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Time-Cost Trade-Off in Project Crashing: A Case Study on Construction Contract Optimization

This document outlines a project planning and control example focusing on the time-cost trade-off involved in project crashing. It provides an analysis of a construction contract, detailing activity durations and costs under normal and crash conditions. The goal is to establish the least cost for expediting the contract and to determine the optimum contract duration while considering indirect costs. Through a series of steps, the critical path is identified and adjusted, leading to cumulative cost increases as activities are crashed to achieve a faster project completion.

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Time-Cost Trade-Off in Project Crashing: A Case Study on Construction Contract Optimization

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  1. Faculty of Applied Engineering and Urban Planning Civil Engineering Department 2nd Semester 2010/2011 ECCS5209 Project Planning & Control Example Eng: Ismail Zakaria Al Daoor

  2. Project Crashing

  3. Time-Cost Trade-Off ( Project Crashing ) Example The durations and direct costs for each activity in the network of a small construction contract under both normal and crash conditions are given in the following table. Establish the least cost for expediting the contract. Determine the optimum duration of the contract assuming the indirect cost is LE 125/day.

  4. 20 12 D(23) 24 12 0 12 12 20 20 25 27 47 59 47 A(0) B(8) E(5) G(20) I(12) 0 12 14 22 22 27 27 47 47 59 2@100 2@150 1@50 5@60 2@75 12 27 27 32 32 45 C(15) F(5) H(13) 12 27 29 34 34 47 3@200 1@300 2@40 Act. N.D C.D ∆.D C.C. N.C ∆.C Slop A 12 10 2 7200 7000 200 100 B 8 6 2 5300 5000 300 150 C 15 12 3 4600 4000 600 200 D 23 23 0 5000 5000 0 0 E 5 4 1 1050 1000 50 50 F 5 4 1 3300 3000 300 300 CPM = A-C-G-I G 20 15 5 6300 6000 300 60 H 13 11 2 2850 2500 350 175 I 12 10 2 3150 3000 150 75

  5. Time-Cost Trade-Off ( Project Crashing ) 1. The activity on the critical path with the lowest cost slope is G, this activity can be crashed by 5 days, but if it is crashed by more than 2 days another critical path will be generated. Therefore, activity G will be crashed by 2 days only. Then adjust timing of the activities. A new critical path will be formed, A-C-F-H-I. New contract duration is 57 days. The cost increase is 2 x 60 = LE 120.

  6. Time-Cost Trade-Off ( Project Crashing ) 2. At this step the activities that can be crashed are listed below: Either A at cost LE 100/day Or C at cost LE 200/day Or I at cost LE 75/day Or F & G at cost LE 360/day Or H & G at cost LE 100/ day Activity I is chosen because it has the least cost slope, and it can be crashed by 2 days. Because this is last activity in the network, it has no effect on other activities. New contract duration is 55 days. The cost increase is 2 x 75 = LE 150. Cumulative cost increase = 120 + 150 = LE 270

  7. Time-Cost Trade-Off ( Project Crashing ) 3. Now, we could select A or both H & G, because they have the same cost slope. Activity A is chosen to be crashed. This will change the timings for all activities, but no new critical path will be formed. New contract duration is 53 days. The cost increase is 2 x 100 = LE 200. Cumulative cost increase = 270 + 200 = LE 470

  8. Time-Cost Trade-Off ( Project Crashing ) 4. Now, activities H & G can be crashed by 2 days each. A new critical path A-B-D-I will be formed. New contract duration is 51 days. The cost increase is 2 x 100 = LE 200. Cumulative cost increase = 470 + 200 = LE 670

  9. Time-Cost Trade-Off ( Project Crashing ) 5. At this stage, the network have three critical paths. The activities that can be crashed are listed below: Either C & B at cost LE 350/day Or F, G & B at cost LE 510/day Activities C & B are chosen because they have the least cost slope. New contract duration is 49 days. The cost increase is 2 x 350 = LE 700. Cumulative cost increase = 670 + 700 = LE 1370 Now, there is no further shortening is possible.

  10. Time-Cost Trade-Off ( Project Crashing ) The contract duration and the corresponding cost are given in the table below.

  11. Time-Cost Trade-Off ( Project Crashing )

  12. Question

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