ASSIGNMENT 1:

A software house is interested in developing software for a client. Below chart shows the time and cost
required against each activity during the course of project. It also includes the crash time and cost
against each activity. Please note that fixed cost/week is 5000. The task is to

 Develop PERT diagram showing all activities

 Identify the critical path
 Crash the critical activities/paths to identify best time and best cost for the particular project.
 As a project manager what would be your ideal scenario to complete the project. Justify your
decision

Normal Crash

Time Cost Time Cost

(Weeks) (Rs.) (weeks) (Rs.)

1—2 10 12,000 5 20,000

1—3 6 8,000 4 10,000
2—3 0 0 0 0
2—5 8 10,000 5 15000
3—4 9 5000 7 8,000
4—6 14 15,000 11 21000
5—6 17 20,000 15 25000
5—7 9 14,000 6 19,000
6—8 7 12,000 5 18,000
7—8 16 25000 10 45000
7—9 10 16000 8 18000
8—9 8 10000 6 15000

Total 147000 214000

PERT Diagram:
Possible critical paths:

1-2 1600

2-5 1666.666

5-7 1666.666

7-8 3333.333

8-9 2500

Direct cost=147000+5*1600=155,000

Indirect cost=51*5000=255,000 = Total 410,000

Ist Iteration:

Possible Paths:

1-2 1600

2-5 1666.666

5-7 1666.666

7-8 3333.333

8-9 2500

We will crash acticity 2-5 with minimum slope(1666.66)

Direct cost: = 155000 + 5 x 1666.666 = (155,000+8333.33) = 163,333.33.

Indirect cost: = 155,000 + 46 x 5000 , (155,000 x 230,000) = Total 385,000

2nd Iteration:

1-3______ 1000

3-4______ 1500

4-6______ 2000

6-8_______ 3000

8-9______ 2500

We will crash a minimum slop.

1-3 = 1000

Direct cost: = 163,333.33 +4 x 1000 = 167,333.33

Indirect cost: = 163,333.33 + 44 x 5000 = Total 387,333.33

Possible Critical Path:

3-4 1500

4-6 2000

6-8 3000

8-9 2500

Now We will crash minimum slop. 3 – 4

Direct cost: 167,000.33 + 7 x 1500 = 177,833.33

Indirect cost: 167,333.33 + 43 x 5000 = Total 382,333.33

Possible Critical path: 8 - 9

Direct cost: 177,833.33 + 6 x 2500 = 192,833.33

Indirect cost: 177,833.33 + 51 x 5000 = 432,833.33

Critical Path:
5-7

7-8

Direct Cost=192,833.53+(6*1666.66)+9999.99

Direct Cost=202,835.96

Indirect Cost=192,833.33+41*1666.66

=192,833.33+68333.06

=261,166.39

Possible Critical Path

6-8 & 8-9

Direct Cost=202,853.29+(5*3000)=217833.29

Inderict Cost=202,853.29+ (40*5000)+200.00

=402,833.29
Possible Critical Path: 1-2-5-6-8-9

Direct Cost=217,853.29+(10*3333.333)+3333.33

=251,166.66

Indirect Cost=217,833.29+(38*5000)+190000

=407,833.29

Now Crashe Activity 7-8

Critical Path:

5-6,6-8,8-9

All Activites are Crashed

Activitie Crashed Weekes saved Project Duration Direct Cost Rs. Indirect Cost Rs. Total Cost Rs.
Nill 0 0
2-5 3 51 156,000 255000 410000
1-3 2 46 163333.33 180,000 188333.33
3-4 2 44 167333.33 220,000 387333.33
8-9 2 43 177333.33 392,2333.33 382333.33
5-7 3 51 19233.33 261166.39 447833.33
6-8 2 41 217833.33 402833.29 417833.29
7-8 6 40 251166.62 407833.29 441166.62