Question

Question 2                                        &nbsp

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?
  1. How much would it cost to crash this project?
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Homework Answers

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

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