Read the case “The Pert Mustang”

Read the case “The Pert Mustang”

Prepare a project budget showing the cost of each activity and the total for the project. Can the project be completed within the total budget? Are there any cash flow problems? If so, how might Roberts overcome them?

The Pert Mustang Case

Roberts Auto Sales and Service (RASAS) consists of three car dealerships that sell and service several makes of American and Japanese cars, two auto parts stores, a large body shop and car painting business, and an auto salvage yard. Vicky Roberts, owner of RASAS, went into the car business when she inherited a Ford dealership from her father. She was able to capitalize on her knowledge and experience to build her business into the diversified and successful mini- empire it is today. Her motto, “Sell ‘em today, repair ‘em tomorrow!” reflects a strategy that she refers to in private as “Get ‘em coming and going.”
Roberts has always retained a soft spot in her heart for high-performance Mustangs and just acquired a 1965 Shelby Mustang GT 350 that needs a lot of restoration. She also notes the public’s growing interest in the restoration of vintage automobiles. Roberts is thinking of expanding into the vintage car res- toration business and needs help in assessing the feasibility of such a move. She wants to restore her 1965 Shelby Mustang to mint condition, or as close to mint condition as possible. If she decides to go into the car restoring busi- ness, she can use the Mustang as an exhibit in sales and advertising and take it to auto shows to attract business for the new shop.
Roberts believes that many people want the thrill of restoring an old car themselves, but they do not have the time to run down all the old parts. Still, others just want to own a vintage auto because it is different and many of them have plenty of money to pay someone to restore an auto for them.
Roberts wants the new business to appeal to both types of people. For the first group, she envisions serving as a parts broker for NOS (“new old stock”), new parts that were manufactured many years ago and are still packaged in their original cartons. It can be a time-consuming process to find the right part. RASAS could also machine new parts to replicate those that are hard to find or that no longer exist.
In addition, RASAS could assemble a library of parts and body manuals for old cars to serve as an information resource for do-it-yourself restorers. The do-it-yourselfers could come to RASAS for help in compiling parts lists, and RASAS could acquire the parts for them. For others, RASAS would take charge of the entire restoration.
Roberts asked the director of service operations to take a good look at her Mustang and determine what needs to be done to restore it to the condi- tion it was in when it came from the factory more than 40 years ago. She
wants to restore this car in time to exhibit it at the Detroit Auto Show. If the car gets a lot of press, it will be a real public relations coup for RASAS— especially if Roberts decides to enter this new venture. Even if she does not, the car will be a showpiece for the rest of the business.
Roberts asked the director of service operations to prepare a report about what is involved in restoring the car and whether it can be done in time for the Detroit show in 45 working days using PERT/CPM. The parts manager, the body shop manager, and the chief mechanic have provided the following estimates of times and activities that need to be done, as well as cost estimates:
a. Order all needed material and parts (upholstery, windshield, carburetor, and oil pump). Time: 2 days. Cost (telephone calls and labor): $100.
b. Receive upholstery material for seat covers. Cannot be done until order is placed. Time: 30 days. Cost: $2,100.
c. Receive windshield. Cannot be done until order is placed. Time: 10 days. Cost: $800.
d. Receive carburetor and oil pump. Cannot be done until order is placed. Time: 7 days. Cost: $1,750.
e. Remove chrome from body. Can be done immediately. Time: 1 day. Cost: $200.
f. Remove body (doors, hood, trunk, and fenders) from frame. Cannot be done until chrome is removed. Time: 1 day. Cost: $300.
g. Have fenders repaired by body shop. Cannot be done until body is removed from frame. Time: 4 days. Cost: $1,000.
h. Repair doors, trunk, and hood. Cannot be done until body is removed from frame. Time: 6 days. Cost: $1,500.
i. Pull engine from chassis. Do after body is removed from frame. Time: 1 day. Cost: $200.
j. Remove rust from frame. Do after the engine has been pulled from the chassis. Time: 3 days. Cost $900.
k. Regrind engine valves. Do after the engine has been pulled from the chassis. Time: 5 days. Cost: $1,000
l. Replace carburetor and oil pump. Do after engine has been pulled from chassis and after carburetor and oil pump have been received. Time: 1 day. Cost: $200.
m. Rechrome the chrome parts. Chrome must have been removed from the body first. Time: 3 days. Cost: $210.
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