioritize tasks that directly impact the project completion time.

2. Cost Management

Through CPA, the company can better manage its cash flow for the project. By knowing the exact durations of tasks, they can even adjust cash flow requirements, ensuring that funds are available when needed without unnecessary delays.

3. Risk Management

Identifying the critical path allows for better risk management strategies. If any task on the critical path is delayed, the entire project could be delayed. Hence, the Operations Director can focus efforts on monitoring these tasks closely.

4. Resource Allocation

With CPA, resources (like staff and equipment) can be allocated precisely where they are needed most, ensuring efficient use of capital and minimizing wastage.

5. Improved Communication

The clear layout of tasks and their interdependencies simplifies communication among team members, ensuring everyone understands their responsibilities and deadlines, which helps keep the project on track.

In summary, CPA serves as a critical tool for Buy it Direct, assisting in effective planning, monitoring, and execution of the IT system installation while helping to mitigate potential project delays.