Question

4. Given the data and information that follow, compute the total direct cost for each project duration. If the indirect costs for each project duration are $90 (15 time units), $70 (14), $50 (13), $40 (12), and $30 (11), compute the total project cost for each duration. What is the optimum cost-time schedule for the project? What is this cost? Act. Crash Cost (Slope) Maximum Crash Time Normal Time Normal Cost WNUNUNAW OWLOI- 100 60 200 200 $730 Initial project duration 15 Total direct cost $730

Answer 1

Step 1: Identify the alternative paths and Critical path. Critical path is the path of longest duration in the network 14 A-C-F-I A-D-G- 15 Critical path 13 В-Е-Н-1 Normal Time Total Direct Cost 15 730 Step 2: Project Crashing using least cost method 1.Identify and list the various alternative paths through the network and their respective duration. 2. Determine Max crash time (=Normal time - Crash time) and Crash cost per unit time -(Crash cost - Normal cost)/Max Crash Time for each activity. Also determine whether the crash cost rate remains constant as the activity is crashed, or it changes. Determine the variable crash costs by time, if they are variable. 3. Determine the critical path, i.e. the path of longest duration. Only activities along the critical path need to be crashed. 4. Identify the eligible activity on the critical path having the least crash cost per unit time. and reduce by 1 time unit at a time. See if the critical path changes as the activities along the critical path are crashed 5. If there are multiple critical paths at any stage during the crashing. Then determine whether there is any of the activites common to the critical paths. Then calculate whether the crash cost of common activity is less than the combined crash costs of the least cost crash cost activities along the critical paths 6. Continue crashing as long as the total benefit of crashing is more than the cost of crashing, if the objective is to minimize cost. Or continue crashing, if all the activities of the critical path are fully crashed, if the objective is to minimize project duration, irrespective of cost. Activity Crash Path 1 Path 2 Path 3 Project Activity Crash Cost Crash Cost Direct Cost Cumulative Total Indirect TOTAL Iteration Crashed Time Duration Cost A-C-F-I A-D-G-I B-E-H-I COST 730 90 14 15 13 15 820 D 740 1 14 14 13 14 10 10 70 810 770 50 820 13 13 13 13 30 40 50 800 13 12 1 13 30 70 850 4 60 1 13 17 1 13 30 860 50 910 40 1 12 12 230 960 1.000 12 1: 100 11 11 11 11 200 430 1,160 30 1,190

Duration	Direct Cost	Indirect Cost	Total Cost
11	730	30	760
12	740	40	780
13	770	50	820
14	960	70	1030
15	1160	90	1250