EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Question
Chapter 18, Problem 5DQ
Summary Introduction
Interpretation: Whether the assumption that the cost of crashing an activity is linearly proportional to the amount of time that activity is crashed is reasonable along with reasons and the way economies and diseconomies of scale address this issue.
Concept Introduction:
During the crashing of a project, the duration of the project is shortened by reducing the time of one or more critical activity.
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There are four critical paths in a network. A-B-C-D-E, A-F-E, A-B-H-J-K-E and A-S-T-E. Each activity in this network can be crashed by a maximum of 4 weeks. The crashing cost (per week), for the first week (crashing first time), for activity A is: $400, E is $415 and all other activities is : $100 (per week per activity). The crashing cost, second week and onwards(crashing second time), for activity A is $1000 per week, E is $1200 per week and for all other activities is $200 per activity per week. You have a maximum crashing budget of $2505. The maximum possible reduction in the project duration will be:
a. 2 weeks
b. 3 weeks
c. 4 weeks
d. 5 weeks
e. 6 weeks
You company has just received an order for SPEEDY 1 electric motor from a customer. The data on direct
costs, activity duration, and precedence relationships are given below:
Activity
Normal Time (days)
Normal Cost
Crash Time (days)
Crash Cost
Predecessor(s)
A
4
$1000
3
$1300
B
7
1400
2000
2000
4
2700
D
6.
1200
5.
1400
A
3
900
2
1100
B
F
11
2500
3750
G
4
800
3
1450
D, E
3
300
500
F, G
H
f) Nonetheless, the contract states that starting on the thirteenth day from now, your firm will experience
a penalty of $100 per day if the job is not completed. Indirect project costs amount to $200 per day.
What completion date would you recommend? Show your computation.
The client of a project has requested the project team to crash 8 hours of time. The table below provides the necessary information about the possible project crashing. (a) What is the crash cost for 8 hours of time-savings?(b) Assume the team calls the client and asks for a project extension, reducing the amount of time they need to crash. The project team has a $20 crash budget. Is the budget sufficient to crash 4 hours of time?
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