Cbmec 1 M6 Mon
Cbmec 1 M6 Mon
Cbmec 1 M6 Mon
MODULE 6
Monday
o Example 1
A project can often be completed earlier than scheduled by hiring
more workers or running extra shifts or using additional equipment.
Such actions could be advantageous if savings or additional
revenues accrue from completing the project early.
There are three areas to examine.
You should first see whether any task has enough float to
allow it to be delayed until resources become available.
Source: Neha Tikko, Neha (Editor). Production and Operations Management. Excel Books Private
Limited.
https://ebooks.lpude.in/Management/Bba/Term_4/Dmgt206_Production_And_Operations_Manageme
nt.Pdf
You should also ask whether you can reduce scope, change
the time limit, or reduce performance.
Usually performance is not negotiable, but the other areas may be.
o Example 2
Sometimes you can reduce scope, and the project deliverable will
still be acceptable to the client.
Cost to Crash
Total project costs are constituted of direct costs, indirect costs, and penalty
costs.
o The sum of these costs is the total project cost.
o These costs depend on activity times and project completion time.
Direct costs
o Direct costs include labor, materials, equipment and any other costs
directly related to project activities.
Indirect costs
o Indirect costs include administration, depreciation, financial costs, and
other variable overheads.
o Indirect costs can be avoided by reducing total project time.
The shorter the duration of the project, the lower will be the indirect costs.
o Penalty clauses are often part of project contracts if the project extends
beyond some specific date.
o Sometimes a bonus may be provided for early completion.
o Some activities can be expedited to reduce overall project completion time
and total project costs.
Normal Activity Time-Cost-Point
It is the lowest point on a time-cost graph and represents the absolute minimum
cost for accomplishing the activity in normal time.
o Normal time is the shortest time to perform the activity within the
constraint of minimum direct cost.
Feasible Activity Time-Cost Trade-Off Points
It represents the various combinations of minimum direct costs and their
corresponding least timings for one individual activity only.
Source: Neha Tikko, Neha (Editor). Production and Operations Management. Excel Books Private
Limited.
https://ebooks.lpude.in/Management/Bba/Term_4/Dmgt206_Production_And_Operations_Manageme
nt.Pdf
o There can be few or several of these points and they can be best
represented on a graph showing cost versus timings:
The project duration is too long.
The customer wants to know the additional costs for saving part of
the project completion time.
The company may like to minimize the sum of direct and indict
project costs without disturbing the stipulated duration time.
Source: Neha Tikko, Neha (Editor). Production and Operations Management. Excel Books Private
Limited.
https://ebooks.lpude.in/Management/Bba/Term_4/Dmgt206_Production_And_Operations_Manageme
nt.Pdf
o People doing the work will find it much easier to see when they are
supposed to start and finish their jobs if you give them a bar chart
compared to the arrow diagram.
Source: Neha Tikko, Neha (Editor). Production and Operations Management. Excel Books Private
Limited.
https://ebooks.lpude.in/Management/Bba/Term_4/Dmgt206_Production_And_Operations_Manageme
nt.Pdf