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98 Part 1 • SyStemS analySiS FundamentalS

Figure 3.eX1
Description Task Must Follow Time (Weeks)
Data to help in the organization
of a design project for creating Draw data flow A None 5
an information system that tracks Draw decision tree B A 4
shipments of frozen foods to Revise tree C B 10
warehouses. Write up project D C, I 4
Organize data dictionary E A 7
Do output prototype F None 2
Revise output design G F 9
Write use cases H None 10
Design database I H, E, and G 8

a. Given a discount rate of 8 percent (.08), perform present value analysis on the data for Alamo
Foods. (Hint: Use this formula:
1
111 1 i2 n
to find the multipliers for years 1 to 6.)
b. What is your recommendation for Alamo Foods?
14. a. Suppose the discount rate in Problem 13a changes to 13 percent (.13). Perform present value
analysis using the new discount rate.
b. What is your recommendation to Alamo Foods now?
c. Explain the difference between Problem 13b and Problem 14b.
15. Solve Problem 13 using an electronic spreadsheet program such as Excel.
16. Use a spreadsheet program to solve Problem 12.
17. Solve Problem 13 using a function for net present value, such as @NPV (x, range) in Excel.
18. Brian F. O’Byrne (“F,” he says, stands for “frozen”) owns a frozen-foods company and wants to
develop an information system for tracking shipments to warehouses.
a. Using the data from the table in Figure 3.EX1, draw a Gantt chart to help Brian organize his
design project.
b. When is it appropriate to use a Gantt chart? What are the disadvantages of using a Gantt chart?
Explain in a paragraph.
19. In addition to using a Gantt chart, you’ve drawn a PERT diagram for Brian so that you can commu-
nicate the necessity of keeping an eye on the critical path. Consult Figure 3.EX2, which was derived
from the data from Figure 3.EX1. List all paths and calculate and identify the critical path.
20. Cherry Jones owns a homeopathic medicine company called Faithhealers. She sells vitamins
and other relatively nonperishable products for those who want choices regarding alternative
medicine. Cherry is developing a new system that would require her staff to be retrained.
Given the information in Figure 3.EX3, make a PERT diagram for her and identify the critical
path. If Cherry could find a way to save time on the “write use cases” phase, would it help? Why
or why not?
21. Using the PERT diagram in Figure 3.EX2 to determine answers:
a. What activities can you expedite to complete the project a week ahead of schedule?
b. Suppose Activity E is the least costly activity to expedite. What happens if you try to expedite the
project by more than one week? Explain.

Figure 3.eX2 B
20 40 C
The PERT diagram for Brian’s A E D
frozen-foods company. 60 70
H
10 50 I

F G
30