Chapter 5

Project management
In many situations managers assume the responsibility for planning, scheduling, and controlling
projects that consist of numerous separate jobs or tasks performed by a variety of departments,
groups or individuals, etc. often these projects are so large and/or complex that the manager
cant possibly keep all the information pertaining to the plan, schedule and progress of the
project in his or her head. In this situations the project management techniques of pert (Program
Evaluation and Review-technique) and CPM (Critical path method) have proven to be extremely
valuable in assisting managers in carrying out their project management responsibilities. What is
project management then? It is a method of planning, scheduling, coordinating and controlling
projects that consist of a number of activities performed by departments, groups, individuals,
etc.
Project scheduling with PERT/CPM
Project managers must schedule and coordinate the various jobs or activities so that the entire
project is completed on time. A complicating factor in carrying out this task is the
interdependence of the activities where the start of some activities depends up on the
completion of other activities. PERT and CPM are two of the most widely used techniques for
planning and coordinating large scale projects. By using PERT or CPM, managers are able to
obtain: a graphical display of project activities, an estimate of how long the project will take an
indication of which activities are the most critical to timely completion of the project, an
indication of how long any activity can be delayed without lengthening the project duration. PERT
and CPM were developed independently during the late 1950s. Although they were developed
independently, they have a great deal in common. At present, either technique can be used in
with deterministic or probabilistic time. The discussions will proceed along the lines of PERT,
particularly with respect to construction of precedence networks. Nonetheless, as a general rule
the procedures will apply to CPM analysis as well to PERT analysis of projects.
The network diagram: One of the main features of PERT and related techniques is their use of
a network or precedence diagram to depict major project activities and their sequential
relationships. The first step in the PERT/CPM project scheduling process is the determination of
the specific activities that will make up the project. Activities are specific jobs or tasks that are
components of the project. Example: consider the activity list for a sample project
Activity
A
B
C
D

Activity description
Develop a list of sources for finance
Analysis the financial record of the business
Develop a business plan
Submit a proposal to a lending institution

Immediate predecessors
B
A, C

Draw a network diagram for the project activities `

A

Ending

Beginning
B

This network diagram shows the precedence relationship among the activities. Activities are
shown on arrows of the network. The cavils or modes correspond to the beginning and ending of
each activity. The completion of all activities that leads in to a node is referred to as an event. Eg.
Note 2 corresponds to the event that activity B has been completed and node 3 corresponds to
the event that both activities A and C have been completed.
A

B will be started if A is completed

C

C will be started if both A & B are completed

A
B
C
B

C&D will be started if B is completed

C
C&D are started if A&B are completed
B

Let us consider the following and develop a network model

Activity

Immediate predecessor

A
B
C
D
E
F
G

B
A, C
C
C
D, E, F
D

G
E

Dummy

F
B

For reference purposes, nodes typically are

numbered from left to right.

Dummy

Activities can be classified in to:

1. Preceding activity: is a prerequisite activity. Eg. A&C precede D

2. Succeeding activity: the activity coming next. Eg. C is successor of B

3. Concurrent activities: are activities that can be carried out simultaneously. Eg activities A
& B in the above diagram.

4. Dummy activity: is not an actual activity but a fictitious activity that is introduced to
ensure the correct precedence relationships among the activities. It doesnt have any time
requirement. It is used to avoid the confusion of two or more activities having the same
starting and ending nodes. The insertion of a dummy activity correctly shows activities A &
C as the immediate predecessors for activity D, activities D, E and F as immediate
predecessors of activity G. Two activities cant have the same head and the same tail. The
two activities can have the same head but different tails or the same tail but different
heads.
A
Such a case is impossible
B
A
B

Dummy

Such cases are possible

A
Dummy

Eg. Suppose in a certain project, jobs A and B must precede job C while job E is preceded only by
job B.
A
B

C
Dummy

Constructing network diagrams

Example 1. Draw a network diagram for the following activities
Activity
A
B
C
D
E
F
G
H
I

