What is meant by a critical path? [5 marks]
The village bakery has asked you to advise them about setting up a web site, including a trading function.
(a) Draw up a project plan, illustrated by a GANNT chart and indicate the critical path. [5 marks]
(b) Make an estimate of the costs involved, and estimate how much working capital you would need. [5 marks]
(c) What other advice would you give them?
In a project plan the Critical Path is the longest sequence of dependent activities that lead to the completion of the plan.
The critical path defines the shortest time in which a project can be completed.
Any delay of a task on the critical path will delay completion of the whole plan.
|Gather requirements||Initial discussions with the client|
|Agree spec||Agree approach and functionality with client|
|Acquire Internet account||Standard ISP account|
|Acquire hardware||PC etc for client's use|
|Acquire merchant system||Probably facility provided by ISP; use client's existing credit card processing|
|Develop UI||Graphical style|
|Agree UI||Agree look with client|
|Alpha build||Say about 20 pages at half day per page plus photos and order form|
|Test||Test the site; check with client; process dummy transactions|
|Beta build||Make corrections required|
|Test||Test and check again|
Critical path in red.
|Analyst/Web page author||48||300||14400|
|Maintenance/running costs:||Per month|
|Maintenance say 12% p.a.||194|
|Depreciation - say 60 months||323|
|Total monthly cost||617|
(c) Assume 50% is paid up-front and 50% on completion then approximately £10K of working capital would be needed.
Alternatively based on 10% on signature, and monthly payments, paid on 30 days thereafter
|Month 1||Month 2||Month 3|
|End Month 1||7740|
|End Month 2||9720|
|Cash at end||-6660||-9720||0|
Again about £10K working capital.
(c) Assuming the bakery's profit is about 10% of turnover, the web pages will need to generate an extra £6000 of business each month. At, say, £10 for a cake, this means selling an extra 600 cakes a month or 30 per working day.
Hard, but possible, but may require increase in production. Better means of distribution, such as overnight courier services may also be required.
Customer details may require registration under the Data Protection Act.
Other factors, such as increased publicity and reduction of seasonal effects may help justify the cost.
Web pages do not exist, or work, in isolation. The baker will need to do other things to guide people to his web-site, for example by including the URL in conventional advertising.
Introducing the Internet to a conventional business may trigger more far-reaching changes than just a new order-taking system. Although for a small producer the order-taking system may simply print manual, paper based orders, as the business grows consideration may be given to for example, automatic stock control systems, just-in-time ordering systems, and upgraded accounting and information systems such as customer lists and a recipe database. Supplies, such as flour, may possibly be ordered advantageously via the 'net. The net gives access to a wider range of suppliers and equipment manufacturers, as well as specialist discussion groups, both professional and amateur, for example mailing lists devoted to particular sorts of bread recipes. The business, potentially, stops being local and has a global marketplace.