Maintenance Management

• Modern maintenance management is not to

repair broken equipment rapidly. Modern
maintenance management is to keep the
equipment running at high capacity and produce
quality products at lowest cost possible.
• Maintenance is a set of organized activities that
are carried out in order to keep the item in its
best operational condition with minimum cost
required.
METHODS OF CALCULATING DEPRECIATION

1. STRAIGHT LINE METHOD

This method assumes that loss of value of machine is directly proportional to its age. ie, the scrap value
have to be deduct from the original value and divide the remaining value by the number of useful life.

Let C be the initial cost of a machine

S be the scrap value

N be the number of years of life of machine

And D be the depreciation amount per year

C −S
Rs
Then D = N

This method of calculating depreciation fund is known as “Fixed instalment” method, because every
year same amount is deducted and no consideration is made about the maintenance and repair charges
which gradually increase as machine get older.

2. DIMINISHING BALANCE METHOD

This also called “Reduce Balance” Method. The diminishing value of machine is much greater in the early
years. It depreciates rapidly in the early years and later slowly. Thus it is better to depreciate much
during the early years, when the repair and renewal are not costly.

In this method book value of machine goes on decreasing. A certain percentage of the current book
value is taken as depreciation. This method is so called “Percentage on Book Value”

Let x be the fixed percentage taken to calculate the yearly depreciation on the book value

1/ n
S
x = 1−  
Then C

C = initial cost , S = scrap value, N = no. of years

3. SINKING FUND METHOD

In this method a depreciation fund equal to the actual loss in the value of the asset or machine is
estimated taking into account the interest on the accumulated fund. The rate of depreciation will be
constant though out the life of the machine

D = Rate of Depreciation per year

R = Rate of interest on the accumulated fund

C = Total cost of machine

S = Scrap value

R(C − S)

N = No. of years of life of machine D= (1 + R ) N − 1

2. THE ANNUITY CHARGING METHOD

3. In this interest is charged on the cost of machine or assets every year on the book
value but the rate of depreciation is constant every year.

C = Cost of machine

S = Scrap value

N = No. of years of machine life

R = Rate of interest

D = Rate of depreciation

If Book value after one year is C,

Then D = CR + C- C1 = C(1+R) – C1

Book value after two years is C2

Then D = C1R+ C1 – C2 = C1(1+R) – C2

The standard formula is

( C (1 + R ) − S) (1 − (1 + R ))
N

D=
(1 − (1 + R ) )
N

5. THE INSURANC E POLICY METHOD

In this method the machine is insured with the insurance company and premiums are paid on
the insurance policy. When the policy matures, the company provides sufficient sum to replace the
machine.

6. REVALUATION OR REGULAR VALUATION METHOD

In this every year the value of machine is revalued and the difference between the book value and the
revalued value is charged as a depreciation fund.
7. MACHINE – HOUR BASIS METHOD

In this depreciation is calculated, considering the total number of hours a machine runs in a year and
therefore a work chart of every machine is maintained to know the total number of hours the machine
runs in a year.

8. SUM OF YEARS DIGIT METHOD

Greater amount of depreciation is made during the early years and it goes on decreasing as the life of
machine decreases. For calculating depreciation the net amount (total cost – scrap value) is spread over
whole life in decreasing proportion.
 OBJECTIVES
ØTo increase functional reliability of production
facilities.
Ø To enable desired quality through correctly
adjusted, serviced and operated equipment's.
Ø To maximize the useful life of equipment's.
Ø To minimize cost of production.
ØTo minimize frequency of interruptions.
ØTo enhance the safety of manpower.
 Impact of Poor Maintenance
• Production capacity:
• Production costs:
• Product and service quality:
• Employee or customer safety:
• Customer satisfaction:
Areas of maintenance management
Ø Civil Maintenance
Ø Mechanical maintenance
Ø Electrical Maintenance
 Planned Maintenance-

