Crashing Project Activities

Reducing Time and Cost

• Shortening project construction time is influenced by avoiding penalties, monetary incentives, freeing resources, and reducing indirect costs.
• Indirect costs include facilities, equipment, supervision, labor, and personnel.
• Managers can shorten project time via additional funds, personnel, efficient equipment, and relaxed work specifications.
• Evaluating the time cost-trade-off helps identify a plan that minimizes direct and indirect project costs, aiding rational decision-making on activities to crash and to what extent crashing is possible.
• Information needed includes regular/crash time estimates, regular/crash cost estimates, and a list of activities on the critical path.
• Activities on the critical path are potential candidates for crashing.
• Shortening non-critical activities will not affect the total project duration

Crashing Project Activities

• Activities should be crashed according to crashing costs, starting with the lowest cost.
• Crashing should continue as long as the crash cost is less than the benefits received.
• Crashing activities reduces indirect costs and increases direct costs.
• The optimum amount of crashing minimizes the sum of these costs.
• Benefits might be incentive payments or savings in project costs.

Procedure in Crashing Project Time

• First, estimate regular and crash time and costs for each activity.
• Determine the length of all paths and their float time.
• Identify activities on the critical path.
• Crash critical activities in order of increasing costs if crashing costs do not exceed benefits
• Two or more paths may become critical, requiring simultaneous shortening of paths.
• It can be more economical to shorten an activity on two or more critical paths if the joint crashing cost is less than crashing separate activities.

Illustration of Crashing Project Time

• With an indirect cost of Php10,000, develop an optimum time-cost plan.
• Path Length Calculation: Path 1-2-5-6 (A-B-F) = 8 + 12 + 4 = 24 days; Path 1-3-4-5-6 (C-D-E-F) = 7 + 6 + 9 + 4 = 26 days.
• The critical path is 1-3-4-5-6 at 26 days.
• Critical path activities ranked by crashing cost are C (Php2,000, 1 day), E (Php4,500, 2 days), B and D (Php6,000, 2 & 4 days), F (Php7,000, 2 days).
• Start shortening one day at a time, checking which path is critical after each reduction.
• Shortening activity C by one day (Php2,000) reduces the critical path to 25 days.
• Shortening activity E by one day (Php4,500) makes path (C-D-E-F) 24 days.
• Both paths are now critical at 24 days, requiring each path to be shortened.
• Shortening F shortens both paths but is most expensive.
• Shorten activity B (Php 6,000) and activity E (Php 4,500) for Php 10,500 total, making the project duration 23 days.
• No further improvement is feasible as costs exceed the daily project cost (Php 10,000).

Illustration 2: Optimum Crashing Plan

• For a project with indirect costs of Php 10,000 per week, determine an optimum crashing plan and graph total costs.
• Path Durations: A, B (22 weeks), C, D (17 weeks), E, F (21 weeks).
• Critical Path: A, B (22 weeks).
• Path A, B activities ranked by crashing costs are B (Php 3,000 1st week) and A (Php 8,000).
• Shorten activity B (lower crashing cost) to reduce indirect costs: Php 10,000 - 3,000 = Php 7,000 net savings.

Illustration 3: Crashing Activities and Paths

• With Activity B shortened, paths A, B and E, F have equal lengths of 21 weeks, both becoming critical paths.
• Rank activities by crashing costs on both critical paths: B (Php 4,000), A (Php 8,000) on A-B and E (Php 5,000), F (Php 2,000) on E-F.
• Crash B on activity A-B and F on activity E-F: 10,000 - 4,000 = Php 6,000 net savings and 10,000 - 6,000 = Php 4,000.
• Verify paths: with one crash week on both paths, A-B and E-F would be 20 weeks compared to the 17 weeks of path C-D
• Paths: Re-rank activities on the critical paths
• Additional Crashing :Crash B on path A-B and E on path E-F.
• Subtraction Savings: Total savings = Php 1,000

Project Duration

• No further improvements are possible since activity A would mean Php 8,000 and acitivity E means 5,000 for a Php 13,000 total
• Activity A + E exceeds the Php 10,000 potential savings in indirect costs to improve 1 week
• Crashing Sequence: Summarize the project with respective lengths of weeks and activity costs
• Optimum costs in project length can be seen by comparing the project cost chart

Illustration 4:

• Question: Can project be done in 18 weeks for less than Php 75,100
• The Normal Time Critical Path B-D-F-I equals 33 weeks, with a direct cost of Php 44,000.
• Calculate Path lengths : Determine various path lengths and identify critical path, listed as A,C,F,I ; B,E,H ; B,D,F,J ; B,E,G,I
• Determine a critical path which is B, D, F, I with 33 weeks
• Prioritize critical path activities to see if crashing any activities with the lowest costs would bring savings

Crashing Savings

• Calculate paths B, D, F, I and reduce the savings
• D is the lest expensive to crash at at cost of Php 500
• Next, crash/reduce activit B to its minimum and subtract to see crashed activity
• Lastly, take the savings after multiplyiing cost/week * weeks to see crashed savings
• After savings are calculated, crash the activity costs to see if the net savings is in accordance for the overall project

Network Path Results

• Reduce critical project, follow this order to reduce costs in respective manners

Relaxing the Path

• First, analyze the costs remaining to reduce
• Next, find weeks to uncrash and perform the total cost and weeks saved
• Perform with lowest cost and go up
• Next, calculate project results after relaxing non-critical path activities
• This allows the team to calculate new savings and cost parameters

Uncrashing Cost

• In Crashing Cost, start crashing on least expensive activities, while in cost reductions, focus on the most expensive activities being worked on.
• When activity F is relaxed, activity A ,C, F, & I can have an optimum time.
• Calculate the new optimum

Optimizing Path Savings

• Determine activities that have no been uncrushed to see what is a bottleneck
• Activity E and G are not on the critical path
• Reduce Activity E and G costs to gain additional work recovery
• Calculate final costs and optimum savings

Optimum costs

• There is always direct costs and indirect costs within a project with the team performs activities for both.
• Total Savings: The team works to optimize and reduce costs during tasks and find alternatives.

Project cost comparison

• 18-20 weeks: Between 18 weeks or 20 weeks, only direct and indirect costs are counted
• 20 to 33 weeks: If project goes over the 20 weeks duration for the overall project then the utility is calculated
• Indirect costs: utility expenditures and operations bond (the like)
• Utility Costs: bonuses or penalties for performing a project quick or late.