Immediate predecessors
B
C
D, E
B
H, F

Solution:
D
A
start node

A
G
B

E
F

End node
H

Example 2. Draw a network arrow diagram for the project with the following activities
Activity

Immediate predecessors

A
B
C
D
E
F
G
H

None
A
A
B, C
C
D
E
F, G

Solution:

D
B

Dummy

G
E

When two activities have the same beginning and ending nodes, a dummy node and activity are
used in order to preserve the separate identity of each activity and to clarity relationships.
Project scheduling (PERT/CPM)
This relates to time estimation for activities a given project. There are two types of time
estimates for activities of a project:
1. Deterministic time estimates- are used when the projects activity time estimates can
be made with a high degree of confidence that actual times will not differ significantly.
2.

Probabilistic time estimates- are used when the activity time estimates are subject to
variations. These time estimates must include an indication of the extent of probable
variation.

Network

analysis

with

deterministic

time

estimates

the

critical

path

method

(PERT/CPM)
Path- is a sequence of activities that leads from the starting node to the finishing node.
Critical path- is the longest path equal to the project duration. It is made up of the critical
activities whose dearly would postpone the project duration.
Example1: Given the information (time in weeks) in the following network diagram, determine
a) The length of each path

b) The critical path

c) The expected length of the project
d) The amount of slack time for each path.

6
8

11

3
1

9
-

Solution: (The start and end activities have no times - they merely serve as reference points.)
a. As shown in the table below, the path lengths are 18 weeks, 20 weeks, and 14 weeks.
b. The longest path (20 weeks) is 1- 2 5 - 6, so it is the critical path.
c. The expected length of the project is equal to the length of the critical path (i.e., 20
weeks).

d. The slack for each path is found by subtracting its length from the length of the critical
path, as shown in the last column of the table. Note: some times it is desirable to know the
stack time associated with individual activities. The next section describes a method for
obtaining those stack times.
Path

length (weeks)

1- 2 4 5 - 6

8+6 +3 +1=18

1- 2 5 - 6

8 +11+1=20

1- 3 5 - 6

4+9 +1 =14

slack
20 18 = 2
20 20 = 0
20 14 = 6

Computing Algorithms
Many real-life project networks are much larger than the simple network illustrated in the
preceding example; they often contain hundreds, or even thousands, of activities. Because the
necessary computations can become exceedingly complex and time-consuming, large networks
are generally analyzed by computer programs rather than manually. The intuitive approach just
demonstrated does not lend itself to computerization because in many instances path sequences
are not readily apparent. Instead, an algorithm is used to develop four pieces of information
about the network activities:
ES, the earliest time the activity can start, assuming all preceding activities start as early as
possible.
EF, the earliest time the activity can finish.
LS, the latest time the activity can start and not delay the project
LF, the latest time the activity can finish and not delay the project.
Once these values have been determined, they can be used to find:
o

Expected duration of the project.

Slack time activities.

Which activities are on the critical path?

The three examples that follow illustrate how these values are computed using the precedence
diagram of example 1, which is repeated here for convenient reference.
Summary of the PERT/CPM critical path procedures
The critical path, procedure that can be used to plan, schedule and control projects, has the
following steps.
1. Develop a list of activities that make up the project
2. Determine the immediate predecessor activities for each activity in the project.
3. estimate the completion time for each activity
4. draw a network depicting the activities and immediate predecessors listed in steps 1 and 2

5. using the network and activity time estimates, determine the earliest start time and the
earliest finish time for each activity by making a forward pass through the network. The
earliest finish time for the last activity in the project identifies the completion time for the
entire project.
6. using the project completion time identified in steps as the latest finish time for the last
activity, make a backward pass through the network to identity the latest start and latest
finish time for each activity.
7. use the difference between the latest start time and earliest start time for each activity to
Activit
y
A
B
C
D
E
F
G
H
I
TOTAL

Activity description
Prepare architectural drawings of
planned expansion (A)
Identify potential new tenants (B)
Develop prospectus for tenants(C)
Select contractor (D)
Prepare building permits(E)
Obtain approval for building permits
(F)
Construction (G)
Finalize contracts with tenants (H)
Tenants move in (I)

Immediate
predecessor
-

Completing
time (weeks)
5

A
A
A
E

6
4
3
1
4

D,F
B,C
G,H

14
12
2
51

identify the slack time available for ;the activity.