In planned maintenance the maintenance action

is carried out with some fore thoughts, prior
planning , record keeping and control action.
These can be further classified as :-
— Preventive maintenance
— Corrective maintenance
— Predictive maintenance
 A: Preventive maintenance
— It is based upon the principle that ‘prevention is better than
cure’.
— Involves performing maintenance activities before the
equipment fails.
— It is a set of activities that are performed on plant equipment,
machinery, and systems before the occurrence of a failure in
order to protect them and to prevent or eliminate any
degradation in their operating conditions.
— Or the maintenance carried out at predetermined intervals or
according to prescribed criteria and intended to reduce the
probability of failure or the degradation of the functioning
and the effects limited.
— It has three types
— Running maintenance
— Scheduled maintenance
— Shut down maintenance
 B: Corrective maintenance
— In this type, actions such as repair, replacement, or restore will be
carried out after the occurrence of a failure in order to eliminate the
source of this failure or reduce the frequency of its occurrence.
— It also include the different types of actions like
typical adjustment of redesign equipment.
— The difference between corrective maintenance and
preventive maintenance is that for the corrective
maintenance, the failure should occur before any
corrective action is taken.
— It is of two types
1. Breakdown maintenance
2. Shutdown maintenance
 Cont..
Breakdown maintenance
— It is an emergency based policy in which the plant
or equipment is operated until it fails and then it
is brought back into running condition by repair.
— The maintenance staff locate any mechanical,
electrical or any other fault to correct it
immediately.
Shutdown maintenance
• That can only be performed when the
equipment, machine, or plant has been put out
of service.
 cont
C: Predictive maintenance:
• As the names implies it involves the prediction of
the failure before it occurs, identifying the root
cause for those failures symptoms and
eliminating those causes before they result in
extensive damage of the equipment.
• Type of maintenance performed continuously or
at intervals according to the requirements to
diagnose and monitor a condition or system.
 2: Unplanned Maintenance:
• Maintenance action which is carried out without
any fore thoughts or prior planning is called
unplanned maintenance.
• Emergency maintenance is one of the example of
unplanned maintenance.
• In this type of maintenance the maintenance
action is executed with the help of all available
maintenance resources in least possible time,
without any major time lag.
• Examples are gas leakage in chemical plant, fire
hazards, breakdown of boiler, turbine etc.
 In most of the planning, scheduling and controlling the project, the network analysis is
used. Thus the main objective of network planning are:-

(a) To complete the project within the stipulated period

(b) To optimise resources utilization

(c) To establish better coordination in interdependent activities

P.E.R.T. (Programme Evaluation & Review Techniques) and C.P.M (critical path method) are
two methodologies to analyse the network.

P.E.R.T. PERT was first used in 1957 as a method of planning and controlling the Polaris
Missiles programme by Booz, Allen and Hamilton together with U.S. Naval department. The
aim was to finish the project two years in advance. It is very important in the field of project
management. It is commonly employed for conducting the initial review of a project. It is a
useful device for planning the time and resources. PERT helps in decision making.

After its becoming public property in 1959, producers also thought it to use to its
advantage that has disciplined approach to planning, scheduling, controlling and monitoring the
progress of variety of projects.

It is based on the assumption that operation time cannot be estimated accurately, because
the various uncertainties involved in the working, To take these uncertainties into account, the
P.E.R.T. uses the following three time estimates.

(i) Optimistic time (to) (ii) Pessimistic time (tp)

(iii) Most likely time (tm)

etwork Analysis

Event:

Is a particular instant in time showing the end or beginning of an activity. It is a point of

accomplishment or decision. An activity is bounded by two events. The normal symbol used to
represent an event on the network is a circle, but for some specific events other shapes can also
be employed.
 Events are generally represented by circles with event numbers written inside as
represented above.

For numbering the rules devised by D.R. Flukerson is generally adopted.

(a) An initial event is one which has arrows coming out of it and none entering it. In any
network there will be only one such event.

(b) Delete all arrows emerging from 1. This will create at least one more initial event.

(c) Number these new initial events as 2,3........

(d) Delete all emerging arrows from these numbered events which will create new initial
events.

(e) Follow step (c)

(f) Continue until the last event is obtained which has no arrows emerging from it.

