Improving the productivity of existing project

resources

1) Changing the working method employed for the

activity

2) Compromise quality and/or reduce project scope

3) Fast-tracking by:
i. Shorten the longest critical activities
ii. Partially overlap activities
iii. Employ start-to-start lag relationships

4) Overtime

5) Adding resources to the project team

NC : Normal Cost
CC : Crash Cost
NT : Normal Time
CT : Crash Time
-----------------------------------------------------------
------
Days (Weeks) to be crashed = NT – CT
CC –
NC
Crashing Cost / Day or week (Slope) =
------------
NT -
CT
Example:
You are considering the decision of whether or not to crash your project. After asking your operations
manager to conduct an analysis, you have determined the “precrash” and “postcrash” activity durations and
costs, shown in the following table :
Normal
Crashed
Activity Pred Duration Cost
Duration Cost
A - 4 days $1,000
3 days $2,000
B - 5 days $2,500
3 days $5,000
C A 3 days $750
2 days $1,200
D B 7 days $3,500
5 days $5,000
E C 2 days $500
1 day $2,000
Solution:
1. Compute Days to be crashed and crashing cost per
day
Acivit Pred. Normal Norma Crash Crash Days Crashing
y time l Cost time Cost to be cost per
Duration Crashe Day
d (CC – NC)
NT-CT --------------
-
(NT – CT )

A - 4 days $ 1000 3 days $ 2000 1 $ 1000

B - 5 2500 3 5000 2 1250
C A 3 750 2 1200 1 450
D B 7 3500 5 5000 2 750
E C 2 500 1 2000 1 1500
F B,C 5 2000 4 3000 1 1000
G E 9 4500 7 6300 2 600
 2. Draw the A-O-N network diagram and find the critical
path

The critical path is A C E G 18

days
Acivit Pred. Normal Norma Crash Crash Days Crashing
y time l Cost time Cost to be cost per
Duration Crashe Day
d (CC – NC)
NT-CT --------------
-
(NT – CT )

A - 4 days $ 1000 3 days $ 2000 1 $ 1000

B - 5 2500 3 5000 2 1250
C A 3 750 2 1200 1 450
D B 7 3500 5 5000 2 750
E C 2 500 1 2000 1 1500
F B,C 5 2000 4 3000 1 1000
• Crash only the critical path activities. Why?
G E 9 4500 7 6300 2 600
Because only critical activities affect the project completion time.
• Crash critical activity with minimum crashing cost / day first

Be careful critical path may be change

during crashing
1. Crash C by 1 days, Crashing Cost = 1 X 450 = $ 450, critical path remains the same A C
E G 17 days
2. Crash G by 2 days, Crashing Cost = 2 X 600 = $ 1200, critical path remains the same A C
E G 15 days
3. Crash A by 1 days, Crashing cost = 1 X 1000= $ 1000, critical path remains the same A
C E G 14 days
4. Crash E by 1 days, Crashing Cost= 1 X 1500 = $ 1500, critical path remains the same A
CEG
IF the 13 days
Total project cost before crashing = Direct + Indirect = 14750 + 18x200 = 18350$
5. Stop
The Full Crashing
indirect cost is $ 200/day and the deadline is 13 days and any delay will cost a penalty
ofTotal crashing
$ 1500/ day. cost = $ 4150

The project manager should take the decision to crash the project. Why?
Total cost for 18 days project completion time will cost = total cost before crashing +
penalty =
18350 + (18-13) X 1500 = 18350 + 5 x 1500 = 18350 + 7500 = $ 25850

But the total cost after crashing = total cost before crashing + crashing cost – savings from
indirect cost =
18350 + 4150 – 5 X 200 = 22500 – 1000 = $ 21500
Cost savings = total project cost before crashing – total project cost after crashing = 25850
– 21500 = $ 4350

Because there is a cost saving +ve number so crash the project

 Copyright © 2010 Pearson Education, Inc.
Example 2 Publishing as Prentice Hall

What is the lowest cost to complete this project in 53 weeks? Times are in weeks
and costs in dollars.
Activity Pred Normal Crash Normal Crash
Time Time Cost Cost
A -- 14 9 500 1500
B A 5 2 1000 1600
C A 10 8 2000 2900
D B, C 8 5 1000 2500
E D 6 5 1600 1900
F D 9 6 1500 3000
G E, F 7 4 600 1800
H G 15 11 1600 3600
Solution Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall

Activity Pred Normal Crash Normal Crash Weeks Crash

Time Time Cost Cost to be cost per
crashed week
A -- 14 9 500 1500 5 200
B A 5 2 1000 1600 3 200
C A 10 8 2000 2900 2 450
D B, C 8 5 1000 2500 3 500
E D 6 5 1600 1900 1 300
F D 9 6 1500 3000 3 500
G E, F 7 4 600 1800 3 400
H G 15 11 1600 3600 4 500
The Critical Path is A C D F G H 63
Weeks
 The Critical Path is A C D F G H 63
Weeks
Activity Pred Normal Crash Normal Crash Weeks Crash
Time Time Cost Cost to be cost per
crashed week
A -- 14 9 500 1500 5 200
B A 5 2 1000 1600 3 200
C A 10 8 2000 2900 2 450
D B, C 8 5 1000 2500 3 500
E D 6 5 1600 1900 1 300
F D 9 6 1500 3000 3 500
G E, F 7 4 600 1800 3 400
H G 15 11 1600 3600 4 500
1. Crash A by 5 weeks, Crashing Cost = 5 X 200 = $ 1000, critical path remains the same A
C D F G H 58 weeks
2. Crash G by 3 weeks, Crashing Cost = 3 X 400 = $ 1200, critical path remains the same A C
D F G H 55 weeks
3. Crash C by 2 weeks, Crashing cost = 2 X 450 = $ 900, critical path remains the same A C
D F G H 53 weeks Stop Crashing
Total crashing cost = $ 3100
Example 3
There is an indirect cost of $ 200 / day and there is a penalty of $ 1000 per day
for every day delay after 18 days. Do you crash the project ? Why?
Activity Pred Normal Crash Normal Crash
Time Time Cost Cost
A -- 3 2 1000 1500
B A 2 1 1200 1800
C A 4 2 1000 1200
D B 5 3 2000 2600
E C,D 6 3 3000 3600
F C,D 8 6 1800 2200
G E, F 9 4 2200 3100
Activity Pred Normal Crash Normal Crash Days to be Crash cost
crashed per day
Time Time Cost Cost
A -- 3 2 1000 1500 1 500

B A 2 1 1200 1800 1 600

C A 4 2 1000 1200 2 100
D B 5 3 2000 2600
2 300
E C,D 6 3 3000 3600 3 200
F C,D 8 6 1800 2200
2 200
G E, F 9 4 2200 3100 5 180
Project cost before crashing = Direct cost + Indirect cost + penalty = 12200 + 27 x 200 + 9 x
1000
= 12200 + 5400 + 9000 = $ 26600
Crash G by 5 days, crashing cost = 5 x 180 = 900 ->
If we crash F by 2 days, crashing cost = 2 x 200 = 400 -> we will have 2 critical paths A B D F G
20 days and
A B D E G 20 days
Crash D by 2 day , crashing cost = 2 x 300 = 600, the critical path will be A B D F G 18 days or
A B D E G 18 days

Project cost after crashing = Direct + indirect + Penalty + crashing Cost

= 12200 + 18 x 200 + 0 + 1900 = 12200 + 3600 + 1900 = 17700

Cost Savings = Project cost before crashing – Project cost after crashing = 26600 – 17700 = $
8900
If we crash F by 2 days, crashing cost = 2 x 200 = 400 -> we will have 2 critical paths A B D F G
20 days and
A B D E G 20 days
Therefore, crashing B D E is not beneficial , we will find a common activity to crash such as A
So Crash A by 1 day , crashing cost = 1 x 500 = 500 the critical paths will remain the same A B
D F G 19 days or
A B D E G 19
days
The best scenario not to crash A
Now we need only 1 day to meet the deadline which is 18 days.
Crash D first by 2 days cost 600 but crashing then D
Crash D by 1 day , crashing cost = 1 x 300 = 300, the critical path will be A B D F G 18 days or
costs 800
A B D E G 18 days

Project cost after crashing = Direct + indirect + Penalty + crashing Cost

= 12200 + 18 x 200 + 0 + 1900 = 12200 + 3600 + 1900 = 17700

Cost Savings = Project cost before crashing – Project cost after crashing = 26600 – 17700 = $
8900