PMAN635

Project Cost, Schedule, and Resource Management

PMAN635 Session 7 Individual Assignment

Problem 1: Given the information provided below (predecessors, normal time, normal cost,
crash time (the minimum duration) and crash cost (the cost if crashed to the minimum duration)
for an nine-activity (a to i) project) answer the questions (a) through (e) using this template. You
need to provide enough explanations to show evidence that you have understood this topic.

Activity Predecessor Normal Normal Crash Crash Cost

Time Cost Time
a - 4 $ 50 2 $ 150
b a 4 $ 40 2 $ 200
c b 7 $ 70 4 $ 160
d c, f 2 $ 20 1 $ 50
e c 3 $ 30 2 $ 100
f b 8 $ 80 5 $ 290
g d, e 5 $ 50 3 $ 100
h f 6 $ 60 2 $ 180
i g, h 3 $ 50 3 $ 50

(a). Create the network diagram in the application of your choice and then insert a screen shot of
the diagram here. The diagram can be created easily in MS Word using the Insert Shapes
function.

Identify the critical path of the network, the time, and cost of the normal level of activity for the
project:
 • The critical path (or paths) is: a→b→f→d→g→I or a→b→c→e→g→I
since each of the paths has 26 days
• The project duration: 26 days
• The project cost is: $450

(b). Calculate the crash cost-per-day (all activities may be partially crashed). Enter your response
to question 1(b) in the table provided below

Activit Normal Time Normal Cost Crash Time Crash Cost Crash Cost per
y (days) ($) (days) ($) Day ($)
a 4 50 2 150 50
b 4 40 2 200 80
c 7 70 4 160 30
d 2 20 1 50 30
e 3 30 2 100 70
f 8 80 5 290 70
g 5 50 3 100 25
h 6 60 2 180 30
i 3 50 3 50 0 (Cannot be
crashed)

(c). Find the optimal way to crash the project by one day.

• What is the projected project cost? $475

• What is the projected project duration? 25 days

• What is the critical path (or paths)? a→b→f→d→g→I or a→b→c→e→g→I

What task or tasks were crashed? Activity g (Reduced from 5 days to 4 days at $25 cost)

Explain the results of your calculations.

In order to determine how to reduce the project time from the original 26 days down to 25

days, the two critical paths were found to be: path one, a→b→f→d→g→i, path two being

a→b→c→e→g→i. We will crash the project optimally using the method that ensures the least

increase in cost per day of crash. Among the critical activities, activity g has the lowest crash

cost of $25 per day and can be reduced from 5 to 3 days. Thus the project was crashed by one

day on activity g (5→4), reducing the overall project duration from 26 days to 25 days, incurring
a crash cost of $25. The new total project cost is $475. The paths remained intact since g was

found on both critical paths. Such a method ensures a minimum cost incurred and meets the

deadlines as efficiently as possible. The next step is to crash the project by another day.

(d). Find the optimal way to crash the project by two days.

• What is the projected project cost? $505

• What is the projected project duration? 24days

• What is the critical path (or paths)? )? a→b→f→d→g→I or a→b→c→e→g→I

• What task or tasks were crashed? Activity d (Reduced from 2 days to 1 day at $30 cost)

Explain the results of your calculations.

In order to shorten the project duration from 25 to 24 days, we examined the critical

paths and chose the most economically feasible activity to crash. Since activity g was

already crashed in the previous step, we chose activity d in the following best position. D

had a crash cost of $30 per day, which was lower than most of the other critical activities.

By reducing d from 2 days to 1 day, the overall project duration decreased to 24 days, while

the total project cost rose to $505. This way, we ensure that we inflict the least damage in

additional costs while shortening the duration of the project. The critical paths were not

modified, and hence d is included in both. The best alternative to be crashed on an

economic basis is time-efficient and budget-efficient. Stepping through time and cost

maximization modes prepares us to search for further crashes in the next step for the

shortest duration project.

 (e). Calculate the shortest completion time for the project.

• What is the projected project cost? $1035

• What is the projected project duration? 15 days

• What is the critical path (or paths a→b→f→d→g→I or a→b→c→e→g→I

 What task or tasks were crashed? c (7 → 4 days), f (8 → 5 days), b (4 → 2 days), and e (3

→ 2 days

• Explain the results of your calculations.

In search of the shortest project duration, we kept crashing the activities at the minimum

costs possible, beginning with the initial project duration of 24 days and proceeding to crash

various activities along the critical paths. Activity c was first crashed by three days from 7 to 4

at a cost of $30 per day. This brings the duration down to 21 days, with an additional cost of $90.

Further crashing took place with activity f crashed by three days from 8 to 5 days at a cost of $70

per day, which gave a new duration of 18 days and an additional cost of $210. The next activity

crashed was b from 4 to 2 days at a cost of $80 per day producing 16 days duration at an

additional cost of $160. The last activity crashed was e from 3 to 2 days at a cost of $70,

resulting in the shortest possible duration of 15 days with a total of $1035.