(i) All events must be numbered

(ii) Same number cannot be used for more than one event. This is necessary for identifying
each activity.

(iii) Event cannot be numbered is any order but usually forward numbering system is more
familiar.

Activity- Represents efforts applied over a period of tine which has definite beginning and
end. They are generally represented by arrows with description and time estimates written along.

The direction of the arrow indicates nearly the sequence in which the event occurs.

Network Logic- A network is basically a representation of a number of activities with their

inter-relationship while the program is under execution, it is necessary to review the progress
from time to time. The basic rules to be followed are:-

Activity arrows should be drawn from left to right indicating progressive approach towards the
ultimate objective or the final event.

Crossing of arrows should be avoided and they should be drawn as straight times as far as
possible.

etwork Rules
(a) The length of the arrow bears no relationship to the time which the activity takes or the
resources which the activity consumer.

(b) The arrow identifies the logical conditions of dependency.

(c) The direction of the arrow indicates the direction of workflow. The normal convention is
from left to right.

(d) No event can be reached in a project before the activity which immediately precedes it is
completed, similarly no activity can be started until the event which immediately precedes
it has been reached.

(e) Every activity in the network should be completed to reach the objective or the end event.

(f) No set of activities can form a circular loop.

Activity on the arrow system (AOA)

b) Activity on the mode system (AON)

I. Draw a network for the simple project work of erection of steel works for a shed.

Description Prerequisites

A Erect site workshop –

B Fence the site –

C Bend reinforcement A

D Dig foundation B

E Fabricate steel work A,C

F Install concrete plant B

G Place reinforcement C,D

H Concrete foundation G,F

I Paint steel work E

J Erect steel work H,I

K Give finishing touch J

2. In a program consisting of eleven activities the constraint determined are as under. Draw
the network.

A→ B A→ C A→ D

B→ E C→ F C→ G

D→ H E→ I F→ J

G→ K H→ K I→ L

J→ L K→ L

Analysis of Network and computation of time estimates

Analysis of network calculate the following.

(i) Earliest and latest dates for events

(ii) Amount of slack time available on events

(iii) Earliest and latest start and earliest and latest finish dates

(iv) Amount of float time available on activities

(v) Critical path

(a) Earliest start time (EST) or Earliest Occurrence time (EOT)

It is the earliest possible time at which an event or activity can occur or start after
completing all its preceding activities.

(b) Earliest finish time (EFT)

It is the earliest possible time by which an activity is finished EFT = EST + Activity time

(c) Latest Occurrence time/Latest start time (LST or LOT)

It is the latest time by which an event can start without affecting the total project
completion time.

LST = LFT – activity time

(d) Latest Finish time (LFT)

 It is the latest time by which on activity is completed without affecting the total project
completion time.

Float
It denotes the flexibility range within which the start time or finis time of an activity can
fluctuate. The time by which delay of its execution is possible is known as activity float or slack.
There are different types of floats as follows:

(a) Total Float (TF)

It is the difference between LFT and EST of an activity. Generally we observe that actual
time required is less than the maximum time available for completion of project. This difference
or allowance is total float.

(b) Free float

It is the time by which the completion of an activity can be delayed beyond the earliest
finish time (EFT) without affecting the earliest start of a subsequent activity.

(EST)i–j = EOTi (LST)i–j = (LOT)j –ti–j

(EFT)i–j = EOTi + t i–j (LFT)i–j = (LOT)j

TF = [(LOT)j–(EOT)i]–ti–j

FF i–j = [(EOT)j–(EOT)i]–ti–j (EST of fail event – EST of head event – dum)

IFi–j = [(EOT)j–(LOT)i]–t i–j (EST of fail event – LFT of head event – dum)

(c) Independent float

It is the amount of time by which the start of an activity can be delayed without affecting
earliest start time of any immediately following activities assuming that the preceding activity
has finished at its latest finish time.

If the value of I.F. is negative, it is taken as zero for all practical purposes.

(d) Interfering float

It is the difference between total float and free float.

