Project Management - Critical Path Method - Crashing of Project

 

Project Management

Critical Path Method

Crashing of Project

 

Part A: Discussion about:

            1. What is Crashing of Project, and

            2. Procedure for Crashing of Project.

Part B: YouTube link for the video on the above discussions including solution of one illustration involving -

i) Drawing the Network Diagram,

ii) Identifying the Critical Path,

iii) Determining Normal Project Duration and  Normal Project Cost,

iv) Crashing the times of activities and the project duration to arrive at the Optimum Project Completion Time, and

v) Determining the Optimum Project Cost.

Part A

What is project crashing?

A significant aspect of the CPM network analysis lies in its capacity to evaluate alternative ways to expedite some (or, if possible, all) of the activities indicated in a network and then analyse their cost implication. It means, under CPM technique the duration of some or all of the activities of a project can be cut down, if some additional resources like men, material and/or equipment are employed on them.

 

In general, the more the time, by which an activity time is required to be cut / crashed, the greater the amount of resources, that will be required to be employed on it. Thus, higher amounts of direct activity cost would be associated with smaller activity duration times, while longer duration times would involve comparatively lower direct activity costs. In short, for normal duration, direct activity costs involved will be normal, whereas for smaller duration, direct activity costs involved will be higher.

In simple terms crashing of project means reducing the activity times of the project deliberately by putting in extra effort and cost and thereby reducing the completion time of the entire project from normal level to an optimum level. In other words, deliberate reduction of activity times leading to reduction in normal project duration by putting in extra effort and direct activity costs is called crashing of project.

 

Project Crashing Procedure

Step: 1 – Computation of ‘Cost-slope’ of the activities

Cost-slope =

(Crash cost – Normal cost) ÷ (Normal time – Crash time)

 

Step: 2 – Crashing activity

If there is only one initial critical path, find the critical activity having the lowest cost-slope. Crash this activity by one day. Draw a new Network Diagram.

 

Step: 3 – Repeating Step: 2

Repeat Step: 2 so long there is only one critical path.

 

Step: 4 – Further crashing of activities which are common to the critical paths

If there is more than one critical paths crash those activities which are common to all the critical paths by as many days as possible. Draw a new Network Diagram.

 

Step: 5 – Further crashing of activities which are not common to the critical paths

At this stage, same number of days (as maximum as possible) should be crashed simultaneously from each of the critical paths. Of course, here care should be taken to ensure that the lowest ‘cost-slope’ activities are crashed first and then the next lowest ‘cost-slope’ activities in the same order. Draw a new Network Diagram.

 

Step: 6 – Repeating Step: 5

Repeat Step: 5 so long same number of days (as maximum as possible) can be crashed simultaneously from each of the critical paths ensuring that the lowest ‘cost-slope’ activities are crashed first and then the next lowest ‘cost-slope’ activities in the same order. Draw a new Network Diagram.

 

Step: 7 – Finding the optimum project completion time and optimum project cost

When no further crashing of activities is possible as per the above steps from 2 to 6, and, therefore, total project duration cannot be reduced any more, optimum project completion time is reached. Therefore, optimum project completion time will be the project completion time as per the latest network diagram.

 

Optimum project cost (Rs) =

Direct cost + Incremental cost + Indirect cost

 

Direct Cost	Total of Normal Costs of all the activities
Indirect Cost	Indirect Costs per day × Optimum project completion time

 

  Table for computation of incremental cost

Activity	No of days crashed (DC)	Cost-slope (CS)	(DC × CS)
1 – 2
1 – 3
Incremental cost (Rs)			Σ(DC × CS)

 

Part B

YouTube link for the video on the above discussions including solution of the following illustration.

Please click on the following YouTube Link:

Project Management - Crashing of Project

Critical Path Method

Crashing of Project

 

Illustration:

The following table gives data on normal time and cost and crash time and cost for a project:

Activity	Normal		Crash
	Time (day)	Cost (Rs)	Time (day)	Cost (Rs)
1 – 2	6	600	4	1,000
1 – 3	4	600	2	2,000
2 – 4	5	500	3	1,500
2 – 5	3	450	1	650
3 – 4	6	900	4	2,000
4 – 6	8	800	4	3,000
5 – 6	4	400	2	1,000
6 – 7	3	450	2	800

 

The indirect cost per day is Rs 100.

 

You are required to –

1.         Draw the network and identify the critical path,

2.        Determine the normal project duration and normal project cost, and

3.         Crash the relevant activities systematically and determine

i)            The optimum project completion time, and

ii)          The optimum project cost.