8. Find the activities with a zero slack; these are the critical path activities.
9. Use the information from steps 5 and 6 to develop the activity schedule for the project.
Example 5:- consider the following activity list for the Western Hills shopping center project.
Required
a. Draw the network diagram
b. Identify the critical path
c. Identify the ES and EF times of each activity by using forward pass
d. Identify the Ls and LF times of each activity by using backward pass
e. Develop a detailed activity schedule for the project
Solution:
(a).

D5
3

A
1 E

5
4

F 4

14 G

I
B

2
6

H
12

Each activity letter and activity time are written above and below the corresponding activity line
(b) Path

length (weeks)

A- C H - I
AEFG-I
A- D G - I
BH-I

5+4+42+2 = 23
5+1+4+14+2=26
5+3+14+2=24
6+12+2=20

(c)

D [5,8]

E[5,6]
G[10,24]
[6, 10] F

A[0,5]

I[24,26]

C[5, 9]

B [0,6]

H[9,21]

3
The ES time for an activity leaving a particular node is equal to the largest of the earliest
finish times for all activities entering the node EF= Es + t.
d. Backward pass

D
3[7,10]

G 14[12,24]

A[0,5]
I[24,26]

B [0,6]

H[12,24]

3 an activity entering a particular node is equal to the smallest of the

The latest finish time for
latest start times for all activities leaving the node the combined solutions for requirements (c)
and (d) above can be given below.

D[5,8]
3[7,10]

G 14[12,24]

A[0,5]
I[24,26]

B [0,6]

H[12,24]

7
7

f.

Activity schedule for the western hills project

Activity
A
B
C
D
E
F
G
H
I

Es
0
0
5
5
5
6
10
9
24

Ls
0
6
8
7
5
6
10
12
24

EF
5
6
9
8
6
10
24
21
26

LF
5
12
12
10
6
10
24
24
26

slack (Ls-Es or LF-EF)

0
6
3
2
0
0
0
3
0

critical path
yes
No
No
No
yes
yes
yes
No
yes

Example 6. Given the following information relating to the major activities of a research project
Activity
precedes
expected time(days)
Start
A,E,G
A
C,B
5
C
D
8
D
I
2
B
I
7
E
F
3
F
J
6
I
J
10
J
end
8
G
H
1
H
K
2
K
end
17
Required
a. Draw a precedence diagram
b. Find the critical path
c. Determine the expected length of the project
Solution
a. precedence diagram
C

D
I

E
G

b. Critical path
Path
length (days)
A-C-D-I-J
5+8+2+10+8=33
A-B-I-J 5+7+10+8=30
E-F-J
3+6+8=17
G-H-K
4+2+17=20
c. Expected project duration is equal to the duration of the critical path = 33 days
Project Scheduling with Probabilistic Time Estimates
Although deterministic time estimate is appropriate in some situations, there are many
others in which it is not. Consequently, those situations require a probabilistic approach. The
probabilistic approach involves three time estimates for each activity instead of one:1. Optimistic time the length of time required under optimum (best) conditions. It is
represented by the letter a
2. Pessimistic time the amount of time that will be required under the worst conditions. It is
represented by the letter b.
3. Most likely time. The most probable amount of time that will be required. It is represented
by the letter m. these time estimates should be made by people who have knowledge
about the project
The beta distribution is commonly used to describe the inherent variability in time estimates.
The distribution can be symmetrical or skewed to either right or left according to the nature of a
particular activity, the mean and variance of the distribution can be readily obtained from the
three time estimates. The distribution is uni model with a high concentration of probability
surrounding the most likely time estimate of special interest in network analysis are the average
of expected time for each activity, Te, and the variance of each activity time, the expected time
is computed as a weighted average of the three time estimates:
Te = a+4m+b/6
A beta distribution is used to describe probabilities time