If all the above mentioned four floats of each activity lying on a path are zero that path is
confirmed as critical path, represented by double lines.
Slack of an event = (LFT – EST) of that event

If the minimum value of slack is zero, such event is known as critical event. The path
joining the critical events is critical path.

PERT (Programme Evaluation & Review Technique)

In critical path method, we assumed deterministic estimates for time durations of various
activities in a project. But in reality, activity durations may be probabilistic. Hence, probabilistic
considerations are incorporated while obtaining time durations of the activities in a project. The
following time estimates are used:

to optimistic time; tm-most likely time; tp pessimistic time

The optimistic time is a time estimate of execution goes extremely good. The pessimistic
time is a estimate if execution is normal.

Frequency Distribution of Time of Completion of an activity

Consider an activity which is repeated several times, its time of completion is noted down
every time. A curve drawn between time of completion of activity, taking it on X-axis, and
frequency of its occurrence, taken on Y-axis, is called frequency distribution of time of
completion. This type of distribution is called Beta distribution curve. Standard deviation of this
distribution can be determined by using a property of normal distribution that is “approximately
99.73% of all values lie within ±3σ limits from the mean of the distribution.” A normal
distribution becomes a Beta distribution if it is showed towards left or right. The difference
between the two extreme values of Beta distribution is divided by 6 (3 σ on either side), its
standard deviation can be known to us. These two extreme values are ‘to’ and ‘tp’.

2
t p – to  tp − to 
σ= 2
varinance (σ) =  
6  6 

Expected time of an activity

Beta distribution of frequency of occurrence time of completion of an activity has

identified three time estimates. By combining these three estimates the average time taken to
complete an activity can be determined. This average time is called expected time of completion
of an activity (te).

Probable positions of occurrence of most likely time in a Beta distribution are two at tm1
and tm2, however the positions of occurrence of to and tp are one each. The expected activity time
is calculated as the weighted average of all three time estimates, Mid point of Beta distribution is
given half weight age as compared to the points corresponding to most likely time.

to + tp
Mid point of Beta distribution =
2

to + tp
+ tm + tm
Expected time = ( te ) = 2
3

 tp + 4 tm + to 
= 
 6 

Similarities between C.P.M. & P.E.R.T.

(1) Both methodologies are used for project planning and project scheduling by developing
and analyzing the network diagram of activities obtained by splitting a project into smaller
tasks.

(2) Rules for drawing network diagram for both are same

(3) Critical path is found in both cases

(4) Time and cost estimation is done in both cases.

Difference between C.P.M. & P.E.R.T.

(1) C.P.M. is activity oriented (1) PER is event oriented

(2) It is deterministic approach (2) It is probabilistic approach

(3) Crashing of activity is possible

to reduce the project completion time

(4) Find the critical path and project duration of the given project. Also determine EST, EFT,
LST, LFT along with TF, FF, IF, and interfering float in a tabular form.
 Time
Activity EST EFT LST LFT TF FF IF INTF
(days)

L 3 0 3 0 3 0 0 0

M 4 0 4 8 12 8 8 8

N 9 3 12 3 12 0 0 0

O 3 3 6 12 15 9 0 9

P 3 6 9 15 18 9 9 0

Q 6 12 18 12 18 0 0 0

R 4 12 16 12 16 0 0 0

S 2 16 18 16 18 0 0 0

T 5 16 21 19 24 3 3 0

U 6 18 24 18 24 0 0 0

(5) A small maintenance project consists of the following 10 jobs, whose precedence
relationships are identified by their code numbers.

Job Initial code Final code Duration (days)

A 1 2 4
B 2 3 6
C 2 4 10
D 3 5 8
E 3 6 2
F 4 6 12
G 4 7 4
H 5 8 16
I 6 8 14
J 7 8 8
(3) The activity details and their predecessors are given below along with their activity times.
Construct the network diagram. Find out the critical path.
 Activity Predecessors Activity time (weeks)
A – 4
B A 3
C A 2
D B 5
E B 3
F C,D 4
G E,F 3

Activity Slack
Activity EST EFT LST LFT
time
A 4 0 4 0 4 0
B 3 4 7 4 7 0
C 2 4 6 10 12 6
D 5 7 12 7 12 0
E 3 7 10 13 16 6
F 4 12 16 12 16 0
G 3 16 19 16 19 0
Critical path = A – B – D – F – G

(a) Draw an arrow diagram representing the project

(b) Calculate the early and late start and finish times for each job

(c) How much slack job (3,5), job (4,6) and job (7,8) have?

