chapter 03 project management[1]
TRANSCRIPT
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OPERATIONS & PRODUCTION OPERATIONS & PRODUCTION MANAGEMENT MANAGEMENT
Chapter: 03
PROJECTMANAGEMENT
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Chapter Layout:Chapter Layout:Defining Project & 3‐Phases of Project.
Project Management
Project Planning
Work Break Structure.
Project Scheduling
Gantt Chart.
Project Controlling
( PERT & CPM ).
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Chapter Layout Chapter Layout ……Cont.Cont.
Calculating Slack Time and Identifying the Critical Paths.
Numerical
Variability in Activity Times
Three Time Estimates in PERT
Probability of Project Completion
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PROJECT MANAGEMENT
Chapter: 03
DEFINITIONS
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WHAT IS PROJECT ?????WHAT IS PROJECT ?????DEFINITION
Project is an unique activity, with specific objective has to completed in a determined time frame and incurred cost.
CHARACTERISTICS OF PROJECT1.
UNIQUENESS2.OBJECTIVITY 3.TIME FRAME4.COST
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DEFINING PROJECT MANAGEMENTDEFINING PROJECT MANAGEMENT:
1st Definition“ Project management is the process of planning and directing a project from itsinception to its completion at a giventime and at a given cost for a given endproduct.” .
PROBLEM IN‐FLEXIBILITY
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2nd Definition“ PROJECT MANAGEMENT PLANS AND
DIRECT THE PROCESS OF COMPLETION OF A
PROJECT TO ENABLE IT TO REACH THE
BEST POSSIBLE WAY, THE BEST POSSIBLE
RESULTS AND THE INTENDED OBJECTIVE OF
THE PROJECT. ”
DEFINING PROJECT MANAGEMENTDEFINING PROJECT MANAGEMENT:
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PROJECT MANAGEMENT
Chapter: 03
PROJECT
PRIORITIES
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PROJECT PRIORITIESPROJECT PROJECT
PRIORITIESPRIORITIES
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PROJECT SCOPE:PROJECT SCOPE:Terms and Definitions
SCOPE STATEMENTSAlso called statements of work (SOW)
1. To clearly define the deliverables for the end user.
2. To focus the project on successful completion of its goals.
PROJECT CREEPThe tendency for the project scope to expand
over time due to changing requirements, specifications, and priorities.
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PROJECT MANAGEMENT
Chapter: 03
PHASES OF PROJECT
MANAGEMENT
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Planning Planning ObjectivesObjectives
ResourcesResources
Work break Work break - - downdownschedulescheduleOrganizationOrganization
Scheduling Scheduling Project activitiesProject activities
Start & end timesStart & end times
Network Network
Controlling Controlling Monitor, compare, revise, actionMonitor, compare, revise, action
33‐‐PHASES OF PROJECT MGT.PHASES OF PROJECT MGT.
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PROJECT PLANNING, SCHEDULING, PROJECT PLANNING, SCHEDULING, AND CONTROLLING.AND CONTROLLING.
BeforeBefore Start of p roject Start of project During During project project TimelineTimeline project project
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PROJECT PLANNINGPROJECT PLANNINGWork Breakdown Structure (WBS)
An hierarchical outline (map) that identifies the
products and work elements involved in a project.
Defines the relationship of the final deliverable (the
project) to its sub deliverables, and in turn, their
relationships to work packages.
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HIERARCHICAL BREAKDOWN OF THE WBS
HIERARCHICAL HIERARCHICAL BREAKDOWN BREAKDOWN
OF THE WBSOF THE WBS
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WORK PACKAGESWORK PACKAGESA work package is the lowest level of the WBS.
It is output ‐oriented :1. Defines work (what).2. Identifies time to complete a work package (how
long)3. Identifies a time ‐phased budget to complete a work package (cost).
4. Identifies resources needed to complete a work package (how much).5. Identifies a single person responsible for units of work
(who).6. Identifies monitoring points (milestones) for
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BeforeBefore Start of project Start of project During During project project TimelineTimeline project project
PROJECT PLANNING,
SCHEDULING,
PROJECT PLANNING, SCHEDULING, AND CONTROLLING.AND CONTROLLING.
