Pr o jec t Management

THE MANAGERIAL PROCESS

Clifford F. Gray
Eric W. Larson
Third Edition

BMGN
N470

Reducing Project Duration

Copyright 2006 The McGraw-Hill Companies. All rights reserved.

PowerPoint Presentation by Charlie Cook

Rationale
Rationale for
for Reducing
Reducing Project
Project Duration
Duration
Time Is Money: Cost-Time Tradeoffs
Reducing the time of a critical activity usually incurs
additional direct costs.
Cost-time solutions focus on reducing (crashing)
activities on the critical path to shorten overall duration
of the project.

Reasons for imposed project duration dates:

Customer requirements and contract commitments
Time-to-market pressures
Incentive contracts (bonuses for early completion)
Unforeseen delays
Overhead costs
Pressure to move resources to other projects
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Options
Options for
for Accelerating
Accelerating Project
Project Completion
Completion
Options with unconstrained resources
Adding Resources
Outsourcing Project Work
Scheduling Overtime
Establishing a Core Project Team
Do It TwiceFast and Correctly

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Options
Options for
for Accelerating
Accelerating Project
Project Completion
Completion
Options with constrained resources
Fast-Tracking
Reducing Project Scope
Compromise Quality

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Explanation
Explanation of
of Project
Project Costs
Costs
Project Indirect Costs
Costs that cannot be associated with any particular
work package or project activity.
Supervision, administration, consultants, and interest

Costs that vary (increase) with time.

Reducing project time directly reduces indirect costs.

Direct Costs
Normal costs that can be assigned directly to a
specific work package or project activity.
Labor, materials, equipment, and subcontractors

Crashing activities increases direct costs.

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Reducing
Reducing Project
Project Duration
Duration to
to Reduce
Reduce
Project
Project Cost
Cost
Identifying
Identifyingdirect
direct costs
coststo
toreduce
reduceproject
projecttime
time
Gather
Gatherinformation
informationabout
aboutdirect
directand
andindirect
indirect
costs
of
specific
project
durations.
costs of specific project durations.
Search
Searchcritical
criticalactivities
activitiesfor
forlowest
lowestdirect-cost
direct-cost
activities
activitiesto
toshorten
shortenproject
projectduration.
duration.
Compute
Computetotal
totalcosts
costsfor
forspecific
specificdurations
durationsand
and
compare
compareto
tobenefits
benefitsof
ofreducing
reducingproject
projecttime.
time.

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Project
Project Cost
CostDuration
Duration Graph
Graph

FIGURE 9.1
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Constructing
Constructing aa Project
Project Cost
CostDuration
Duration Graph
Graph
Find total direct costs for selected project
durations.
Find total indirect costs for selected project
durations.
Sum direct and indirect costs for these selected
project durations.
Compare additional cost alternatives for
benefits.

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Constructing
Constructing aa Project
Project CostDuration
CostDuration Graph
Graph
Determining Activities to Shorten
Shorten the activities with the smallest increase in cost
per unit of time.
Assumptions:
The cost relationship is linear.
Normal time assumes low-cost, efficient methods to
complete the activity.
Crash time represents a limitthe greatest time
reduction possible under realistic conditions.
Slope represents a constant cost per unit of time.
All accelerations must occur within the normal and
crash times.
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Activity
Activity Graph
Graph

FIGURE 9.2
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Cost
CostDuration
Duration Trade-off
Trade-off Example
Example

FIGURE 9.3
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Cost
CostDuration
Duration Trade-off
Trade-off Example
Example (contd)
(contd)

FIGURE 9.3 (contd)

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Cost
CostDuration
Duration Trade-off
Trade-off Example
Example (contd)
(contd)

FIGURE 9.4 (contd)

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Cost
CostDuration
Duration Trade-off
Trade-off Example
Example (contd)
(contd)

FIGURE 9.4 (contd)

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Cost
CostDuration
Duration Trade-off
Trade-off Example
Example (contd)
(contd)

FIGURE 9.4 (contd)

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Summary
Summary Costs
Costs by
by Duration
Duration

FIGURE 9.5
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Project
Project Cost
CostDuration
Duration Graph
Graph

FIGURE 9.6
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Practical
Practical Considerations
Considerations
Using the Project CostDuration Graph
Crash Times
Linearity Assumption
Choice of Activities to Crash Revisited
Time Reduction Decisions and Sensitivity

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What
What ifif Cost,
Cost, Not
Not Time
Time is
is the
the Issue?
Issue?
Commonly Used Options for Cutting Costs
Reduce project scope
Have owner take on more responsibility
Outsourcing project activities or even the entire project
Brainstorming cost savings options

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