Crashing of Project Networks

PROJECT CRASHING AND TIME-COST TRADE OFFS

The project manager is frequently confronted with having to reduce the scheduled completion time of
a project to meet a deadline. In other words, the manager must finish the project sooner than
indicated by the CPM/PERT network analysis. Project duration can often be reduced by assigning
more labor to project activities, in the form of overtime, and by assigning more resources (material,
equipment, and so on). However, additional labor and resources increase the project cost. Thus, the
decision to reduce the project duration must be based on an analysis of the trade-off between time
and cost. Project crashing is a method for shortening the project duration by reducing the time of one
(or more) of the critical project activities to less than its normal activity time. This reduction in the
normal activity time is referred to as crashing. Crashing is achieved by devoting more resources,
usually measured in terms of cost, to the activities to be crashed.
Consequently, since crashing your project will increase your project cost, you must identify all critical
path tasks that have the potential to compress your project schedule. If you are unable to add
resources to critical path tasks resulting in shortening your project schedule, do not attempt to
implement project crashing. Do not select non-critical path tasks to crash because adding additional
resources to non-critical path tasks will have no effect to your project schedule.
In crash analysis, the project manager offers re-planning advice based on the relationships between
time and cost. This of course assumes that performance or quality criteria are fixed, as is the case in
most projects. In most cases the specified outcome is fixed. It is a schedule compression technique in
which costs and schedule tradeoffs are analyzed to determine how to obtain the greatest amount of
compression for the least incremental cost.As a compression technique, crashing concentrates on the
project schedule in an effort to accelerate the project's completion date. Plausible examples of
crashing include the following:
 Over-time
 Allocating additional resources to specific activities
 Hiring additional resources
 Incentive payments for early completion
 Subsequently outsourcing portions of the project to be completed within a shorter time
period than would have been possible if the same work was to be completed by internal
resources.
Crash analysis would be used, for example, where a project manager produces a project schedule that
is not acceptable to the client. The project manager's calculations may indicate that the project will
take 45 weeks to complete at a cost of $1.9 million.

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The client may not be able to accept the 45-week duration, as completion earlier may be critical to the
continued success of the business product line. The client may ask the project manager to increase the
resources on the project and complete in no more than 38 weeks. Generally, if time for completion is
reduced, the project will cost more as additional resources have to be introduced. The project
manager has to be able to calculate the optimum combination of resource increases required to meet
this shortened project duration.

Time-cost trade off

To reduce the duration of the project, it is necessary to concentrate on reducing the critical path. The
critical path is the shortest time that the project can be completed. An attempt to shorten noncritical
tasks would be ineffective, as this will not allow the project to be completed any sooner. Generally, a
project will have clearly defined time and cost performance at the start. If it is assumed that the
project is subject to the classical time, cost, and quality success criteria, then it is possible to consider
time and cost as a function. This is done most simply if we assume that the third variable, namely
quality, is fixed. If this assumption is made, then cost can be considered as a function of time, and the
relationship between the two can be plotted as a curve.
A typical curve for the time-cost function of a project is shown in Exhibit 1. Generally, a time-cost
curve will typically have a starting point at the agreed tender or project price. This usually represents
the minimum or near-minimum cost value and the near-optimum time values. In Exhibit 1, this
position is represented as point A and is typical of optimum time and cost considerations for most
types of project.
In order to reduce the time estimate and save time on the project, there will almost certainly be a
requirement to increase resources. This will allow the project to finish more quickly but will result in
a cost increase. If a project manager is looking for different ways to achieve this, the most obvious way
is to work out which activity can be speeded up at least cost, and then crash (i.e., reduce the overall
activity duration) that one first, followed by the next cheapest, and so on. This will result in the typical
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negative time-cost curve shown in Exhibit 1, increasing in gradient as overall time for the project
decreases. This curve will reach a point where all critical-path activities have been speeded up as far
as possible. Beyond this point, no further time can be saved on the project. Any further crashing will
result in cost increases, and no further time will be saved. The curve will therefore be vertical.
Thus, Exhibit 1, point (A) represents the original starting point, where the project will take 30 weeks
to complete. This is the agreed tender amount and the agreed project duration. In this case, the tender
amount is $60 000 and the project duration is 30 weeks. Point (B) is where the time allocated is
reduced to 20 weeks, and the cost increases to $80 000. Point (C) represents the shortest time
possible, in this case 15 weeks, and cost increases to $150 000. Beyond point (C), no further time-
savings are possible. One reason for this could be that all the critical-path activities have already been
fully compressed.

