lec10 crashing
TRANSCRIPT
CHAPTER 5: SCHEDULE COMPRESSION AND TIME-COST TRADE OFF
WHAT IS NETWORK COMPRESSION (CRASHING)?Crashing a project means shortening the normal duration of
the project schedule.
WHY CRASHING A PROJECT?There are many reasons for crashing a project:1- to avoid late penalties.2- to take advantages of monetary incentives for early
completion of a project.3- to beat the competition
OPTIONS TO ACCELERATE ACTIVITIES Improving productivity of existing resources Changing the working methods employed by
altering technology and types of resources
The most common method is increasing project resources. There are 2 approaches:
Adding number of resources Working longer: overtime & weekends
COST SLOPE = CRASH COST - NORMAL COST NORMAL TIME - CRASH TIME
COST SLOPE = CRASH COST - NORMAL COST
NORMAL TIME - CRASH TIME
NOTE Because the line shows the slope
between the normal and crash points, it is also understood that a project activity can be speeded up to some degree less than the complete crash point, relative to the slope of the crash line.
In analyzing crash options for project activities, the goal is to find the point at which time and cost trade-offs are optimized
Example1:Figure below shows a simple activity network model for a project
composed of three activities A,B, and C. project duration equals 30 days. What will be the cost to fully crash all activities
Activity Immediate predecessors
Normal time
Crash time
Cost per day to crash
ABC
------B
121020
3410
$100 300 200
1
3
4
A
B C
EXAMPLE1 CONTINUED
Act Cn Tn Tc Nb of days
Cost to crash
Cc
A $1100 12 3 9 $100/ day
= (9*100)+ 1100=$2000
B $3200 10 4 6 $300/day
= (6*300)+ 3200=$5000
C $2000 20 10 10 $200/day
= (10*200)+2000=$4000
The basic procedure for crashing a network is to crash activities along the critical path. Thus, activities on the critical path are potential candidates for crashing, because shortening non-critical activities would not have an impact on total project duration
From an economic standpoint, activities should be crashed according to crashing costs: crash those with the lowest crash costs first (having the flattest cost slope)
In order to make a rational decision on which activities, if any, to crash and on the extent of crashing desirable, a manager needs certain information:
1. Regular time and crash time estimates for each activity
2. Regular cost and crash cost estimates for each activity3. A list of activities that are on the critical path.
EXAMPLE 2 Suppose we have a project with only
eight activities, as illustrated in Table 1 which shows normal activity durations and costs and crashed durations and their costs.
We wish to determine which activities are the optimal candidates for crashing.
TABLE 1PROJECT ACTIVITIES AND COSTS
Normal Crashed
Activity Duration Cost Duration Cost
A 5 days $ 1,000 3 days $ 1,500
B 7 days 700 6 days 1,000
C 3 days 2,500 2 days 4,000
D 5 days 1,500 5 days 1,500
E 9 days 3,750 6 days 9,000
F 4 days 1,600 3 days 2,500
G 6 days 2,400 4 days 3,000
H 8 days 9,000 5 days 15,000
Total costs $22,450 $37,500
EXAMPLE 2 Normal Crashed cost slopeAct Duration Cost Duration CostA 5 days $ 1,000 3 days $ 1,500 $250/ dayB 7 days 700 6 days 1,000 300 C 3 days 2,500 2 days 4,000 1500D 5 days 1,500 5 days 1,500 ---E 9 days 3,750 6 days 9,000 1750F 4 days 1,600 3 days 2,500 900G 6 days 2,400 4 days 3,000 300H 8 days 9,000 5 days 15,000 2000
Total costs = $22,450
The calculations suggest that the least expensive activities to crash would be first, activity A ($250/day),
followed by activities B and G ($300/day). On the other hand, the project would incur
the greatest cost increases through crashing activities H, E, and C ($2,000/day, $1,750/day, and $1,500/day, respectively).
Note that in this example, we are assuming that activity D cannot be shortened, so no crashing cost can be calculated for it.
A-D-E-H= 27 DAYS
B,7 F,4
A,5 C,3 E,9
D,5 G,6
H,8
CHOOSE TO CRASH CRITICAL ACTIVITIESActivity Cost slope (per day) Critical
Path? A $ 250
Yes B 300
No C 1,500
No D —
Yes E 1,750
Yes F 900
No G 300
No H 2,000
Yes
Crashing activity A (lowest at $250) by 1 day will increase the project budget from $22,450 to $22,700. Fully crashing activity A will shorten the project duration to 25 days while increasing the cost to $22,950.
Activities B and G are the next candidates for crashing at $300 per day each.
Neither activity is on the project’s critical path, however, so the overall benefit to the project from shortening these activities may be minimal
The per unit cost to crash E is $1,750, and the cost to crash H is higher ($2,000). Thus, crashing activity E by 1 day will increase the project budget from $22,950 to $24,700
NORMAL COST= $22,450 @ 27 DAYS
Project Duration Costs crashed activity
27 days $22,450 none 26 days 22,700 A by
1 day 25 days 22,950 A by
1 day 24 days 24,700 E by
1 day 23 days 26,450 E by
1 day 22 days 28,200 E by
1 day 21 days 30,200 H by
1 day 20 days 32,200 H by
1 day 19 days 34,200 H by
1 day
Relationship Between Cost and Days Saved in a Crashed Project
At each stage of the network compression calculations, a logical analysis must be made in accordance with the following rules:
1. List the activities on the critical path.2. Delete those with zero potential for compression; these will
include activities whose normal and crash durations are identical, as well as those already fully crashed in previous stages.
3. Select the activity with the lowest crash cost since it will give the cheapest compression.
4. Determine the amount by which this activity can be crashed and its relevant cost.
5. Determine if any network limitations to this compression exist and the reasons for their existence
6. Carry out the compression within the limitations imposed7. Compute the new project duration and the corresponding project
cost