0 activity start

a
m te
b
Optimistic time
most likely time

pessimistic time

The standard deviation of each activitys time is estimated as one sixth of the difference
between the pessimistic and optimistic time estimates. (analogously, essentially all of the area
under a normal distribution lies within standard deviations of the mean, which is a range of six
standard deviation) the variance is found by squaring the standard deviation. Thus.
= [(b-a)]2 or (b-a)2
6
36
The size of the variance reflects the degree of uncertainty associated with an activitys time.
The larger the variance the greater the uncertainty. Hence, an activity with a variance of 16
would have more uncertainty as to its eventual duration than one with a variance of say, 6. It is
also desirable to compute the standard deviation of the expected time for each path. This can be

accomplished by summing the variance of the activities on a path and then, taking the square
root of that number. That is
(var iance of activiteson path )

Example The network diagram for a project is shown in the accompanying figure with three
time estimates for each activity. Activity times are in months. Do the following
a. Compute the expected time for each activity and the expected duration for each path
b. Identify the critical path
c. Compute the variance for each activity and the variance for each path.
Optimistic time

Most-likely time
2-4-6 b
1-3-4

3
D 3-4-5

C 2-3-5

pessimistic time

6
e 3-5-7

8 f 5-7-9

2-3-6 g

I
H 4-6-8

Solution
a. .
Path
Std of path

end

3-4-6

activity

te = a+4m+b

Time

(C)
path total

6
a-b-c

134
246

2.83
4.00

10

0.97
c
d-e-f

235
d

3.17

345
357

4.00
5.00

579

7.00

16

1.00
g-h-i

g
h

236
468

3.33
6.00

13.50

1.07
i

346

4.17

b. The path that has the longest expected duration is the critical path. Since path d-e-f has
the largest path total, it is the critical path.
The probability that the project will take longer than 18 months is approximately 2 percent
Statements of this sort are based on the assumption that the duration time of a parth is a
random variable that is normally distributed around the expected path time. The for a normal
distribution is that we are summing activity time (random variables) and sums of random
variables tend to be normally distributed when the number of items being summed is large. How
ever, even when the number of items is relatively small the normal distribution is reasonable
because the distributions being summed are unimodal

10

The next example illustrates the use of a normal distribution to determine the probabilities
for various completion times. Before we look at that example, it is important to make note of two
points. One relates to independent. It is assumed that path duration times are independent of
each other, and each activity is only on one path. In order for activity times t be independent the
time for one must not be a function of another time if two activities were always early or late
together, they would not be met if only a few activities in a large project are on multiple paths.
Even then, common sense should govern the decision of whether the independence assumption
is justified.
A second important point is that project is not completed until all of its activities not just
those on the critical path, have been completed it sometimes happens that another path requires
more time than the critical path. In which ease the project runs longer than expected. Therefore.
It can be risky to focus
Example
Using information from the preceding example answer the following questions
a) Can the path considered independent? Why?
b) Determine the probability that the project will be completed 17 months of its start?
c) Determine the probability that the project will be completed within 15 months of its start?
d) What is the probability that the project will not be completed within 15 months of its start?

Solution
a) Yes the path can be considered independent because no activity is on more than one path,
and we have no information that would suggest that any activity times are interrelated.
b) In order to answer questions of this nature, we must take in to account the degree to
which the path distributions overlap the specified completion time. This concept is
illustrated in the accompanying figure, which shows the three path distributions, each
centered on that paths expected duration, and specified completion time on 17 months.
path
17months
a-b-c
100%
10.0

