cpm

1. CRASHING AND
COST PLAN
PREPARED BY:
JULIUS N. CUARESMA
BSCE 5-1

2. REDUCING TIME AND COST
1. To avoid penalties for not completing the project on time.
2. To take advantage of monetary incentives for completing
the project on or before the target date.
3. To free the resources such as money, equipment and men
for use on other projects.
4. Reduce indirect costs associated with the project such as:
a. Facilities and equipment cost
b. Supervision cost
c. Labor cost
d. Personnel cost

3. Crashing Certain Activities
1. The use of additional funds to support the
following
2. Additional personnel
3. Have more efficient equipment
4. Relaxing of some work specification

4. The manager needs the
following informations:
1. Regular time and crash time estimates
for each activity.
2. Regular cost and crash estimate for each
activity.
3. A list of activities that are on the critical
path.

5. From the economic view, activities should
be crashed according to crashing costs.
1. The lowest cost should be crashed first
2. Crashing should continue as long as the
cost to crash is less than the benefits
received from crashing.

6. Procedure in Crashing Project
Time
1. Obtain an estimate of regular and crash time
plus the costs of each activity.
2. Determine the length of all paths and their float
time.
3. Determine which activities are on the critical
path.
4. Crash the critical activities in the order of
increasing costs as long as crashing costs do not
exceed benefits.

7. Example Problem
THE INDIRECT COSTS OF A PROJECT IS P10, 000
PER WEEK UP TO ITS DURATION. THE PROJECT
MANAGER WAS FURNISHED THE FOLLOWING
COST AND TIME INFORMATION.
1. DETERMINE AN OPTIMUM CRASHING PLAN
2. GRAPH THE TOTAL COSTS FOR THE PLAN

8. ACTIVITY CRASHING POTENTIAL WEEK COSTPER WEEK TOCRASH
A 3 8000
B 3FIRST WEEK 3000
2ND WEEK 4000
C 2 5000
D 1 1000
E 3 5000
F 1 2000

9. B-14
A-8
C-11 D-6
F-7
E-14
1
2
53
4

10. SOLUTION:
1. DETERMINE THE PATH LENGTHS AND
IDENTIFY THE CRITICAL PATH.
PATH DURATION IN WEEKS
A,B 22
C,D 17
E,F 21

11. 2. RANK THE CRITICAL ACTIVITIES OF PATH A,B
ACCORDING TO CRASHING COSTS.
ACTIVITY COST PER WEEK TO CRASH
B 3000 1ST WEEK
A 8000
ACTIVITY B HAS THE LOWER CRASHING COST, HENCE, IT
SHOULD BE SHORTENED BY ONE WEEK. THIS WILL REDUCE THE
INDIRECT COSTS BY:
10,000 – 3,000 = 7,000 NET SAVINGS
AT THIS POINT, PATH A,B AND E,F WILL HAVE THE SAME
LENGTH OF 21 WEEKS, THUS BOTH WOULD BE CRITICAL PATH.

12. 3. RANK ACTIVITIES BY CRASHING COSTS ON THE TWO
CRITICAL PATH.
PATH ACTIVITY COST PER WEEK TO CRASH
A-B B 4000
A 8000
E-F F 2000
E 5000
CHOOSE ONE ACTIVITY ON EACH PATH TO
CRASH. SAY B ON ACTIVITY A-B AND F ON
ACTIVITY E-F :
4000 + 2000 = 6000 CRASHING COSTS
10,000 – 6,000 = 4,000 NET SAVINGS

13. 4. VERIFY WHICH PATH MIGHT BE CRITICAL.
PATH A-B AND E-F WOULD BE 20 WEEKS TO
CRASH ONE WEEK AND C-D WOULD STILL BE
17 WEEKS

14. 5. AGAIN, RANK ACTIVITIES ON THE CRITICAL PATH.
CRASH B ON PATH A-B AND E ON PATH E-F:
4,000 + 5,000 = 9,000 CRASHING COSTS
10,000 – 9,000 = 1,000 NET SAVINGS

15. 6. AT THIS POINT, NO FURTHER
IMPROVEMENT IS POSSIBLE. BOTH PATH A-B
ANG PATH E-F HAS 19 WEEKS AND TO
SHORTEN ONE MORE WEEK FROM EACH PATH
WOULD MEAN ANOTHER P8,000 FOR
ACTIVITY A AND P5,000 FOR ACTIVITY E OR A
TOTAL OF P13,000 WHICH EXCEEDS THE
P10,000 POTENTIAL SAVINGS IN INDIRECT
COSTS.

16. SUMMARY OF THE RESULT SHOWING THE LENGTH OF THE
PROJECT AFTER CRASHING N WEEKS.

17. SUMMARY OF COSTS

19. .