Managing Operations 1

Lecture 4: Chapter 7: Project Management; Today’s Topic: Crashing

Crashing:

This is the practice of doing one or more activities in a shorter than normal time.
Questions to be answered:
1. Can we really crash a project? (If NO, then you are done. If yes, go to
Question 2 & 3)
2. How much EXTRA does it cost to crash activities?
3. Do the benefits of completing the project in a shorter than normal time
outweigh the extra cost of crashing activities? (recall the story of the Santa
Monica Freeway)
Crashing is just Luxury or Necessity?
Sometimes crashing is necessary because an activity gets behind (even when you are
confident) and the project is in danger of being late.
Information Needed to Evaluate Crashing a Project:
Create a similar Table with following information:
As we are considering Space Constructors Inc. Example for Crashing, information
table looks as follows:

Activity Normal Normal Crash Crash Max. Cost Cost

Times Costs Times Costs Time Increases Increase/
N.C C.C Reduction (C.C – N.C) Period

A 3 $ 5,000 2 $10,000 1 $5,000 5,000

B 6 14,000 4 26,000 2 12,000 6,000
C 2 2,500 1 5,000 1 2,500 2,500
D 5 10,000 3 18,000 2 8,000 4,000
E 2 8,000 2 8,000 0 - -
F 7 11,000 5 17,000 2 6,000 3,000
G 4 10,000 2 24,000 2 14,000 7,000
TOTAL 61,000 108,000

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Managing Operations

Now that the information table is prepared, go through the steps from 1 to 4. The
Crashing Procedure involves the following steps:

STEP 1: Determine the Project’s critical path(s).

STEP 2: Find the activity or activities on the critical path(s) with the lowest cost
increase per week after crashing (Last column from information table)

STEP 3: Reduce the time for this chosen activity until (a) it cannot be further
reduced (column maximum time reduction will help), (b) another path becomes
exclusively critical, and (c) the increase in direct costs exceeds the savings that
results from shortening the project. If more than one path is critical, the time for an
activity on each path may have to be reduced simultaneously.

STEP 4: Repeat this procedure until the increase in direct costs is larger than the
savings generated by shortening the project.

Now that we intend to crash the project down to the lowest

time possible, we need to determine that lowest possible
time by Rationally Crashing the project.

Space constructors, Inc.

Normal time (12 weeks) (Normal Cost:$61000)

A (3), F (7) 10
----------------------------------------------------------+
A (3), D (5), G (4) 12
----------------------------------------------------------+
B (6) G (4) 10
----------------------------------------------------------+
C (2), E (2), G (4) 8
----------------------------------------------------------+

©Say.edul Karim
Managing Operations

Doing The Project in rationally Crashed Time to check “Can

we really crash the project according to the demand)
A (2), F (5) 7
----------------------------------------------------------+
A (2), D (3), G (2) 7
----------------------------------------------------------+
B (4) G (2) 6
----------------------------------------------------------+
C (1), E (2), G (2) 5
----------------------------------------------------------+
After Rationally Crashing, the shortest possible time:
(7 weeks) and the total cost : ($108,000)
Now let’s try to crash it down to 7 weeks.

Normal time (12 weeks) (Normal Cost:$61000)

A (3), F (7) 10
----------------------------------------------------------+
A (3), D (5), G (4) 12
----------------------------------------------------------+
B (6) G (4) 10
----------------------------------------------------------+
C (2), E (2), G (4) 8
----------------------------------------------------------+

Crashing the Project by 1 Week (11 Weeks) Activity: D1

Cost Increase: $4000

A (3), F (7) 10
----------------------------------------------------------+
A (3), D (4), G (4) 11
----------------------------------------------------------+
B (6) G (4) 10
----------------------------------------------------------+
C (2), E (2), G (4) 8
----------------------------------------------------------+

Crashing the Project by 1 more Weeks (10 Weeks)Activity: D1

Cost Increase: $4000

A (3), F (7) 10
----------------------------------------------------------+
A (3), D (3), G (4) 10
----------------------------------------------------------+
B (6) G (4) 10
----------------------------------------------------------+

©Say.edul Karim
Managing Operations

C (2), E (2), G (4) 8

Practice problem on crashing
Activity Normal Normal Crash Crash Max. Cost Cost
Times Costs Times costs ($) Time Increases Increase/P
($) ‘000 Red. (C.C – N.C) eriod($)
‘000
A 12 12 11 13 1 1,000
B 9 50 7 64 2 7,000
C 10 4 5 7 5 600
D 10 16 8 20 2 2,000
E 24 120 14 200 10 8,000
F 10 10 6 16 4 1,500
G 35 500 25 530 10 3,000
H 40 1,200 35 1,260 5 12,000
I 15 40 10 52 5 2,500
J 4 10 1 13 3 1,000
K 6 30 5 34 1 4,000
TOTALS 1,992,0 2,209,000
00

Q1: How fast can you finish the project?

Q2: What is the associated cost?
Q3: If possible, what is the total cost of completing the project within
61 weeks?

A(12) I(15) k(6) 33

A(12) F(10) K(6) 28

A(12) C(10) G(35) J(4) K(6) 67

B(9) D(10) H(40) J(4) K(6) 69

B(9) E(24) J(4) K(6) 43

©Say.edul Karim
Managing Operations

©Say.edul Karim