Module 5

CRASHING
CPM: Time-Cost
Relationship
Time Cost Relationship in CPM

CPM assumes that the estimated time

of completion for a project can be
shortened by applying additional
resources to key activities
Time Cost relationship
• A given Activity is assumed to be performed at
a normal work pace and Normal time, Tn;

• Associated with the Normal Time is Normal

Cost, Cn: the cost of executing the Activity at
normal pace;

• Cost at normal pace is generally the most

efficient - any increase in time for completion of
the Activity will not result in cost reduction.
Time Cost Relationship… ctd.
• Time to complete the activity can be reduced if more
resources are applied in the form of man power,
overtime etc;

• When maximum resources are applied, the duration

is shortened but at increased costs;

• Crash Time, Tc of an Activity is that duration

beyond which time cannot be reduced further;

• Associated with Tc is the Cost Cc

Time Cost Relationship… ctd.
• A simple linear relationship between Time and
Cost is assumed for simplicity; this relationship is
represented in the form of a graph:

Crash
Cc Cost Slope = (Cc – Cn) / (Tc – Tn)
Direct cost of Activity

enables estimation of cost for

every unit of time reduced in
the Activity.

Cn Normal

Tc Tn

Duration of activity
Time Cost Trade off
• Time and Cost are two important items that a Project
Manager deals with . It is necessary to have a
judicious balance between the two. This is called
Time cost trade off
• Some times projects have to be speeded up due to
various reasons.
• This can be done by “crashing” Activities on the
Critical Path. Crashing Activities on Non critical Paths
which have “slack” will only result in extra costs due
to “crashing” without bringing down Project
completion time
Time Cost Trade off

• For the Activities on the Critical Path, the

additional cost required to reduce the time may
vary from Activity to Activity
• Hence the Project Manager has to be selective in
choosing Activities to “crash” so that the
objective of reducing the Project duration is
achieved at minimum extra cost.
• In other words , Critical Activities with smallest
cost slope should be selected for crashing
EXAMPLE
Find out the Critical Path by finding the Slacks
C
2 4
5 F
A
5
9 D 6
1 8
B G
8 5
E 5
3
7

ADG is the Critical Path having no slack.

Project Duration is 22 weeks.
EXAMPLE
9 14 ES EF

LS LF
0 9 12 17
C 14 19
0 9 2 4
5 F 17 22
A
5
9 D 9 17 6
1 8 9 17
B G
5 17 22
0 8 8 E 5
3
2 10 7 8 15 17 22
10 17
ADG is the Critical Path having no slack.
The Project Duration is 22 wks
Example- Cont’d
Activity Tn Cn Tc Cc Cost Slope

A 9 10 6 16 2
B 8 9 5 18 3
C 5 7 4 8 1
D 8 9 6 19 5
E 7 7 3 15 2
F 5 5 5 5 -
G 5 8 2 23 5

Total cost Rs.55K

(Time in weeks and Cost figures in Rs.K)
Example- Cont’d
• If the Project Duration is to be reduced by
2 weeks, Activity A is selected since it has
the lowest cost slope (on the critical path)

• The new Project cost will be 55K + 2x2K=

Rs.59 K with a duration of 20 weeks

• However, reduction of 2 weeks in Activity

A , uses up the slack in the path B-E.

• The Critical Paths will be ADG and BEG

EXAMPLE- cont’d
ES EF
7 12
10 15 LS LF
0 7
C 12 17
0 7 2 4
5 F 15 20
A
5
7 D 7 15 6
1 8 7 15
B G
5 15 20
0 8 8 E 5
3
0 8 7 8 15 15 20
8 15
ADG and BEG are the Critical Paths having no slack.
The Project Duration is 20 wks
 EXAMPLE- cont’d
• How to reduce the Project duration by 1
more week?
• Reduce the duration of both A-D and B-E
paths by one week since both are on Critical
paths
• How to choose the Activities to reduce time
in these paths?
• Choose A and E having lowest cost slope
• Total Project cost will be Rs.59K+ (1x2K) +
(1x2K) = Rs.63K, duration 19weeks
EXAMPLE- cont’d
6 11 ES EF

0 6 9 14
LS LF
C 11 16
0 6 2 4
5 F 14 19
A
5
6 D 6 14 6
1 8 6 14
B G
5 14 19
0 8 8 E 5
3
0 8 6 8 14 14 19
8 14
ADG and BEG are the Critical Paths having no slack.
The Project Duration is 19 wks
EXAMPLE- cont’d

• How to reduce Project duration further?