Months

d-e-f
16.0 Months
100%
g-h-i
13.5

Months

11

The shaded portion of each distribution corresponds to the probability that the part will be
completed within the specified time. Observ
Observe that paths a-b-c and g-h-I are far enough to the left of the specified time that it is highly
likely that both eill be finished by month 17 but that the critical path overlaps the specified
completion time. Hence, we need only consider the distribution of path d-e-f in assessing the
probability of compilation by month 17. To do so, we first compute the value of Z using the
relationship.
Z = Specified time Expected time
Path standard deviation
In this instance, we find:
Z = 17 16
1.00
Through the application of Z table that value of Z =+1.00, we see that the area under the curve
of the left of z is 0.8413. Hence the probability of the project finishing within 17 months of its
start is 84.13%.
c) This question illustrates how to Handel a problem in which more than one of the
distribution overlaps the specified time. Note in the accompanying figure that the path de-f and g-h-I over lap month 15. This means that both paths have the potential for
delaying the project beyond the 15 month.

path

a-b-c

100%
10.0

months
0.1587
d-e-f
16.0

months

g-h-i
0.9192
13.5

months

Although the figure use full for expressing the concept of overlapping paths, we need the more
rigorous approach to determine which paths to consider and each paths probability of
completion. This requires computing the value of Z using the formula for each path. Then any
path with a z of more than +2.00 is ignored; the others will be used to determine the joint
probability of finishing by the specified time. For this problem with a specified time of 15 month,
the z values are:

12

Path

Z= 15 expected path duration

Path standard deviation

a-b-c

15-10
= +5.15(ignore)
0.97
15- 16.00
=-1.00
1.00
15 -13.50
=+1.40
1.07

d-e-f
g-h-i

From z table, the area to the left olf z = -1.00 is 0 .1587, and the area to the left of z=
+1.40 is 0.9192. The joint probability of both finishing within 15 months is the product of those
probabilities 0.1587(0.9192) = 0.1459.
d) The probability that the project will not be completed within 15 months of its start is the
complement of the joint probability, which is 1.0000-.1459=.8541
Example 7.
Expected times and variances for the major activities of an R and D project are depicted in the
PERT chart below determine the probability that the project completion time will be
a. Less than 50 weeks

16,.69

1
variance

b. more than 50 weeks

11, .69 5

24, .11

18, .25

26, .11
8

5, 0 2 10,.25 6

12, .11

where a, b

a is mean and b is

7
14, .36

Solution
a. compute the mean and standard deviation for each path
path
1-2-5-8
1-3-6-8
1-3-4-7-8

expected time (weeks)

16+11+24=51
5+18+26= 49
5+10+14+12=41

standard deviation (weeks)

.69 .69 .11 1.22
.00 .25 .11 .60
.69 .69 .36 11 .85

b. Compute the z- score for each path for the length specified. Ignore the any path that has
a score of more than
The probability that each path will be competed in 50 weeks or less is shown in the
corresponding diagram (probabilities are from appendix table b) the probability that the project
will be completed in 50 weeks or less depends on all three paths being completed in that time.
Because the z for path 1-3-4-7-8 is greater than +2.00, it can be ignored; the probability of
completion of that path in 50 weeks is close to 100 percent. It is less certain that the other two

13

paths will be completed in that time. The probability that both will not exceed 50 is the product
of their individual probabilities of completion. Thus .2061(.9525) =.1963
The probability that the project will exceed 50 weeks in the complement of this number, which is
1.00 0.1963 = 0.8037. (Note that it is not the product of the complements of the path
probablities )

Ecample9.
The time required to complete a construction project can be described by a normal distribution
that has a mean of 42 days and a standard deviation of 4 days. Assuming this to be an accurate
model, find these probabilities using appendix table b.
a. The project is finished in 40 days or less after it is started
b. The project takes longer than 38 days
c. The project takes longer than 42 days
Solution
Mean = m = 42 days
Standard deviation (s) = 4 days
Z= x-m/s
a. z = 40-42/4 = -50. from appendix b, the probability of a value of -50 or less is .3085

14

3085
b. z= 38-42/4 = -1.00 from appendix b, the probability of z of -1.00 or less is .1587. The
probability of a value of more than z = -1.00 is 1-.1587 = .8413

c. Note that x equal the mean. The probability of a value greater than the mean is .50
Z=42-42/4 = 0 the probability for z = 0 is .50

