Question

Question 2                                                       [13 Marks]

Activity	Original Duration (in Months)	Crash Duration (in Months)	Time Savings	Original Cost in Dollars	Crash Cost	Extra Cost	Cost per Month
F	14	12	2	10,000	14,000	4,000	2,000
A	9	8	1	17,000	27,000	10,000	10,000
H	3	2	1	25,000	26,000	1,000	1,000
G	7	5	2	10,000	16,000	6,000	3,000
C	11	8	3	27,000	36,000	9,000	3,000

1. Imagine that this project has a project float of -3 (minus three) months. Which activity or activities presented above would you crash to save three months on the project, assuming that the activities listed above represent critical path activities?

2. How much would it cost to crash this project?

Answer 1

Crash H is by 1 month

Crash F is by 2 months

GIven the float is -3, the project has to be crashed by 3 months to bring it back on track.

Therefore , first crash H by 1 month since it has the least extra cost per month of $1,000.

The maximum time saving for H was 1 month.

So, next move on to the activity F for it has the next least extra cost per month of $2,000.

Crash F by 2 months which was the maximum time-saving.

Total cost of crashing = 1 month of H * $1,000/ month + 2 months of F * $2,000/ month = $5,000