(d) Which jobs are critical

(e) If job (2,3) were to take 12 days instead of six, how would the project finish date be
affected?

(f) Do any jobs have free slack? If so which ones and how much.

Free
Activity Duration EST EFT LST LFT Slack
slack
A 4 0 4 0 4 0 0
 B 6 4 10 10 16 6 0
C 10 4 14 4 14 0 0
D 8 10 18 16 24 6 0
E 2 10 12 24 26 14 14
F 12 14 26 14 26 0 0
G 4 14 18 28 32 14 0
H 16 18 34 24 40 6 6
I 14 26 40 26 40 0 0
J 8 18 26 32 40 14 14
Since the job (2,3) activity B has a slack of 6 days, the project will not be effected by the
change in duration of B.

(6) A small project is composed of 10 activities whose time estimate are listed below (a) Draw
the project network and identify all path (b) Find the expected duration and variance for
each activity.

Most likely time Pessimistic time

Activity Optimistic time (to)
(tm) (tp)
1–2 5 12 17

1–3 9 11 12

1–5 8 10 13

2–4 9 11 13

2–5 5 8 9

3–6 14 18 22

4–8 14 17 21

5–7 21 25 30
 6–7 8 13 17

7–8 6 9 12

Activity Expected duration Variance

1–2 11.67 4.00
1–3 10.83 0.25
1–5 10.17 0.69
2–4 11.00 0.44
2–5 7.67 0.44
3–6 18.00 1.78
4–8 17.17 1.36
5–7 25.17 2.25
6–7 12.83 2.25
7–8 9.00 1.00
(7) If the critical path of a project is 40 months long with a standard deviation of 8 months,
What is the probability that the project will be completed within (a) 40 months (b) 36
months (c) 48 months

This is calculated as follows

TS − TE
P= When TS = Schedule time
σ

TE = Expected time

σ = Standard deviation

40 − 40
(a) TS = 40, TE = 40 ∴ P = = 0 from table probability is 50%
8

36 − 40
(b) TE = 40, TS = 36 ie, P = = − 0.5 from table probability is 30.8%
8

48 − 40
(c) TE = 40, TS = 48 ie, P = = − 1 from table probability is 841%
8
8. One subcontractor is responsible for activity A and another contractor for activity B. From
their reputations. You estimate that activity A has 90% likelyhood of being completed on
time and that 4 out of 5 times the contractor B will complete his work on schedule.

(a) If activity C cannot begin until both A and B has been completed. What is the probability
of starting C.

(b) If activity C can start when either A or B has been completed, what is the probability of
starting C on the schedule date?

(a) P(C) = P(A) P(B)

(0.9) (0.8) = 0.72

(b) P(C) = P(A+P(B)–P(A) P(B)

= 0.9 + 0.8 – (0.9) (0.8) = 0.98

The probability of starting activity C on time is 0.98

(9) The interdependence of a job consisting of seven activities A to G is given below

Activity A B C D E F G
Preceding
– – A B A B C&D
Activity
Succeeding
C&E D&F G G – – –
Activity
The time estimates in days for each activity are as follows:

Activity Time estimates • Normal

distribution Probability %
to tm tp data (Z) +
A 6 9 18
B 5 8 17 0.8 78.81
C 4 7 22 0.9 81.59
D 4 7 16 1.0 84.13
E 4 7 10 1.1 86.43
F 2 5 8 1.2 88.49
 G 4 10 22
Find out the probability of completing the project in 35 days.

10. Draw a critical path for the following net work. Calculate the probability of meeting the
schedule if the schedule time is 26 days.