Exercise
1. Given the following information regarding a project
Activity
immediate predecessor
estimated activity time(weeks)
A
3
B
5
C
4
D
A
2
E
B
3
F
C
9
G
D,E
8
H
B
7
I
H,F
9
50
Required
a. Draw the network diagram for the project
b. Is the project duration 50 weeks? Explain
c. Identify the critical path and determine the project duration
d. Use the forward pass to identify ES and EF times of each activity and a backward pass to
identify LS and LF times of each activity
e. Develop the detailed activity schedule for the project
2. A project involving the installation of a computer system consists of 8 activities as shown
below .
Activity
A
B
C
D
E
F
G
H

immediate predecessor
A
B
D
E
B,C
F,G

Time(weeks)
3
5
4
2
3
9
8
7

Required
a. Draw the network diagram
b. Identify the critical path
c. Identify the slacks for each activity

15

3.

Given the following activity list for a project

Activity
A
B
C
D
E
F
G
H
I
J
K

immediate predecessor
A
A
C
E
G
B,D
F,I
H

estimated activity time(weeks)

5
8
2
7
3
6
10
8
1
2
17

Required
a. Draw the precedence diagram
b. Find the critical path
c. Determine the project duration
4. Given the following network diagram
4

3
5

Required
a. Find the critical path and the project duration
b. Determine the ES,EF, LS and LF of each activity
c. Develop the detailed activity schedule for the project
4. ABC Co. has been manufacturing industrial cleaning system for a number of years.
Recently, a member of the companys. New product research team submitted a report
suggesting that the company should consider manufacturing a cordless vacuum cleaner
that could be powered by a rechargeable battery. Based o the report, the management
would like to initiate a project to study the feasibility or proceeding with the new idea. In
order to compute the feasibility study, the following activities along with their sequencing
requirements were identified. In addition, the three types of time estimates for each
activity were available as given below.

Activity

Description

Immediate

Expected

Most

16

A
B
C
D
E
F
G
H
I
J

Red
production
design
Man. &
eng.
design
Build protype
Prepare
mkt
broacher
Cost estimate
Preliminary
product testing
Mkt survey
Final report
Cost estimate

predecessor
-

optimistic

probable
5

12
5
4

1.5
3

A
A

3
2

4
3

11
4

C
D

1.5
1.5

2
3

2.5
4.5

B,E
H
F,G,I

2.5
1.5
1

3.5
2
1

7.5
2.5
3

Required
a. draw a network diagram for the project
b. find the expected duration and variance for each activity and variance standard deviation
for the project duration
c. determine the critical path and the expected time to complete the project together with
the detailed activity schedule
d. What is the probability that the detailed will be completed in 19 weeks of its start
e. What is the probability of the critical path being completed i. in less than 15 weeks ii.
Between 15 and 17 weeks
f. What is the probability that the project i. will be completed in 20 weeks ii. Takes more
than 20 weeks.

Time cost Trade Offs Crashing

Section objectives:
Define crashing
Describe purpose of crashing
Explain basic concepts in crashing
17

