2016 - W6 CPM - Crashing A Project - Phill Horne

Project Time Management:
Critical Path Method - Crashing a Project
Plan for today
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Critical Path Method Crashing Schedules
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Group Work Networks & Tables
Group Work This Week Expectations
Feedback
Group Work Networks & Tables
Group Work This Week Expectations
Exam logistics
Baselining When do we do it?

What
Value?
How will
wedeliver
Value?
What?
Why?
How?
How Much?
State
the
Project
Develop
Objectives
Define
the
Work
Identify
Resources
Project Charter
Scope Definition
WBS
IRR Matrix
Who?
What Order?
When?
When, by Whom?
Assign
Resources
Sequence
the
Work
Schedule
the
Work
Schedule
Resources
RAM
CPM Network
Gantt Chart
Gantt & Res. Loading
Delivery
of Value
5
Baselining Why do we do it?

What
Value?
How will
wedeliver
Value?
What?
Why?
How?
State
the
Project
Develop
Objectives
Define
the
Work
Identify
Resources
Project Charter
Scope Definition
WBS
IRR Matrix
Who?
What Order?
When?
When, by Whom?
Assign
Resources
Sequence
the
Work
Schedule
the
Work
Schedule
Resources
RAM
CPM Network
Gantt Chart
Gantt & Res. Loading
Are we still on Track?
What Changes?
Are we Done?
Start
Implementation
Monitor
the
Work
Modify
the
Work
Closeout
&
Evaluate
RAM
Timesheets / Gantt
PCRs
PIR
Are we Ready?
Delivery
of Value
How Much?
Baselining Where is it Visible?
Baselining Where is it Visible?
Baselining How does it work?
Baselining How does it work?
10
Where are we up to?
11
Plan for today
Lecture: Crashing a project

Chapter 9
~ 18 pages
12
Project Time Management:

Critical Path Method - Crashing a Project
13
Learning Outcomes
Calculate the crashing cost

Select the activity to crash
Discuss the sensitivity of CPM networks
14
CPM - Crashing a Project

As discussed in the last lecture, CPM
is a network scheduling technique
was designed for construction projects
uses one time estimate that represents normal time
15
Definition of CPM
A scheduling method based on the estimates of

time required to complete activities on the critical
path. The method computes early, late, and slack
times for each activity in the network. It
establishes a planned project duration, if one is
not imposed on the project.
16
Definition of Critical Path
The path(s) with the longest duration through the

network, if an activity on the path is delayed, the
project is delayed by the same amount of time. It
can be distinguished by identifying the collection
of activities that all have minimum slack
Another Definition of Critical Path
The longest path in the project, but the shortest

time in which the project may be completed
17
Crashing a Project
Shortening the duration of an activity or a project is called
crashing. It is a cost-time trade-off decision.
Some common reasons to crash a project:
Time to market intense global competition, e.g. electronics industry
Unforseen delays caused by adverse weather, equipment breakdown
Incentive contract contractor share the saving for early completion
Imposed deadlines e.g. a politician makes a public statement that a

new building (e.g. library) will be available in only two years from now
High overheads cost
Scope creep
Repairing the Santa Monica Freeway after the 1994 Earthquake..or Titanic
18
19
Harland & Wolff put a third shift on, to crash

the schedule & deliver NOT one day late
20
21
Crashing a Project to Reduce Project Costs
The bottom line to a business is that crashing has to

make economic sense
The benefit must (?) outweigh the added costs
Two principles in crashing a project:
Focus on those activities on the critical path(s)
Start with activities with lowest crashing cost per unit of

time
In practice, unit of time usually in days because were

looking at skimming perhaps a day at a time off of our
project
22
Crash Time and Cost in CPM

In CPM, two activity times and two costs are often specified
for each activity:
Normal time: low-cost, realistic, using efficient methods,

that an activity may take to complete under normal
conditions (may)
Crash time: shortest possible time an activity can

realistically be completed (can)
Normal cost: the cost for completing an activity under

normal conditions
Crash cost: the cost for completing an activity in its

crash time
23
Explanation of 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
Labour, materials, equipment, and subcontractors
Crashing activities increases direct costs
24
Crashing cost/unit of time

Calculation of crashing cost/unit of time:
Cost/time slope = crash cost - normal cost

normal time - crash time
A hypothetical cost-time graph for an activity:
25
Crashing cost/unit of time (cont.)
Assumptions:
the cost-time relationship is linear
slope represents a constant cost per unit of time
all accelerations must occur within the normal and

crash times
Cost/time slope = ($800 - $400)/(10-5)

= $80/unit of time
26
Crashing an example on least-cost method
Chapter 9
page 322
Additional Legend
Component
27
Crashing a Project An Example (cont.)

