CRASHING

SUBMITTED BY NITISH KHATOR A034(CM)

Crashing
PURPOSE
The project manager is confronted with having to reduce the scheduled completion time of a project to meet a deadline. Project duration can often be reduced by assigning more labour to project activities, in the form of over time, and by assigning more resources, such as material, equipment, etc. However, the additional labour and resources increase the project cost. So, the decision to reduce the project duration must based on an analysis of the trade-off between time and cost. Project crashing is a method for shortening the project duration by reducing the time of one or more of the critical project activities to less than its normal activity time. The object crashing is to reduce project duration while minimizing the cost of crashing.

OBJECTIVE OF CRASHING
1. To reduce the scheduled completion time to reap the results of the project sooner. 2. As project continue over time, the team consume indirect costs. 3. There may be direct financial penalties for not completing a project on time.

KEY TERMS
CRASHING is reducing project time by expending additional resources. CRASH TIME is an amount of time an activity is reduced. CRASH COST is the cost of reducing activity.

GOAL
The goal of crashing is to reduce project duration at minimum cost. To reduce project duration while minimizing the cost of crashing, the project team should estimate require time, require the cost, crash time, crash cost for each activities. And then the team can estimate total crash time, total crash cost, the crash cost per week to reduce project duration at minimum cost.

COST ANALYSIS AND CRASHING THE NETWORK

PROJECT COST
Each activity of the project consumes some resources and hence has cost associated with it. In most of the cases cost of an activity will vary to some extent with the amount of time consumed by the activity. The cost of total project, which is the aggregate of the activity costs will also depend upon the project duration time. Thus by increasing the costs, the project duration can be cut down to some extent. The aim is always to strike a balance between the costs and time, and to obtain an optimum project schedule. An optimum project schedule implies lowest possible cost and the associated time for the project. The total cost of any project consists of the direct and indirect costs involved in its execution. Direct Cost The cost is directly dependent upon the amount of resources involved in the execution of the individual activities. This is the cost of the materials, equipment and labour required to perform the activity. If the activity is performed by a subcontractor, the price of the subcontract will be the activity direct cost. It can be seen from the direct cost-time relationship shown in Fig. that the activity duration can be varied by varying the cost. Point N, referred to as the 'Normal Point 27 corresponds to the normal activity time. If the duration is further increased, the decrease in cost is insignificant. As the activity is compressed, the direct cost goes on increasing. If it is compressed beyond C, the cost increases very rapidly for insignificant change in the activity duration. This point is called 'crash point'. Crash time is thus the minimum activity duration to which an activity can be compressed by increasing the resources and hence by increasing the direct cost. To make the calculations simple, the direct cost-time curve is approximated to either a single straight line or multi-straight lines (segments), as shown in Fig. The slope of the line (or a segment of line) gives the increase in direct cost per unit time for expediting the activity. This is called cost slope. For the straight line approximation,

Indirect Cost
Project indirect cost can further be sub-divided into two parts: fixed indirect cost and variable indirect cost. The fixed indirect cost is due to the general and administrative expenses, licence fee, insurance cost and taxes and does not depend upon the progress of the project. The variable indirect cost depends upon the time consumed by the project and consists of overhead expenditure, suppervision, interest on capital and depreciation, etc. It is assumed that the indirect cost increases linearly with time as shown in figure. The sum of the direct and indirect cost gives the total project cost. As the direct cost decreases with time and indirect cost increases with time, the total project cost curve will

have a point where the total cost will be minimum (Fig. ). The time corresponding to this point is called the optimum duration and the cost, the optimum cost.

EXAMPLE
Code Normal Duration Cost (days) (Rs.) Lay foundation and build walls 5 3,000 6 4 5 3 1,200 1,000 1,200 1,600 8,000 Job description Crash Duration Cost (days) (Rs.) 4 4,000 2 3 3 3 2,000 1,800 2,000 1,600

A B C D E

Tile roofing Instal electricity Instal plumbing Connect services to finish Total cost

First, the cost slope for each activity and the normal direct cost of the project is calculated. This is shown in the table below. is shown in the table below. Job Cost slope (Rs./ day) Next, the network is drawn and the critical path is determined. An activity (i - j) is critical only if E = L for its tail event, E = L for its head event and Ej Ei= Lj Li = tij. Critical path is shown in Fig. A (1-2) B (2-3) C (2-5) D (2-4) 400(3) E (5-6)

1,000(1) 200(4) 800(1)

(i) Critical path is 1-2-3-5-6. Normal duration = 14 days. Normal cost = Rs. (8,000 + 300 x 14) = Rs. 12,200. (ii) Represent the network on time-scaled diagram. This is shown in Fig. Activities along the critical path are arranged along the horizontal line 1-2-3-5-6. Early start times for the activities have been assumed. Dotted lines show the floats for the non-critical activities. Project length can be reduced by crashing the critical activities. This will involve extra directcost. While crashing a critical activity, it is possible that some associated non-critics activity (or activities) may also have to be crashed. If float is available no extra cost for such activity (or activities) will be involved; if not, the cost of crashing such activity (activities) will also be considered and the total cost will be calculated. Then the critical activity involving the least associated cost will be selected for crashing. While crashing a critical activity, only those non-critical activities will require crashing which start from the tail event of the critical activity under consideration or earlier and finish at the head event of the critical activity or later than that. This rule may be kept in mind while crashing the activities.

Crash activity B (2-3), C (2-5) and D (2-4) by one day each. it is crashed by one day. The various alternative critical activities and their crash costs are given in Table Activity A (1-2) B (2-3) C(2-5) D(2-4) E(5-6) Cost (Rs.) 1,000(1) 200(4) 800(1) 400(2) 0

Since activity 2-3 has the lower associated crash cost of Rs. 200 per day, Crash cost = Rs. 200, project duration = 13 days. The network is shown in Fig

Crash activities B, C and D by one day each. The various activities and their crash costs are given below. Activity A (1 -2) B (2-3) D (2-4) C (2-5) Total Cost (Rs) 1,000 200 400 Nil 600

Crash cost = Rs. (200 + 600) = Rs. 800, project duration = 12 days. The network is shown in Fig.

Crash activity A (1-2) by one day. The various activities and their crash costs are given below. Activity B (2-3) D (2-4) C (2-5) Total Cost (Rs) 200 400 800 1,400

Crash cost = Rs. (1,000 + 800) Rs. 1,800, project duration = 11 days. The network is shown in Fig. 9.20 Crash activities B, C and D by one day each. Crash cost = Rs. (1,400 + 1,800) = Rs. 3,200, project duration = 10 days.

Duration(days)

Normal direct cost (Rs.)

Crash cost Indirect cost (Rs) 0 200 800 1,800 3,200 (Rs) 4,200 3,900 12,400 3,300 3,000

Total cost (Rs) 12,200 12,100

14 13 12 11 10

8,000 8,000 8,000 8,000 8,000

13,100 14,200