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BeforeBefore Start of project Start of project During During project project TimelineTimeline project project
PROJECT PLANNING,
SCHEDULING,
PROJECT PLANNING, SCHEDULING, AND CONTROLLING.AND CONTROLLING.
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BeforeBefore Start of project Start of project During During project project TimelineTimeline project project
PROJECT PLANNING, SCHEDULING, PROJECT PLANNING, SCHEDULING, AND CONTROLLING.AND CONTROLLING.
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PROJECT MANAGEMENT
Chapter: 03
PROJECTNETWORKING
TECHNIQUES.
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Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)
A comes beforeB, which comesbefore C
(a) A B C B A C
A and B must bothbe completed before C can start
(b) A
C C
B
A
B
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Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)
B and C cannot
begin until A iscompleted (c)
B
AC
A BC
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PERTPERT AND AND CPM CPM TECHNIQUES.TECHNIQUES.Network techniques
Developed in
1950’s
1. CPM by DuPont for chemical plants (1957)
2. PERT by Booz, Allen & Hamilton with the U.S. Navy, for Polaris missile (1958)
Consider precedence relationships and interdependencies
Each uses a different estimate of activity times.
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S.NO PERT CPM1 TIME FOCUS TIME & COST FOCUS
2 FIRST TIMEPROJECT
REPEATED PROJECT
3 ASK TOKNOWLEDGEABLE PERSON
TRACK RECORD ORPAST HISTORY.
4 3 – TIMEESTIMATES
ONE TIMEESTIMATE.
A COMPARISON
OF
A
COMPARISON
OF
PERTPERT AND
AND
CPM CPM TECHNIQUES.TECHNIQUES.
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PROJECT MANAGEMENT
Chapter: 03
PRACTICAL
PROJECT
MANAGEMENT
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AON Example
AON
Example
Activity DescriptionImmediate
Predecessors A Build internal components —
B Modify roof and floor —
C Construct collection stack A
DPour
concrete
and
install
frame
A, B
E Build high ‐temperature burner C
F Install pollution control system C
G Install air pollution device D, EH Inspect and test F, G
PAKISTAN PAPERSACK CORPORATION LTD.PAKISTAN PAPERSACK CORPORATION LTD.BalochistanBalochistan
Activities and Predecessors Activities and Predecessors
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A
Start
BStart Activity
Activity A(Build Internal Components)
Activity B(Modify Roof and Floor)
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C
D
A
Start
B
Activity A Precedes Activity C
Activities A and BPrecede Activity D
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G
E
F
H
C A
Start
DB
Arrows Show PrecedenceRelationships
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Variability in Activity TimesVariability in Activity Times
CPM assumes we know a fixed time estimate for each activity and there
is no variability in activity timesPERT uses a probability
distribution for activity times to allow for variability
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Variability in Activity TimesVariability in Activity Times
Expected time:Expected time:
Variance of times:Variance of times:
t =t = ((a +a + 44mm ++ bb )/6)/6
v =v = [([(bb – – aa )/6])/6] 22
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Variability in Activity TimesVariability in Activity TimesMost Expected
Optimistic Likely Pessimistic Time Activity a m b t = (a + 4m + b )/6
A 1 2 3 2B 2 3 4 3C 1 2 3 2D 2 4 6 4E 1 4 7 4F 1 2 9 3G 3 4 11 5
H 1 2 3 2
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Determining the Project ScheduleDetermining the
Project
Schedule
Perform a Critical Path AnalysisPerform a Critical Path Analysis
Activity Description Time (weeks) A Build internal components 2B Modify roof and floor 3C Construct collection stack 2D Pour concrete and install frame 4E Build high-temperature burner 4
F Install pollution control system 3G Install air pollution device 5H Inspect and test 2
Total Time (weeks) 25
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Table 3.2Table 3.2
Perform a Critical Path AnalysisPerform a Critical Path AnalysisDETERMINING THE PROJECT SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
