Calculate crash cost per day

Project Management Critical Path

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.

Activity

Predecessor

Normal Time

Normal Cost

Crash Time

Crash Cost

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: __________________

· The project duration: ___________

· The project cost is: _____________

(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

Activity

Normal Time

Normal Cost

Crash Time

Crash Cost

Crash Cost/Day

a

b

c

d

e

f

g

h

i

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

· What is the projected project cost?

· What is the projected project duration?

· What is the critical path (or paths)?

· What task or tasks were crashed?

Explain the results of your calculations.

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

· What is the projected project cost?

· What is the projected project duration?

· What is the critical path (or paths)?

· What task or tasks were crashed?

Explain the results of your calculations.

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

· What is the projected project cost?

· What is the projected project duration?

· What is the critical path (or paths)?

· What task or tasks were crashed?

Explain the results of your calculations.

� Assume that each task’s crash costs are linear, ie that each day a task is crashed has an equal cost.