FIGURE 12-16. CPM network.

To determine crashing costs we begin with the lowest weekly crashing cost, activity A, at $2,000 per week. Although activity C has a lower crashing cost, it is not on the critical path. Only critical path activities are considered for crashing. Activity A will be the first to be crashed for a maximum of two weeks at $2,000 per week. The next activity to be considered would be F at $3,000 per week for a maximum of three weeks. These crashing costs are additional expenses above the normal estimates.

A word of caution concerning the selection and order of the activities that are to crash: There is a good possibility that as each activity is crashed, a new critical path will be developed. This new path may or may not include those elements that were bypassed because they were not on the original critical path.

Returning to Figure 12-16 (and assuming that no new critical paths are developed), activities A, F, E, and B would be crashed in that order. The crashing cost would then be an increase of $37,500 from the base of $120,000 to $157,500. The corresponding time would then be reduced from twenty-three weeks to fifteen weeks. This is shown in Figure 12-17 to illustrate how a trade-off between time and cost can be obtained. Also shown in Figure 12-17 is the increased cost of crashing elements not on the critical path. Crashing these elements would result in a cost increase of $7,500 without reducing the

FIGURE 12-17. CPM crashing costs.

total project time. There is also the possibility that this figure will represent unrealistic conditions because sufficient resources are not or cannot be made available for the crashing period.

The purpose behind balancing time and cost is to avoid wasting resources. If the direct and indirect costs can be accurately obtained, then a region of feasible budgets can be found, bounded by the early-start (crash) and late-start (or normal) activities. This is shown in Figure 12-18.

Since the direct and indirect costs are not necessarily expressible as linear functions, time-cost trade-off relationships are made by searching for the lowest possible total cost (i.e., direct and indirect) that likewise satisfies the region of feasible budgets. This method is shown in Figure 12-19.

Like PERT, CPM also contains the concept of slack time, the maximum amount of time that a job may be delayed beyond its early start without delaying the project completion time. Figure 12-20 shows a typical representation of slack time using a CPM chart. In addition, the figure shows how target activity costs can be identified. Figure 12-20 can be modified to include normal and crash times as well as normal and crash costs. In this case, the cost box in the figure would contain two numbers: The first number would be the normal cost, and the second would be the crash cost. These numbers might also appear as running totals.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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