Activity Description Time (weeks) A Build internal components 2 B Modify roof and floor 3C Construct collection stack 2 D Pour concrete and install frame 4E Build high-temperature burner 4
F Install pollution control system 3G Install air pollution device 5 H Inspect and test 2
Total Time (weeks) 25
Earliest start (ES) =earliest time at which an activity canstart, assuming all predecessors havebeen completed
Earliest finish (EF) = earliest time at which an activity canbe finished
Latest start (LS) = latest time at which an activity canstart so as to not delay the completiontime of the entire project
Latest finish (LF) = latest time by which an activity has tobe finished so as to not delay the
completion time of the entire project
PROJECT
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PROJECT MANAGEMENT
Chapter: 03
DESIGNING
PROJECT
NETWORK
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Perform a Critical Path AnalysisPerform a Critical Path AnalysisDETERMINING THE PROJECT SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
A
Activity Nameor Symbol
Earliest Start ES Earliest FinishEF
Latest Start
LS Latest Finish
LF
Activity Duration
2
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Perform a Critical Path AnalysisPerform a Critical Path AnalysisDETERMINING
THE
PROJECT
SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
B
3
Start 0
0
0
A
2
20
3
EF of B =ES of B + 3
0
ES of B
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Perform a Critical Path AnalysisPerform a Critical Path AnalysisDETERMINING
THE
PROJECT
SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
C
2
2 4
B
3
0 3
Start 0
0
0
A
2
20
D
4
73
= Max (2, 3)
FORWARD PASS
FORWARD FORWARD PASSPASS
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Perform a Critical Path AnalysisPerform a Critical Path AnalysisDETERMINING
THE
PROJECT
SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
D
4
3 7
C
2
2 4
B
3
0 3
Start 0
0
0
A
2
20
FORWARD
PASS
FORWARD FORWARD
PASSPASS
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Perform a Critical Path AnalysisPerform a Critical Path AnalysisDETERMINING
THE
PROJECT
SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
D
4
3 7
C
2
2 4
B
3
0 3
Start 0
0
0
A
2
20
FORWARD PASS
FORWARD FORWARD PASSPASS
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Perform a Critical Path AnalysisPerform a Critical Path AnalysisDETERMINING
THE
PROJECT
SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
D
4
3 7
C
2
2 4
B
3
0 3
Start 0
0
0
A
2
20
LF = EF of Project
1513
LS = LF – Activity time
BACKWARD PASS
BACKWARD BACKWARD PASSPASS
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Perform a Critical Path AnalysisPerform a Critical Path AnalysisDETERMINING
THE
PROJECT
SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
13 15
D
4
3 7
C
2
2 4
B
3
0 3
Start 0
0
0
A
2
20
LF = Min(LS of
following activity)
10 13
BACKWARD PASS
BACKWARD BACKWARD
PASSPASS
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Perform a Critical Path AnalysisPerform a Critical Path AnalysisDETERMINING
THE
PROJECT
SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
13 15
10 13
8 13
4 8
D
4
3 7
C
2
2 4
B
3
0 3
Start 0
0
0
A
2
20
42
84
20
41
00
BACKWARD
PASS
BACKWARD BACKWARD PASSPASS
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Critical Path And Slack TimesCritical Path And Slack Times Analysis AnalysisDETERMINING
THE
PROJECT
SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
13 15
10 13
8 13
4 8
D
4
3 7
C
2
2 4
B
3
0 3
Start 0
0
0
A
2
20
42
84
20
41
00
Slack Slack = 1= 1 Slack Slack = 1= 1
Slack Slack = 0= 0 Slack Slack = 6= 6
Slack Slack = 0= 0
Slack Slack = 0= 0
Slack Slack = 0= 0
Slack Slack = 0= 0
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Perform a Critical Path AnalysisPerform a Critical Path AnalysisDETERMINING
THE
PROJECT
SCHEDULEDETERMINING
THE
PROJECT
SCHEDULE
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
13 15
10 13
8 13
4 8
D
4
3 7
C
2
2 4
B
3
0 3
Start 0
0
0
A
2
20
42
84
20
41
00
PROJECT Chapter: 03
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PROJECTMANAGEMENT
Chapter: 03
DESIGNINGPROJECT GANTT
CHART.