Solution

t o + 4t m + t p
Activity to tm tp te = σ σ2
6
1–2 2 4 7 4.167 0.83 0.6889
2–3 1 1 2 1.167 0.17 0.0289
3–5 1 2 3 2.00 0.33 0.1089
5–7 3 5 6 4.83 0.50 0.250
7–9 4 6 10 8.33 1.00 1.00
9–10 5 7 10 7.167 0.83 0.6889
2–4 2 4 5 3.833 0.50 0.250
4–6 1 2 3 2.00 0.33 0.1089
6–8 7 10 13 10.00 1.00 1.00
8–10 4 7 9 6.83 0.83 0.6889
10–11 1 1 2 1.167 0.17 0.0289
critical path is 1–2–3–5–7–9–10–11 Duration = 28.828

Variance of the project = 0.6889 + 0.0289 + 0.1089 + 0.250 + 1.00 + 0.6889 + 0.0289

= 2.7945

S.D. ( σ ) = 2.7945 = 1.6717

ts − te 26 − 29
Normal deviate (Z) = = = –1.79
σ 1.6717

Probability of meeting the schedule is 3.5% (from probability table)

11. A project consists the following activities and different time estimates

Most likely time

Activity Least time Great time (days)
(days)
 1–2 3 15 6
1–3 2 14 5
1–4 6 30 12
2–5 2 8 5
2–6 5 17 11
3–6 3 15 6
4–7 3 27 9
5–7 1 7 4
6–7 2 8 5
(a) Draw the network

(b) Determine the expected task time

(c) Find the critical path

(d) What is the probability that the project will be completed by 27 days?

(c) Critical path is 1–4–7

Duration is 25 days.

(d)

Activity σ ( σ )2
1–2 2 4
1–3 2 4
1–4 4 16
2–5 1 1
2–6 2 4
3–6 2 4
4–7 4 16
5–7 1 1
6–7 1 1
Variance of project = 16 + 16 = 32

σ of project = 32 = 5.66
 tg − te 27 − 25
Z= = = + 0.353
σ 5.66

probability % = 63.761 %

Introduction to PERT Cost

Cost is always associated with duration of an activity, and therefore a project cost is a
function of duration. In order to be able to take decision whether a particular project is to be
completed in 6 months or 8 months, the decision making authority needs to know, in addition to
other intangible things, two important things :

a) Direct Cost - The cost which can be charged to individual activities and consist of
direct Labour, material and equipment.

b) Indirect Cost - The cost which are related to control and direction of the project and
consist of financial overheads (interest, consultants and specialists charges, cost of PERT during
the project, supervision indirect material, labour) These cost generally increase with duration.

It is assumed that for each activity, there is an activity duration for which the direct cost
is minimum. If activity results in more than this time, more resources and hence more funds are
required. For instance a point will be reached beyond which no further reduction in time will be
possible irrespective of the resources spent. The time for the activity at minimum cost is called
normal time and the minimum time for the activity is called crash time. The costs associated with
these times is called normal and crash costs.

Crash cos t − Normalcos t

Cost slope =
Normal time − Crash time

Procedure for crashing

The process of reducing the project duration is called crashing. The crashing is at the
cost of extra resources.

1. Construct the network diagram and find the critical path.

2. Calculate the cost slope for different activities.

3. Crashing the network - crashing the activities in critical paths as per the
ranking ie, the activity having lower cost slope would be crashed first to the maximum possible
extent.

4. Determine the total cost of the project.

P1. From the activity details given below. Determine the optimum project duration and cost.

Normal Crash Cost slope

Activity Time Cost Time Cost

1-2 8 100 6 200 50

1-3 4 150 2 350 100

2-4 2 50 1 90 40

2-5 10 100 5 400 60

3-4 5 100 1 200 25

4-5 3 80 1 100 10

Indirect cost = Rs. 70/day

Activity Duration EST EFT LST LFT Slack Remarks

1-2 8 0 8 0 8 0 Critical

1-3 4 0 4 6 10 6

2-4 2 8 10 13 15 5

2-5 10 8 18 8 18 0 Critical

3-4 5 4 9 10 15 6

4-5 3 10 13 15 18 5

Critical path : 1-2-5

 Duration = 8 + 10 = 18 days

Direct cost of the project = 580/-

Indirect cost of the project = 18 × 70 = 1260/-

Total cost of the project = 1840/-

Instead of crashing all activities, only those, whose cost slope is less than the indirect
cost.