Original project Duration = 25 days
Original Direct Cost = $450
28

Original project Duration = 25 days
Original Direct Cost = $450
29
Why is there
an optimum
cost-time
point?
This is because the incremental indirect cost savings

exceed the incremental direct cost incurred
30
Three major steps to

construct a project costtime 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
durations.
Chapter 9
page 321
31
Crashing Decisions and Sensitivity
In the selection and order of the activities to crash:

a good possibility that a new critical path will be
developed
risk must be considered
timing of activities need to be considered
Sensitivity of the networks indicate to what extent we can

crash a project
32
Crashing Decisions and Sensitivity (cont.)
A sensitive network has several critical or near-critical

paths; slack reduction on networks with several nearcritical paths may cause delays to near-critical activities
and become critical. Money spent on original critical
paths would be wasted.
An insensitive network has a dominant critical path, that

is, no near-critical paths.
33
Practical Considerations in Crashing
Crash times
Collecting crash times can be a difficult task
The accuracy of crash times and costs is often rough
at best
Linearity assumption
Relationship between time and cost is not linear-but
curvilinear
Linear assumption allows quick comparison and is
adequate for most projects
34
Practical Considerations in Crashing (cont.)

Partial crashing
In our example we crashed the activities partially (i.e.
in increments of one time period), however there are
cases, albeit rare situations, in a network where
activities can be crashed all or nothing
Impact of crashing
morale and motivation of the project team
35
An Alternative Fast-tracking
Another way to expedite a project is known as fasttracking
It refers to overlapping/multi-tasking, e.g. the design and

construction phases of a project
Because design is usually completed before construction

starts, overlapping the two activities will result in
shortening the project duration
Fast-tracking is common in construction projects
Chapter 9
page 317
36
What is fast-tracking?
Source: Ashworth (2006)
37
Thank You
38

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Project Time Management:

Critical Path Method - Crashing a Project

Plan for today

Critical Path Method Crashing Schedules

Group Work Networks & Tables

Group Work This Week Expectations

Group Work Networks & Tables

Group Work This Week Expectations

Baselining When do we do it?

Gantt & Res. Loading

Baselining Why do we do it?

Gantt & Res. Loading

Are we still on Track?

Baselining Where is it Visible?

Baselining Where is it Visible?

Baselining How does it work?

Baselining How does it work?

Where are we up to?

Plan for today

Lecture: Crashing a project

Project Time Management:

Calculate the crashing cost

CPM - Crashing a Project

is a network scheduling technique

was designed for construction projects

uses one time estimate that represents normal time

A scheduling method based on the estimates of

Definition of Critical Path

The path(s) with the longest duration through the

Another Definition of Critical Path

The longest path in the project, but the shortest

Time to market intense global competition, e.g. electronics industry

Unforseen delays caused by adverse weather, equipment breakdown

Incentive contract contractor share the saving for early completion

Imposed deadlines e.g. a politician makes a public statement that a

High overheads cost

Harland & Wolff put a third shift on, to crash

Crashing a Project to Reduce Project Costs

The bottom line to a business is that crashing has to

The benefit must (?) outweigh the added costs

Two principles in crashing a project:

Focus on those activities on the critical path(s)

Start with activities with lowest crashing cost per unit of

In practice, unit of time usually in days because were

Crash Time and Cost in CPM

Normal time: low-cost, realistic, using efficient methods,

Crash time: shortest possible time an activity can

Normal cost: the cost for completing an activity under

Crash cost: the cost for completing an activity in its

Explanation of Project Costs

Project Indirect Costs

Crashing cost/unit of time

Cost/time slope = crash cost - normal cost

A hypothetical cost-time graph for an activity:

Crashing cost/unit of time (cont.)

the cost-time relationship is linear

slope represents a constant cost per unit of time

all accelerations must occur within the normal and