GANTTCHART
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GANTT CHART
GANTT CHART
AA Build internalBuild internalcomponentscomponents
BB Modify roof and floorModify roof and floor
CC Construct collectionConstruct collectionstackstack
DD Pour concrete andPour concrete andinstall frameinstall frame
EE Build highBuild high --temperaturetemperatureburnerburner
FF Install pollution controlInstall pollution controlsystemsystem
GG Install air pollutionInstall air pollutiondevicedevice
HH Inspect and testInspect and test
11 22 33 44 55 66 77 88 99 1010 1111 1212 1313 1414 1515 1616
PAKISTAN PAPERSACK CORPORATION PAKISTAN PAPERSACK CORPORATION LTD. BalochistanLTD. Balochistan
GANTTCHARTGANTTCHART
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GANTT CHARTGANTT CHART
AA Build internalBuild internalcomponentscomponents
BB Modify roof and floorModify roof and floor
CC Construct collectionConstruct collectionstackstack
DD Pour concrete andPour concrete andinstall frameinstall frame
EE Build highBuild high --temperaturetemperatureburnerburner
FF Install pollution controlInstall pollution controlsystemsystem
GG Install air pollutionInstall air pollutiondevicedevice
HH Inspect and testInspect and test
11 22 33 44 55 66 77 88 99 1010 1111 1212 1313 1414 1515 1616
PAKISTAN PAPERSACK CORPORATION PAKISTAN PAPERSACK CORPORATION LTD. BalochistanLTD. Balochistan
PROJECT Chapter: 03
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PROJECTMANAGEMENT
Chapter: 03
PROBABILITY OFCOMPLETION
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PROBABILITY OF COMPLETION PROBABILITY OF COMPLETION
Expected time:Expected time:
Variance of times:Variance of times:
t =t = ((a +a + 44mm ++ bb )/6)/6
v =v = [([(bb – – aa )/6])/6] 22
Variability in Activity TimesVariability in Activity Times
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Variability in Activity TimesVariability in Activity TimesMost Expected
Optimistic Likely Pessimistic Time Activity a m b t = (a + 4m + b )/6
A 1 2 3 2B 2 3 4 3C 1 2 3 2D 2 4 6 4
E 1 4 7 4F 1 2 9 3G 3 4 11 5
H 1 2 3 2
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Variability in Activity TimesVariability in Activity TimesMost Expected
Optimistic Likely Pessimistic Time Variance Activity a m b t = (a + 4m + b )/6 [(b – a)/6] 2
A 1 2 3 2 .11B 2 3 4 3C 1 2 3 2 .11D 2 4 6 4
E 1 4 7 4 1.00F 1 2 9 3G 3 4 11 5 1.78
H 1 2 3 2 .11
Computing VarianceComputing Variance
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PROBABILITY OF PROJECT PROBABILITY OF PROJECT COMPLETIONCOMPLETION
Project variance is computed by Project variance is computed by summing the variances of critical summing the variances of critical activitiesactivities
σ22
= Project variance= Project variance== ∑ ((variances of activitiesvariances of activities
on critical pathon critical path ))
p
PROBABILITYOF PROJECTPROBABILITYOF PROJECT
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PROBABILITY OF PROJECT PROBABILITY OF PROJECT COMPLETIONCOMPLETION
Project variance is computed by Project variance is computed by summing the variances of critical summing the variances of critical activitiesactivities
Project varianceσ 2 = .11 + .11 + 1.00 + 1.78 + .11 = 3.11
Project standard deviation
σ p = Project variance= 3.11 = 1.76 weeks
p
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PROBABILITY OF
PROJECT
PROBABILITY
OF
PROJECT
COMPLETIONCOMPLETION
PERT makes two more assumptions:PERT makes two more assumptions:
Activity times are statistically Activity times are statistically independent independent Total project completion timesTotal project completion timesfollow a normal probability follow a normal probability distributiondistribution
PROBABILITYOF PROJECTPROBABILITYOF PROJECT
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Standard deviation = 1.76 weeks
15 Weeks
(Expected Completion Time)Figure 3.13
PROBABILITY OF PROJECT PROBABILITY OF PROJECT COMPLETIONCOMPLETION
PROBABILITYOF PROJECTPROBABILITY OF PROJECT
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What is the probability this project canWhat is the probability this project canbe completed on or before thebe completed on or before the 1616 week week deadline? deadline?