Exhibit 1: Typical Time-Cost Curve

RESOURCE ALLOCATION VS. RESOURCE LEVELING

A key component of planning is the allocation of small business resources to the project to ensure that
personnel and materials are available as needed to achieve the goals. After the initial resource
allocation is completed, resource leveling occurs to match the resource allocations to resource
availability in a timely and cost-efficient manner. Resource Allocation
Resource allocation, also called resource loading, commits certain resources to project plan activities.
More than one resource and type of resource can be allocated to each activity. Some project phases
and activities require fewer resources than others, and these requirements can vary during the length
on the work. For example, roles committed to a software development project might include a team
leader, change facilitator, business analyst, process owner, process specialist, process modeler,

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solution architect, solution designer, programmer, training specialist, technical writer and end user.
However, the training specialist and technical writer might not be required to join the team until the
deployment phase of the project. Therefore, these two resources are allocated to the deployment
phase of the project only.
Resource Leveling
After using the resource allocation process to define project resource requirements, resource leveling
is used to relate the requirements to available resources. This leveling process ensures that resource
demand does not exceed available resources during a particular time frame, and in light of individual
activity interdependencies. During resource leveling, resource requirements are expressed in terms of
the hours and days during which the resource is required. For example, assume that during the
resource allocation process, a programmer is allocated for eight hours each day to a project. However,
the original plan assigns three different eight-hour tasks to the programmer on the same day. Using
resource leveling, the three tasks are rescheduled to occur on three different days. As a result, the
problem of the overallocation of the resource is resolved.
Resource Leveling Approaches
One of three resource leveling techniques are typically used to correlate resource requirements to
available resources: critical path, fast tracking and crashing. Using the critical path method, required
project activities are specified, the time required to complete each activity is stated, and activity
dependence is identified. In turn, fast tracking enables tasks to be run simultaneously, and crashing is
used to assign additional resources to a project stage or activity. Each technique is used to ensure
particular project objectives are accomplished on time.
Benefits of Resource Allocation and Resource Leveling
Resource allocation and leveling support proper allocation of business resources during a project's
life cycle. The appropriate allocation of resources attempts to ensure that delays in the completion of
tasks will be avoided. As a result, the on-time completion of project tasks is more likely. Such
completion of tasks avoids conflicts in team member assignments, which can lead to budget overruns.
Through the avoidance of over- and under-allocation of resources, it is more likely that a project is
completed on time and within the budget.
In project crashing Resource Allocation and Resource Levelling are the common techniques used
during Resource Constraints.
 In Resource Levelling the problem is to obtain the best possible smooth resource profile
overtime. The project deadline is fixed, but the resource capacity level might be adjusted.

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 In Resource Allocation the problem is to obtain the shortest possible project duration. There is
a given limit for the available resources (capacity limit) which cannot be exceeded. However,
the project duration might be adjusted to accommodate this.
This is illustrated in Exhibit 5 where the X axis is represents resources and the Y axis represents
time, where R represents the maximum available resources and r represents the minimum or
average resources required for completing the project. For every set activity the resources which
are required over and above the available resources will be levelled by either fast-tracking the
activity or outsourcing the excess activity. The set of activities which require less resources than
the average requirement have to be effectively analysed and allocated in order to avoid cost
overruns.

Exhibit 5: Resource levelling and allocation

LINE OF BALANCE
Line of Balance (LOB) is a management control process for collecting, measuring and presenting facts
relating to time, cost and accomplishment – all measured against a specific plan. It shows the process,
status, background, timing and phasing of the project activities, thus providing management with
measuring tools that help:

− Comparing actual progress with a formal objective plan.

− Examining only the deviations from established plans, and gauging their degree of severity
with respect to the remainder of the project.

− Receiving timely information concerning trouble areas and indicating areas where appropriate
corrective action is required.

− Forecasting future performance.

The LOB itself is a graphic device that enables a manager to see at a single glance which activities of an
operation are “in balance” – i.e., whether those which should have been completed at the time of the
review actually are completed and whether any activities scheduled for future completion are lagging

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behind schedule. The LOB chart comprises only one feature of the whole philosophy which includes
numerous danger signal controls for all the various levels of management concerned.

The purpose of the LOB method is to ensure that the many activities of a repetitive production process
stay “in balance” that is, they are producing at a pace which allows an even flow of the items produced
through a process and at a speed compatible with the goals set forth in a plan. The advantages of LOB
schedule are as follows
o Clearly shows the amount of work taking place in a certain area at a specific time of the project.
o Has the ability to show and optimize the resources used for large number of repeated activities,
executed in several zones or locations.
o Easier cost and time optimization analysis because of all the information available for each
activity in the project.
o Ease of setup and its superior presentation and visualization.
o Easier to modify, update and change the schedule.
o Better managing of all the various sub-contractors in the project.
o Allows for simpler and clearer resource management and resource optimization functions.
o Visualization of productivity and location of crews.
o It allows project managers to see, in the middle of a project, whether they can meet the
schedule if they continue working as they have been.

Projects: Planning, Control and Implementation