10 Figure 9-2: CPM cost-duration history.

steeper the more the project duration is reduced, it becomes increasingly costly to squeeze additional time out of the project. Economists will recognize that attempts to expedite a project are subject to decreasing marginal returns.

Charts such as the one shown in Figure 9-2 are useful to the PM in exercising control over project duration and cost. They are particularly helpful in dealing with senior managers who may argue for early project completion dates with little understanding of the costs involved. Similarly, such data are of great benefit when clients plead for early delivery. If the client is willing to pay the cost of crashing, or if the firm is willing to subsidize the client, the PM can afford to listen with a sympathetic ear. (While we advise the PM to ignore overhead cost over which he/she has no control, it should be noted that indirect costs are often altered when a project is crashed.)

Some organizations have more than one level of crashing. Table 9-3 illustrates such a case. In this example, the firm has two distinct levels of expediting a project, rush and blitz. The differences in the precedence relationships between tasks are noted in the table, as are differences in resource commitments. The last two rows of the table show the expected changes in cost and time if the project is expedited.

Finally, if a project has a penalty clause that makes the organization liable for late delivery, the cost/duration trade-off curve contains the information the PM needs to know in order to determine whether crashing the project or paying the penalty is the more economic course of action.

A shortcoming of the scheduling procedures covered in the previous chapter is that they do not address the issues of resource utilization and availability. They focus on time rather than physical resources. Also, in the discussion that follows it will not

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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