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Accelerating the project
Edina NagyLajos Kiss
Szabolcs Hornyák
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Overview
• Introduction• Project acceleration terminology
Normal Time, normal costCrash Time, crash costDirect Costs Indirect CostsTotal Project CostOptimum Project Duration
• Project acceleration principles• References
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„When I know all information, only can make a right decisions.”
Paulo Coelho
Introduction
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Steps of right decision:
Definiate: Time and costsAnalysed the possibilitiesCompare the opportunitiesChoose the best way
Introduction
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Project acceleration terminology
Normal Time, normal costThis is the usual time that would be needed to carry out the electrical services work under normal circumstances, estimated at 12 days with a cost of £10.000.
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Project acceleration terminology
Crash Time, crash costThe crash time is the maximum time the
operation can be compressed by increasing the resources.
Crash time: 8 daysCrash cost: £18.000
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Project acceleration terminology
Cost Slope
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Project acceleration terminology
Activity ranking• Analysed the precedence
relationship• Identified the critical
activities• Ranking by the cost• Reduce the duration• Define the critical path
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Project acceleration terminology
Direct costs:• Labour• Plants• Materials• Subcontractors• Overheads and profit
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Project acceleration terminology
Indirect costs:• Project supervision• Site hutting and
accomodation• Site office telephones,
heating and lighting• Vans and site transport
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Project acceleration terminology
Direct costs + Indirect costs
Total cost
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Optimum project duration
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Project acceleration principles
Example – based on a network arrow diagram
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Project acceleration principles
Project datas
PROJECT DATA
Activity Normal Time Normal Cost Crash Time Crash Cost
A 6 12 000 4 20 000
B 8 24 000 4 48 000
C 3 18 000 2 20 000
D 6 18 000 4 24 000
E 6 36 000 4 54 000
F 10 10 000 6 50 000
G 5 20 000 3 30 000
H 8 40 000 6 50 000
I 2 20 000 2 20 000
Summation £198 000
Indirect costs £2000 per week
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Project acceleration principles
Normal time / Normal Cost analysis
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Project acceleration principles
Normal time / Normal Cost analysis
Cost Slope Assessment
Activity Normal Time Crash Time Saving in Time Normal Cost (£000)
Crash Cost (£000)
Increase in Cost (£000) Cost Slope Float Order/ Ranking
A 6 4 2 12 20 8 4000 Zero 2nd
E 6 4 2 36 54 18 9000 Zero 3rd
F 10 6 4 10 50 40 10000 Zero 4th
D 6 4 2 18 24 6 3000 Zero 1st
B 8 4 4 24 48 24 6000 5
Non critical operations
G 5 3 2 20 30 10 5000 3
H 8 6 2 40 50 10 5000 3
I 2 2 0 20 20 0 0 5
C 3 2 1 18 20 2 2000 5
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Project acceleration principles
Revised arrow diagram
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Project acceleration principles
Activity Normal Time (weeks)
Crash Time (weeks) Reduction in Time (weeks) Cost slope (£) Increase in direct
cost (£)
D 6 4 2 3000 6000
A 6 4 2 4000 8000
E 6 5 1 9000 9000
Reduction in overall time = 5
Increase in direct cost due to this reduction in time = 23000
Total Project Costs at week 23.Direct costs = £198 000 + £23 000 = £221 000
Indirect costs = 23 weeks x £2 000 = £46 000Total Project Cost £267 000
Therefore, in order to achieve an acceleration of 5 weeks, the project cost will be increased by £13 000, that is:Crash Cost = £267 000Less Normal Cost = £254 000Acceleration Cost = £13 000
Reduction in project period
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References
- pp. 186-196Paragraph 9.9Accelerating the project
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Thanks…