Step 1: Here both critical activities 1-2, 2-5 have cost slope less than indirect cost.

The minimum cost slope is with 1-2, ie, Rs. 50/- and can be crashed by two days.

∴ Project duration = 16 days, while critical path remains unchanged

Direct cost = 580 + 2 × 50 = 680/-

Indirect cost = 16 × 70 = 1120/-

Total cost = 1800/-

Step 2: Now crash activity 2 - 5 by 5 days. Critical path changed to 1-3-4-5

Direct cost = 680 + 5 × 60 = 980/-

Indirect cost = 12 × 70 = 840/-

Total cost = 1820/-

Step 3: Activities on new critical path having cost slope less than indirect cost are (3 - 4)
and (4 - 5)

Crashing (4 - 5) by 2 days, critical path again changes to 1-2-5.

Direct cost = 980 + 2 × 10 = 1000/-

Indirect cost = 11 × 70 = 770/-

Total cost = 1770/-

Step 4: The project cannot be crashed any further as the activities on the critical path are
already crashed. The activity (4 - 5) need not be crashed by 2 days, instead it can be crashed by
only one day without affecting the project duration. But cost changes. There will be a saving of
crashing cost of activity (4 - 5) for one day.

∴ Total cost = Rs. 1760/- Total duration = 11 days

12. A small project consist of 7 activities. The activities are identified by their starting and
ending nodes. Normal time, cost and crash time and cost figures for all the activities are given
below:

(a) Draw the net work diagram?

(b) What is the normal project duration?

(c) Which activities fall on critical path?

(d) What is normal cost of the project?

(e) If all the activities are crashed immediately. What is crash cost?

(f) What will be the minimum project duration if activities are crashed?

(g) Develop the most economic project schedule, if indirect cost per week is Rs.90.

Activities Normal Crash

Weeks Cost Week Cost

1-2 A 5 60 4 90

1-4 B 7 150 5 250

1-3 C 3 30 2 60

2-4 D 6 150 4 250

3-4 E 3 100 3 100

2-5 F 9 115 7 175

4-5 G 5 100 3 240

(b) Normal project duration is 16 weeks as the duration of longest path is 16 weeks

(c) Critical activities are 1-2-4-5

(d) Normal cost of the project = Rs. 705

Indirect cost of the project = Rs. 90 × 16 = 1440/-

Total cost of the project = Rs. 2145/-

(e) If all activities are crashed the total crash cost is Rs. 1165/-

(f) Cost slope is calculated as follows.

Activity Cost slope

1-2 30

1-4 50

1-3 30

2-4 50

3-4 0

2-5 30

4-5 70

All activities has a cost slope less than indirect cost. The activity on the critical path
having minimum cost slope is (1 - 2) Activity A can be crashed by 1 week.

Project duration is 15 weeks.

Direct cost = 705 + 30 × 1 = 735/-

Indirect cost = 90 × 15 = 1350/-

Total cost = 2085/-

Then activity 2-4 can be crashed by 2 weeks.

New project duration = 15-2 = 13 weeks

Direct cost = 735 + 50 × 2 = 835/- 

 Total cost = Rs. 2005/-
Indirect cost = Rs. 90 × 13 = 1170/- 

After crashing we have two critical paths 1-2-5 and 1-2-4-5 of 13 weeks duration. In
crashing the project further, the only alternative is to crash activity 2-5 and 4-5 simultaneously
by 2 weeks.

Duration = 13-2 = 11 weeks

Direct cost = 835 + (30 + 70) × 2 = 1035/-

Indirect cost = 90 × 11 = 990/-

Total coat = 2025/-

Comparing the total cost b/w various durations like 15, 13, 11 we conclude that 13
week’s schedule is the most economic.