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(project Crashing)

Time/cost trade-off analysis is the


compression of the project schedule to
achieve a more favorable outcome in terms
of project duration, cost, and projected
revenues
Objectives of time/cost trade-off analysis
Minimize total project costs
Compress project to an acceptable duration

Done by selectively crashing specific


activities to shorten project duration

You might think that total project costs


will increase when we begin to crash
activities
But, total project costs consist of both
indirect (project-based) costs (PBC) and
activity-based costs (ABC)
ABC goes up when we crash activities in an
effort to finish the project early
But, PBC (the indirect costs) goes down if we
finish the project early

Any activity that is on the critical path


Activities with relatively long durations
Bottleneck activities (that appear on
multiple critical paths)
Activities that relatively low cost to crash
Activities that are not likely to cause quality
problems if crashed
Activities that occur relatively early in the
schedule and are labor intensive

1.
2.

3.

4.
5.
6.

Estimate project-based (indirect) cost per unit


time
Identify critical activities that are good
candidates for crashing
Determine activity-based (direct) cost of
crashing selected activities vs. indirect cost
savings
Calculate crash cost per period = (crash cost
normal cost)/(Normal time crash time)
Select activities with minimum crash cost per
period to be crashed
Recalculate the forward pass and check for
changes in critical path

Reduced flexibility and less margin for error


increased risk of failure to complete
project on time
Raises potential for poor quality
Increases potential for staff burnout, stress,
and turnover
Raises activity-based costs
May negatively affect other projects

Crashing
reducing project time by expending additional
resources
Crash time
an amount of time an activity is reduced
Crash cost
cost of reducing activity time
Goal
reduce project duration at minimum cost

Crash
cost

Crashing activity
Slope = crash cost per unit time
Normal Activity

Normal
cost

Normal
time
Crash
time

Activity time
8

Crashing costs increase as project duration decreases


Indirect costs increase as project duration increases
Reduce project length as long as crashing costs are less than indirect
costs

Time-Cost Tradeoff
Min total cost =
optimal project
time

Total project cost


Indirect cost

Direct cost

time
9

The network and durations given below shows the normal


schedule for a project.
You can decrease (crash) the durations at an additional
expense.
The Table given below summarizes the time-cost
information for the activities.
The owner wants you to you to finish the project in 110
days.
Find the minimum possible cost for the project if you want
to finish it on 110 days. (Assume that for each activity there
is a single linear, continuous function between the crash
duration and normal duration points).

2
8

12

7
4

1
12

3
4

5
4

6
4

darla/smbs/vit

21

Activity Normal
time
1
12
2
8
3
4
4
12
5
4
6
4
7
4

Normal
cost Rs
3000
2000
4000
50000
500
500
1500
75000

Crash
time
7
5
3
9
1
1
3

Crash
cost Rs
5000
3500
7000
71000
1100
1100
22000
110700

Allowable
crash time
5
3
1
3
3
3
1

slope
400
500
3000
7000
200
200
7000

22

Project duration = 36

R7000

R500

2
8

R700

12

From..

7
4

1
12

R400

3
4

6
4

5
4

R3000

R200

R200
R7000

R500

2
8

To..

R700

12

7
4

Project
duration = 31
Additional cost =
R2000

R400

3
4

R3000

5
4

6
4
R200

R200
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