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    Chapter 7 - Reducing Project Duration

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    CHIẾN NGUYỄN NGỌC HOÀNG

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    Chapter 7 - Reducing Project Duration

    Uploaded by

    CHIẾN NGUYỄN NGỌC HOÀNG
    18 views5 pages

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    Chapter 7_Reducing Project Duration

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    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    18 views5 pages

    Chapter 7 - Reducing Project Duration

    Uploaded by

    CHIẾN NGUYỄN NGỌC HOÀNG

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    2

    Chapter Outline

    • 9.1 Rationale for Reducing Project Duration


    • 9.2 Options for Accelerating Project Completion
    • 9.3 Project Cost-Duration Graph
    • 9.4 Constructing a Project Cost-Duration Graph
    • 9.5 Practical Considerations
    Chapter 7 • 9.6 What If Cost, Not Time, Is the Issue?
    Reducing Project Duration

    3 4

    9.1 Rationale for Reducing Project Duration 9.2 Options for Accelerating Project Completion

    • Crash is a term that has emerged in the project management lexicon for • Resources Are Not Constrained • Resources Are Constrained
    shortening the duration of an activity or a project beyond when it normally can
    - Add resources - Improve project team efficiency
    be done.
    - Outsource project work - Fast tracking
    - Schedule overtime - Use critical-chain management
    • Reasons for attempting to reduce the duration of a project are:
    - Establish a core project team - Reduce project scope
    - Time-to-market pressures
    - Unforeseen delays - Do it twice—fast and correctly - Compromise quality

    - Incentive contracts (bonuses for early completion)


    - Imposed deadlines and contract commitments
    - Overhead costs
    - Pressure to reassign resources to other projects
    5 6

    9.3 Project Cost-Duration Graph Explanation of Project Costs

    • Project Indirect Costs


    - Are costs that cannot be associated with any particular work package or
    activity.
    ▫ Examples are overhead costs such as supervision, administration,
    consultants, and interest.
    - Are costs that vary directly with time.
    • Project Direct Costs
    - Are costs that assigned directly to a work package and activity.
    ▫ Examples are labor, materials, equipment, subcontractors.

    - Represent normal costs (low-cost, efficient methods for a normal time).

    • FIGURE 9.1

    7 8

    9.4 Constructing a Project Cost-Duration Graph Determining the Activities to Shorten

    • The project cost-duration graph is used to compare additional cost • Which activities to shorten?

    alternatives for benefits. • Look for critical activities that can be shortened with the smallest increase in cost
    per unit of time.
    • Assumptions:
    • Three major steps are required to construct a project cost-duration graph:
    1. The cost-time relationship is linear.
    1. Find total direct costs for selected project durations.
    2. Normal time assumes low-cost, efficient methods to complete the activity.
    2. Find total indirect costs for selected project durations.
    3. Crash time represents a limit—the greatest time reduction possible under
    3. Sum direct and indirect costs for these selected durations. realistic conditions.
    4. Slope represents cost per unit of time.
    5. All accelerations must occur within the normal and crash times.
    9 10

    Activity Graph Cost-Duration Trade-off Example

    Rise Crash cost Normal cost $800 $400


    Cost slope $80 per unit of time
    Run Normal time Crash time 10 5
    • FIGURE 9.2 • FIGURE 9.3

    11 12

    Cost-Duration Trade-off Example (Continued) Cost-Duration Trade-off Example (Continued)

    • FIGURE 9.3 (Continued) • FIGURE 9.4


    13 14

    Cost-Duration Trade-off Example (Continued) Summary Costs by Duration

    • FIGURE 9.4 (Continued) • FIGURE 9.5

    15 16

    Project Cost-Duration Graph 9.5 Practical Considerations

    - Using the project cost-duration graph


    - Crash times
    - Linearity assumption
    - Choice of activities to crash revisited
    - Time reduction decisions and sensitivity

    • FIGURE 9.6
    17

    9.6 What If Cost, Not Time, Is the Issue?

    • Commonly used options for cutting costs are:


    - Reduce project scope
    - Have owner take on more responsibility
    - Outsource project activities or even the entire project
    - Brainstorm cost savings options

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