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    Reducing Project Duration

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    butolashreya35

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    © All Rights Reserved
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    Reducing Project Duration

    Uploaded by

    butolashreya35
    12 views22 pages

    Original Title

    bd18ae453b254bdea76a43fdf1cc5233

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    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    12 views22 pages

    Reducing Project Duration

    Uploaded by

    butolashreya35

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 22

    Reducing Project Duration

    PROJECT CRASHING
    Why reduce project completion time?

    Imagine the following scenarios:


     After finalizing your project schedule, you realize
    the estimated completion date is two months
    beyond what has been promised to the customer.
     Two months into the project, you realise that you
    are already three weeks behind the schedule.
     Four months into the project the top management
    changes its priorities and now tells you that
    money is not an issue. Complete the project
    ASAP!!
    Reducing Project Completion Time

     Project completion times may need to be reduced


    because:
     Different deadlines
     Penalty clause in contract
     Promised completion dates
     Customer requirements and contract commitment
     Time-to-market pressures
     Incentive contracts (bonuses for early completion)
     Unforeseen delays
     Overhead and goodwill costs
     Pressure to move resources to other projects
    Reducing Project Completion Time

     Crashing a project needs to balance


     Time by which to reduce the project duration

     Cost to reduce this duration

     Crashing a project requires you to know


     Crash time of each activity

     Crash cost of each activity


    Reducing Project Completion Time

     Time Is Money: Cost-Time Tradeoffs


     Reducing the time of an activity usually incurs additional
    direct costs.
     Cost-time solutions focus on reducing (crashing) activities on
    the critical path to reduce the overall duration of the project.
    Options for Accelerating Project Completion

     Adding Resources  Critical-Chain


     Outsourcing Project  Establishing a Core
    Work Project Team
     Scheduling Overtime
     Compromise Quality
     Reducing Project Scope
     Fast-Tracking ( part of
    next activity before
    preceding is fully over)
    Fast-Tracking

     Fast Tracking refers to overlapping the design and


    build phases of a project
     Because design is usually completed before
    construction starts, overlapping the two activities
    will result in shortening the project duration
    The Project Costs

     Project Indirect Costs


     Costs that cannot be associated with any particular work
    package or project activity.
     Supervision, administration, consultants, and interest
     Costs that vary (increase) with time.
     Reducing project time directly reduces indirect costs.
     Direct Costs
     Normal costs that can be assigned directly to a specific work
    package or project activity.
     Labor, materials, equipment, and subcontractors
     Crashing activities increases direct costs.
    How to Reduce Project Duration?

    Identifying direct costs to reduce project time

    Gather information about direct and indirect


    costs of specific project durations.

    Search critical activities for lowest direct-cost


    activities to shorten project duration.

    Compute total costs for specific durations and


    compare to benefits of reducing project time.
    • Crashing a project refers to reducing the total
    time to complete the project to meet a revised due
    date.
    • Crash time is the shortest possible time the
    activity can realistically be completed.
    • Crash cost is the total additional cost associated
    with completing an activity in its crash time rather
    than in its normal time.
    Crash cost per unit of time = crash slope =
    Crash Cost – Normal Cost
    Normal Time – Crash Time
    Project Cost—Duration Graph
    Constructing a Project Cost—Duration Graph

     Find total direct costs for selected project


    durations.
     Find total indirect costs for selected project
    durations.
     Sum direct and indirect costs for these selected
    project durations.
     Compare additional cost alternatives for benefits.
    Constructing a Project Cost—Duration Graph

     Determining Activities to Shorten


     Shorten the activities with the smallest increase in cost per
    unit of time.
     Assumptions:

     The cost relationship is linear.


     Normal time assumes low-cost, efficient methods to complete the
    activity.
     Crash time represents a limit—the greatest time reduction possible
    under realistic conditions.
     Slope represents a constant cost per unit of time.
     All time reductions occur within the normal and crash times.
    Activity Graph
    Cost—Duration Trade-off Example
    Cost—Duration Trade-off Example (cont’d)
    Cost—Duration Trade-off Example (cont’d)
    Cost—Duration Trade-off Example (cont’d)
    Cost—Duration Trade-off Example (cont’d)
    Summary Costs by Duration
    Project Cost—Duration Graph
    Key Terms

    Crash point
    Crash time
    Direct costs
    Fast-tracking
    Indirect costs
    Project cost–duration graph

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