• No further reduction can be made in A
since it has reached it’s crash time of 6
weeks

• The only way to reduce further is to

reduce the duration of G
EXAMPLE- cont’d

• If the project duration is to be reduced by

another 2 weeks (New Project duration
17 weeks), the Activity to be shortened is
G

• The revised network diagram is in the next

slide
EXAMPLE- cont’d ES EF

6 11 LS LF

0 6 7 12
C 11 16
0 6 2 4 Activity C& F
5 F 12 17 Have slack
A
5 Of 1 week
6
D 6 14 6
1 6 14
B 8 G
0 8 E 3 14 17
8 3 5
0 8 6 8 14 14 17
8 14
ADG and BEG are the Critical Paths having no slack.
Duration of Activity G reduced by 2 weeks. New
Project Duration is 17 wks
Example- Cont’d
• The revised cost of the Project will be: Rs. 63 K
(Cost of Project of duration 19 weeks) + Cost
escalation in Activity G due to speeding up the
Activity by 2 weeks i.e. 2x5K = Rs.73 K

• What happens when the Project duration is to

be reduced to 16 weeks?

• Activity G can be reduced by 1 week since

Activity C & F have a slack of 1 week
EXAMPLE- cont’d ES EF

6 11 LS LF

0 6 6 11
C 11 16
0 6 2 4
5 F 11 16
A
6 5
D 6 14
1 6
8 6 14
B G
0 8 E 2 14 16
8 3 5
0 8 6 8 14 14 16
8 14
ADG and BEG are the Critical Paths having no slack.
Duration of Activity G reduced by 3 weeks.
New Project Duration is 16 wks. C& F becomes critical.
Example- Cont’d

• Activity G reaches “Crash” time beyond

which it cannot be reduced

• All activities become critical - 3 critical

Paths ADG, BEG, ACF

• New cost of Project = 73K+ 1x5K= Rs.78 K

duration of Project: 16weeks.
Example- Cont’d
• How to reduce the Project further to 15 weeks?
• Since there are 3 Critical Paths, all paths have to
be reduced by 1 week
• How will we select the Activities in these paths
to be reduced?
• In Path ACF, A cannot be reduced as it is already
at Tc . F cannot be shortened. Hence, C is
selected. In path ADG, A & G cannot be
shortened any further as they are at Tc. D is
selected. In path BEG, E is selected as it has
lower cost slope than B.
EXAMPLE- cont’d ES EF

6 10 LS LF

0 6 6 10
C 10 15
0 6 2 4
4 F 10 15
A
6 5
D 6 13 6
1 6 13
B 7 G
0 8 E 2 13 15
8 3 5
0 8 5 8 13 13 15
8 13
ADG ,BEG , ACG critical paths.
Duration of Activity C,D &E reduced by 1 week.
New Project Duration is 15 wks.
 Example- cont’d
• Cost of Project (duration 15 weeks) = Cost of
Project duration 16 weeks Rs.78K+ Cost
escalation in C for 1 week 1x1K+ Cost
escalation in D for 1 week 1x5K+ Cost
escalation in E for 1 week 1x2 K= Rs.86 K

• C has reached its Tc and cannot be reduced

any further. So is the case with A & F. So
path ACF which is a critical path which
cannot be reduced any further . So the
minimum project duration is 15 weeks
Total project Cost
• Total costs of a Project comprises of
– Direct costs
• Costs directly associated with individual
activities like Labour, Material
• These are the only costs considered in the
previous example
– Indirect costs
• Administrative and over head charges like
rent, utility expenses in the office,
insurance, equipment
Total project Cost

• Direct costs in a project increases (as we

have seen earlier ) when the project
duration is reduced (e.g.extra man power)

• Indirect costs however increases when the

project duration increases

• The most optimum duration (least cost

duration) of the project is that which
results in minimum Total cost
Total Project cost
Total Project costs

Direct costs optimum

Project costs

Indirect costs
Optimum Project duration

Time weeks
Finding out Optimum Project
duration (Least cost duration)
Find the critical path and the Total Direct costs for
optimum Project duration 4 Project at Tn is
C
Rs.3600K
A 7
1 2
9 D
B 4 Indirect expenses is
at the rate of Rs. 250
5 per week
3