Elucidate the limitations of crashing

Illustrate the crashing process

Estimates of activity times for projects are usually made for some given level of resources. In many situations it
is possible to reduce the length of a project by injecting additional resources.
The impetus to shorten projects may reflect effects to avoid late penalties, to take advantage of monetary
incentives for timely completion of project, or to free resources for use on other projects. In many cases
however, the desire to shorten the length of a project merely reflects an attempt to reduce the indirect costs
associated with running the project, such as facilities and equipment costs, supervision, and labor and presumed
costs. Managers often have certain options at their disposal that allow them to shorten, or crash, certain options
at their disposal
that options are using additional personnel or more efficient equipment and relaxing work specifications.
Hence, a project manager may be able to shorten a project, there by realizing a savings on indirect
project costs by increasing direct expenses to speed up the project. The goal in evaluating time-and trade-offs is
to identify a plan that will minimize the sum of the indirect and direct project costs.
Crashing -is accelerating project of those critical activities that have the lowest ratio of incremental cost to
incremental time saved
Crash time -is the minimum time in which activity can be completed in case additional remoras are inducted.
Crash cost -is the total cost of completing an activity in crash time.
The objective of project crash cost analysis is to reduce the total projected completion time (to avoid late
penalties, to take advantage of monetary incentives for timely completion of a project, or to free resources for
we on other the projects), while minimizing the cost of crashing.
Project completion time can be shortened only by crashing critical activities, which follows that not all project
activities should be crashed. However, when activities are crashed, the critical path may change, requiring
further crashing of previously non-critical activates in order to further reduce the project completion time. In a
nutshell, crashing means adding extra resources, and managers are usually interested in speeding up project at
the least additional cost.
In order to make a rational decision about which activities (if any) to crash and the extent of crashing desirable,
a manager needs the following information:
1. Regular time and crash time estimates for each activity (normal)
2. Regular (normal) cost and crash cost estimates for
3. A list of activates that are on the critical path

Note: Activities on critical path are potential candidates for crashing between shortening non critical
activities would not have an impact on total project duration and activities are crashed according
to crashing costs. Crash those activities with the lowest cost first. Moreover, crashing should
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continue as long as the cost to crash is less than the benefit received from crashing. These
benefits might take the form of incentive payments for early completion of the project as part of
a government contract, or they might reflect savings in the indirect project costs, or both
The general procedure for crashing is:
1. Obtain estimates of regular and crash times and costs for each activity.
2. Determine the lengths of all paths and path slack times.
3. Determine which activities are on the critical path.
4. Crash critical activities, in order of increasing costs, as long as crashing costs do not exceed benefits.

Note that two or more paths may become critical as the original critical path becomes shorter, so that
subsequent improvements will require simultaneous shortening of two or more
paths. In some cases it will be most economical to shorten an activity that is on two or more of the critical
paths. This is true whenever the crashing cost for a joint activity is less than the sum of crashing one activity
on each separate path.
Cost/time =

Crash cost - Normal Cost

Normal time Crash time

Crash

Normal

Time

Example:
Using information below develop an optimum time cost solution. Assume that indirect project costs are birr
1000 per day.
Activity
a
b
c
d
e
f

Normal
time
6
10
5
4
9
2

Crash
time
6
8
4
1
7
1

Cost/day
to crash
500
300
700
600
800
19

Start

10
b

6
a
5
C

2
f

End

9 e
4
d

Solution
Step 1. Determine activities on critical path and non critical path and their lengths.
Path
1.2.5.6
1-3-4-5-6

Length
18
20
Critical path

2. Rank the critical path activates in order of lowest crashing cost and determine the no of days each can be
crashed.
Activity
c
e
d
f

Cost/day to crash
300
600
700
800

Available crash day

1
2
3
1

3. Begin shortening the project, one day at a time, and check after each reduction to see which path is
critical.
4. 1. Shorten activity C by one day length becomes 19 days
2. Shorten e by one day since shortening c is not possible. length 18 days.
3. Since there are two critical paths, further improvement will necessitate
shortening one activity on each.

20

SUMMARY

800

Path

Activity

1-2-5-6

a
b
f

200
1-3-4-5

were
greater
benefit
stop
Total
normal
crash

Path

1-2-5-6
1-3-4-5-6
Activity to be
crashed

c
d
e
f
Length after
n =0 1 2
18

18

20 19
-

Crash cost per day)

No reduction possible
(6-6) = 0
500*
800
No further reduction
possible
700
600*
800
Crashing n days
3

18 17
18
d

17

Cost of crashing

300

600

Saving

700

400

Note: The next activities to be

crashed were e andd.
However, if the two activities
crashed, the total cost will be
than (600+ 700 = 1300) the
(i.e., 1000/day). Therefore, we
the crashing at this point.
cost of crashing will be the
cost of the activities plus the
cost.

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