Calculator Allowed: Yes



Transcription of this question: 2.Sleep Well LimitedSleep Well Limited is a family-run private limited company. They own a luxurious and prestigioushotel, Sleep Well (SW’), which is located in an expensive city-centre location in New York,United States (US). Its customers are international travellers who expect comfort and excellentservice and are willing to pay a high price. Capacity utilization of the hotel rooms is 95% onmost days. However, loyal customers are frustrated that sometimes they cannot reserve a roombecause the hotel is full.The hotel management is considering extending the hotel with a new building with larger roomsand the most luxurious facilities. The prices of the larger rooms in the new building will be 50%higher than the rooms in the current building.Market research commissioned by SW highlighted the following:• In the short term, the economic environment in many of the home countries of SWs customerswill deteriorate. However, the economic environment should improve after two years.The US dollar is likely to increase in value in relation to other currencies.SW customers’ demand is price inelastic and is income elastic.• Severe shortage of qualified labour is forecasted in the service industry.The table below shows the Operation Manager’s planned activities for legal procedures and theconstruction of the new building.The table below shows the Operation Manager’s planned activities for legal procedures and theconstruction of the new building.ActivityOrder/DependencyMust follow AMust follow BMust follow C and DMust follow EMust follow EMust follow GMust follow F and HDuration4 months5 months3 months4 months6 months11 months3 months4 months2 monthsHowever, the Finance Manager is concerned that strict planning regulations imposed onconstruction in the city centre could create extra costs and cause delays in the completion of thenew building. Selling shares is considered as one option for financing the project. The MarketingManager is worried about the impact on the customer experience during the construction process.(Question 2 continued)(a)(b)(c)(d)(f)Identify two advantages of Sleep Well Limited being a private limitedcompany.Define the term capacity utilization.Explain one advantage and one disadvantage of using the critical pathanalysis model as a project management tool, for the construction of SWsnew building.Construct a fully labelled network diagram to represent the sequence ofactivities in the table. Show the earliest starting time (EST) and the latestfinishing time (LFT) for each activity and identify the critical path.(i)(iii)Identify any total float from the diagram constructed in part (d)(no working required).Using the total float you identified in part (i), calculate any free float(show all your working).Comment on how SW could use any free float as calculated in part (ii).[2][2][2][2]Examine the option of the construction of the new building for SW.

Leave a Reply