Activity Normal Crash Direct Cost of crashing

Time Tn (Wk) time Tc (wk) (Rs per wk)
A 9 4 300
B 5 2 400
C 7 3 200
D 4 2 200
Finding out Optimum Project
duration (Least cost duration)
LF=18
EF=16
LS=0 LF=9
LS=11 C 4
ES=0 EF=9 ES=9
A EF=18 LF=18
7
1 2
9 D
ES=9 B 4
LS=9 5
ES=14 LS=14
EF=14 3
LF=14

ABD is Critical Path with no Slack for the Activities

 Finding out Optimum Project
duration (Least cost duration
Total Project cost at Tn for 18 weeks Project Duration= 3600 + 18x 250 = 8100

Activity D on Critical Path can be reduced by since it has the lowest Cost slope of Rs
200/ week.
Total project cost for 17 weeks = 3600+1x200 + 17x250= Rs 8050

Total Project cost for 16 weeks of duration is = 3800 + 1x200+ 16x250=Rs 8000

Now both paths ABD and AC have become critical with 16 weeks each

Indirect cost

Direct cost
Finding out Optimum Project
duration (Least cost duration)
BOTH ABD & AC are Critical paths
EF=16 LF=16
ES=0 4
EF=9 C
LS=0 LF=9
A 7
1 2 ES=9
9 LS=9 D
B 2
5 EF=14
ES=LS=14
LF=14 3

Activity Normal Crash Direct Cost of crashing

Time Tn (Wk) time Tc (wk) (Rs per wk)
A 9 4 300
B 5 2 400
C 7 3 200
D 4 2 200
Finding out Optimum Project
duration (Least cost duration
To reduce the duration further, both critical paths will have to be reduced.
Activity D cannot be reduced any further since it is at its Tc.

Two options are available: Crash Activity A OR Crash activities B & C

simultaneously

The cost of crashing A is Rs. 300 per week. Cost of crashing B & C together
is Rs. 400+ 200 = 600. So, we choose crashing A.
(Tc= 4 weeks)

Total Project cost for 15 weeks = 4000+ 1x300+ 15x 250 = 8050
Total Project cost for 14 weeks = 4300+ 1x300+14x250 = 8100
Total Project cost for 13 weeks = 4600+ 1x300 +13x250 = 8150

Direct cost
Indirect cost
Finding out Optimum Project
duration (Least cost duration
Summarizing

Project Duration (weeks) TotaL Cost (Rs.)

18 8100
17 8050
16 8000
15 8050
14 8100

16 weeks is the most optimum duration

Crashing Illustration – A SECOND EXAMPLE
For Self Pursuit
 CPM Model
Crashing Illustration – A SECOND EXAMPLE For Self Pursui

Exh 19.30 (Indirect cost is Rs 2000/- per week)

Exh 19.31 – normal duration. Crash one-by-one, don’t repeat already crashed activity (1-
2-4-6-7)

Original cost 45,200, Duration 30 weeks (Exh 19.30)

Exh 19.32 – Act 2-4 crashed (12567)
Exh 19.33 – Act 5-6 crashed(12467)
Exh 19.34 – Act 1-2 crashed (13567)
Exh 19.35 – Act 6-7 crashed (13567) and (1357)
Exh 19.36 – Act 3-5 crashed (12467) Least Cost
Exh 19.37 – Act 4-6 crashed (12467) Least time
Final cost 57,600 and Duration 19.5 weeks (Exh 19.38)
19.36 minimises cost, 19.37 minimises time. Decision can depend on resources available

March 29, 2020 34

March 29, 34
34
 CPM Model
Crashing Illustration

Exh 19.30

(Indirect cost is Rs 2000/- per week)

Original cost 45,200, Duration 30 weeks
 CPM Model
Crashing Illustration

Exh 19.31 – normal duration. Crash one-by-one, don’t repeat already crashed
activity
 CPM Model
Crashing Illustration

Exh 19.32 – Act 2-4 crashed

 CPM Model
Crashing Illustration

Exh 19.33 – Act 5-6 crashed

 CPM Model

Crashing Illustration

Exh 19.34 – Act 1-2 crashed

 CPM Model
Crashing Illustration

Exh 19.35 – Act 6-7 crashed (missed out in diagram)

March 29, 2020 40

 CPM Model
Crashing Illustration

Exh 19.36 – Act 3-5 crashed

 CPM Model
Crashing Illustration

Exh 19.37 – Act 4-6 crashed

 CPM Model
Crashing Illustration

Final cost 57,600 and Duration 19.5 weeks (Exh 19.38)

19.36 minimises cost, 19.37 minimises time. Decision can depend on resources available