Z Z == – – / / σ p p
== (16(16 wkswks – – 1515 wkswks )/1.76)/1.76
== 0.570.57
duedue
expected dateexpected date
datedate of completionof completion
Where Z is the number of standard deviations the duedate or target date lies from
the mean or expected date
PROBABILITY OF PROJECT PROBABILITYOF PROJECTCOMPLETIONCOMPLETION
PROBABILITYOF PROJECTPROBABILITY OF PROJECT
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PROBABILITY OF PROJECT PROBABILITYOF PROJECTCOMPLETIONCOMPLETIONWhat is the probability this project canWhat is the probability this project can
be completed on or before the 16 week be completed on or before the 16 week deadline? deadline?
Z Z ==−
−
/ / σ p p
== (16(16 wkswks −− 1515 wkswks )/1.76)/1.76
== 0.570.57
due expected datedate of completion
Where Z is the number of standard deviations the duedate or target date lies from
the mean or expected date
.00 .01 .07 .08
.1 .50000 .50399 .52790 .53188
.2 .53983 .54380 .56749 .57142
.5 .69146 .69497 .71566 .71904
.6 .72575 .72907 .74857 .75175
From Appendix I
PROBABILITY OF PROJECT PROBABILITY OF PROJECT
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Time
Probability (T ≤ 16 weeks)is 71.57%
Figure 3.14
0.57 Standard deviation s
15 16 Weeks Weeks
PROBABILITYOF PROJECTPROBABILITYOF PROJECTCOMPLETIONCOMPLETION
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PROJECT CRASHING
1. Compute the crash cost per time period. If
crash costs are linear over time :
Crash cost Crash cost
per period per period ==
(Crash cost (Crash cost – – Normal cost)Normal cost)
(Normal time(Normal time – – Crash time)Crash time)
2. Using current activity times, find the critical path and identify the critical activities
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Time (Wks) Cost ($) Activity Normal Crash Normal Crash
A 2 1 22,000 22,750B 3 1 30,000 34,000
C 2 1 26,000 27,000D 4 2 48,000 49,000E 4 2 56,000 58,000
F 3 2 30,000 30,500G 5 2 80,000 84,500H 2 1 16,000 19,000
PROJECT CRASHING
TOTAL PROJECT COST = 308,000
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Time (Wks) Cost ($) Crash Cost Activity Normal Crash Normal Crash Per Wk ($)
A 2 1 22,000 22,750 750
B 3 1 30,000 34,000 2,000C 2 1 26,000 27,000 1,000D 4 2 48,000 49,000 1,000E 4 2 56,000 58,000 1,000F 3 2 30,000 30,500 500G 5 2 80,000 84,500 1,500H 2 1 16,000 19,000 3,000
PROJECT CRASHING
OTAL PROJECT COST = 308,000
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Time (Wks) Cost ($) Crash Cost Critical Activity Normal Crash Normal Crash Per Wk ($) Path?
A 2 1 22,000 22,750 750 YesB 3 1 30,000 34,000 2,000 NoC 2 1 26,000 27,000 1,000 YesD 4 2 48,000 49,000 1,000 NoE 4 2 56,000 58,000 1,000 Yes
F 3 2 30,000 30,500 500 NoG 5 2 80,000 84,500 1,500 YesH 2 1 16,000 19,000 3,000 Yes
PROJECT CRASHING
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| | |
11 2 2 Time (Weeks)Time (Weeks)
$22,750$22,750 —
—
$22,375$22,375 —
—
$22,000$22,000 —
—
Activity Activity Cost Cost CrashCrash
Normal Normal
Crash TimeCrash Time Normal TimeNormal Time
CrashCrash
Cost Cost
Normal Normal Cost Cost
Crash Cost/Wk Crash Cost/Wk == Crash Cost Crash Cost – – Normal Cost Normal Cost Normal TimeNormal Time – – Crash TimeCrash Time
== $22,750$22,750 – – $22,000$22,000
22 – – 11= = $750/Wk= = $750/Wk$750$750
1 Wks1 Wks
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Time (Wks) Cost ($) Activity Normal Crash Normal Crash
A 2 1 22,000 22,750B 3 1 30,000 34,000C 2 1 26,000 27,000D 4 2 48,000 49,000E 4 2 56,000 58,000F 3 2 30,000 30,500G 5 2 80,000 84,500H 2 1 16,000 19,000
PROJECTCRASHING
TOTAL PROJECT COST = 308,000 + 750 = 308,750 $
TOTAL PROJECT DURATION = 15 + 01 = 16 Wks
PROJECT Chapter: 03