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Time Cost Trade Off Appendix A 30-5-08 F

time & cost

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9 views13 pages

Time Cost Trade Off Appendix A 30-5-08 F

time & cost

Uploaded by

karanraju0669
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Appendix A

TIME-COST TRADE-OFF
Step-by-step Procedure
1. Time analyse the network and determine the critical
path.
2. Tabulate Normal and Crash Time & Cost Data
3. Determine the rate of crashing of all the activities
4. Crash critical activities beginning with the activity
having the least rate of crashing
5. At each crashing, incorporate the cost implication in a
table.
6. Add direct cost, indirect cost and saving for early
completion, date-wise and tabulate their
commutative effect.
1. Time analyse the network and
determine the activity costs.
2. Tabulate Normal and Crash Time & Cost Data
The Assessed Crashed Costs and the Crashing Potential for a Project
Crashin
S. No. Activity Duration in Weeks Cost in $ g
Potential
Normal Crash Normal Crash in weeks
1 A 4 2 4000 7000 2
2 B 3 2 3000 4000 1
3 C 2 2 2000 2000 X
4 D 5 3 2000 5000 2
5 E 2 1 2000 4000 1
6 F 1 1 1000 1000 X
7 G 3 2 3000 8000 1
8 H 3 2 3000 5000 1
9 I 2 1 2000 3000 1
3. Determine the rate of
crashing of all the activities

Determination of the Rate of Crashing


Crashing Rate of Crashing
S. No. Activity
Potential in $
1 A 2 1500
2 B 1 1000
3 C X X
4 D 2 1500
5 E 1 2000
6 F X X
7 G 1 5000
8 H 1 2000
9 1 1 1000
4. Crash critical activities beginning
with the activity having the
least rate of crashing.

Lowest Rate of Crashing

Activity Crashing Potential Rate of Crashing in $

A 2 1500

B 1 1000
First crashing.
With the crashing by one week of Activity B, the cost of
the project increases by $1,000 and the revised project
duration works out to be 9 weeks.
Second crashing.
Scrutiny of the network after the first crashing reveals that
there are two critical paths. Further, reduction means that the
sum of the durations of the critical activities along each critical
path be reduced by one week. The total increase in the cost for
crashing the project duration from 10 weeks to 8 weeks is
$2,500, i.e. cost of crashing Activities A and B each by one
week.
Third crashing.
The number of critical paths increase after the second
crashing. The various ways of reducing the project time
during the third crashing are utilized and the revised
duration of the activities for 7 weeks completion time is
given in the network drawn below.
Determining Course of Action of Reducing Project Time During Third Crashing

Options Affected Activities Cost of Crashing in $

1 A&D 1500 + 1500 = 3000 1

2 E, G & J 2000 + 5000 + 1000 = 8000 2

3 E, G & H 2000 + 5000 + 2000 = 9000 3

4 A, E & G 1500 + 2000 + 5000 = 8500 4

5 D, G & J 1500 + 5000 + 1000 = 7500 5


Fourth crashing.
Proceeding similarly, it can be easily verified that
although all the activities are critical, there is still room
for crashing. It may be noted that after the fourth
crashing, although activities E and H can be reduced,
further crashing of all the critical paths is not possible.
Therefore, the fourth crashing becomes the final crashing.
5.At each crashing, incorporate the cost
implication in the table.

The network, after its fourth crashing, shows the


duration of the crashed activities and depicts the
network plan of the least cost of the project.

6.Add direct cost, indirect cost and saving for


early completion, date-wise and tabulate their
commutative effect.

Aggregate the cumulative effects of direct and


indirect costs and the savings for early completion.
Add direct cost, indirect cost and saving for early
completion, date-wise and tabulate their commutative effect.

Activity Reductio Rate of Crashing Cost Per Week


n Crashin
Possible g
Project Duration in Weeks No First Second Third Fourth
Crash Crash Crash Crash Crash
9 10 11 12 13
A 2 1500 1500 1500
B 1 1000 1000
C – – 1500 1500
D 2 1500
E 1 2000
F – –
G 1 5000 5000
H 1 2000
Add direct cost, indirect cost and saving for early
completion, date-wise and tabulate their commutative effect.

Activity Reductio Rate of Crashing Cost Per Week


n Crashin
Possible g
Project Duration in Weeks No First Second Third Fourth
Crash Crash Crash Crash Crash
Crashing cost 1000 1500 3000 7500
Cumulative crashing cost 1000 2500 5500 13000
Normal cost 22000 22000 22000 22000 22000
Indirect cost 5000 4500 4000 3500 3000
Total cost 27000 27500 28500 31000 38000
Gains for early completion 800 1600 2400 3200
Net financial effects 27000 26700 26900 28600 34800
Project duration in weeks 10 9 8 7 6
Time-Cost Trade-Off Function

Cost in 000'$
Minimum Project Cost =$26,700

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