3

CHAPTER THREE

Project Management: Project Crashing

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Problem
A project that your company has undertaken has the following activities, which are listed below:
Activity A B C D E F G H J Preceding Activity A C B, C D, E F E, G H Normal time (weeks) 4 6 5 8 10 8 9 5 3 Normal cost ($) 4000 6000 4000 3000 1500 6000 2000 6000 3000 Crash time (weeks) 2 5 4 7 7 Crash cost ($) 6000 6500 7800 3600 6000 -

The normal costs shown for each activity are the costs to complete each activity by working under normal conditions. The crash time represents the shortest time in which the activity can be completed given the use of costly methods of completion. Assume that it is possible to reduce the normal time to crash time in steps of one week and that the extra cost will be proportional to the time saved. In addition, there is a site cost of $1,500 per week.
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Determine the minimum cost of undertaking this project and state its associated time of completion 1. Compute the crash cost per time period. (Crash cost Normal cost) Crash cost per period = (Normal time Crash time) Act CC
Max

A
1000

B
500

C
-

D
1200

E
700

F
-

G
2000

H
-

J
-

2. Using normal activity times, find the critical path and identify the critical activities.
33

Network Diagram
0 0 0
Start

4 4

4 4

9 9

9 11

17 19

4 0 B

0 0 3

6 9

9 9

19 19

19 19

27 27

27 27

36 36

10

8 H

9 J

Critical path: A-C-E-F-G-H-J Project Duration = 44 weeks Total cost = $35,500+(44x1500) = $101,500

36 36

41 41

41 41

44 44

34

Network Diagram - Crashing

A 0 1000 4 0 2 4 4 0 B 0 500 6 3 1 9 6 E 9 700 19 9 3 19 10 F 19 8 H 36 5 G 27 2000 36 27 2 36 9 J 41 3 4 4 C 5 9 9 D 9 1200 17 11
4

Start

19

OBJECTIVE minimize total cost

19

27 27

One critical path min. crash cost per week on this critical path $700 (activity E) then crash activity E by 2 weeks why 2 weeks?

36

41 41

41

44 44

35

Network Diagram - Crashing

A 0 1000 4 0 2 4 4 0 B 0 500 6 3 1 9 6 E 9 700 17 9 1 17 8 F 17 8 H 34 5 G 25 2000 34 25 2 34 9 J 39 3 4 4 C 5 9 9 D 9 1200 17 9
4

Start

17

Duration: 42 New Total Cost = 101500+(700x2) (2x1500) = $99,900

17

25 25

Now two critical paths: ACDFGHJ & ACEFGHJ min. crash cost per week for both paths $1000 (activity A) then crash activity A by 2 weeks.

34

39 39

39

42 42

36

Network Diagram - Crashing

A 0 1000 2 0 0 2 2 0 B 0 500 6 1 1 7 6 E 7 700 15 7 1 15 8 F 15 8 H 32 5 G 23 2000 32 23 2 32 9 J 37 3 2 2 C 5 7 7 D 7 1200 15 7
4

Start

15

Duration: 40 New Total Cost = 99,900+(1000x2) (2x1500) = $98,900

15

23 23

Two critical paths: ACDFGHJ & ACEFGHJ STOP since min. crash cost per week for both paths ($1200+$700) (D & E) greater than $1500 site cost.

32

37 37

37

40 40

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