Project Crashing

PROJECT CRASHING

Objectives:

• How to reduce the project timelines when you’re forced to complete the
project before time?
• How to optimize the time and resources when there is time constraint?
• To find out the optimum time and resources required in case of reducing
the project timeline / crashing the project timelines.

Structure

7.1 Introduction
7.2 What is Project Crashing?
7.3 Time-Cost Relationship
7.4 Project Crashing Example
7.5 Let Us Sum Up
7.6 Self-Assessment Exercise
7.7 Further Readings

INTRODUCTION
Time is a very precious resource when it comes to project management.
Schedules for each job or activity must be very carefully developed to ensure
on-time completion of a project. But under certain circumstances and
challenges, which may occur along a new project, it is necessary to adopt
certain methods to overcome these challenges. As a project manager, you
need to reassess and adjust a plan in response to arising needs. For this, there
are several methods such as critical thinking, risk analysis and project
crashing are used.

Crashing in project management relates to cost-evaluation of reducing those

activities which are on the critical path. After which, the activities that
correspond to the lowest cost for crashing should worked on. In this chapter,
the underlying premise behind project crashing is explained and typical risks
involved in a schedule crashing effort are described. Combined, the project
crashing assessment and the risks can be brought to executive management
when you advise them about how best to proceed with your project.

WHAT IS PROJECT CRASHING?

Crashing is a method used in project management that assists in boosting up
the project timeline by employing additional resources in cases where the
scope and deadline of the project cannot be changed instead, you’re force to
complete the project before time without compromising the scope. Although
it will increase the cost of the project but in some cases, it is a good project
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Project Planning strategy to be exercised when you’re forced to complete the project before
time. There are several situations where one can think of crashing the project
timelines, for example;

• When there is an emergency to complete the project before time

• When project is delayed due to unforeseen circumstances
• To avoid a delay in an upcoming phase of another project which is lined-
up
• Availability of free resources

Since crashing a project entails a large budget increase for employing

additional resources, it should only be used as a last resort when;

• It’s impossible to delay the project deadline.

• It’s impossible to reduce the scope of the project.
• When the cost of missing the deadline is greater than the cost of crashing
the project.

That said, the best, and most effective time to begin crashing a project is as
soon as the need for it is identified. But to be successful, project crashing
should be calibrated, decided upon, and applied at the very start of a project
for effective results.

Let’s consider this simple project crashing example. Your team is tasked with
launching a magazine to celebrate your company’s 50th anniversary, but
delays in approving the lead feature have caused the project to fall behind. In
order to ensure the magazine is in hand by the anniversary party, an element
of the project’s scope that can’t be changed, you choose to pay a rush fee for
the printer. This project crashing step helped you meet the immovable
deadline, but it also increased your project budget.

TIME-COST RELATIONSHIP
Estimation of time required for the performance of an activity depends upon
the quantity of resources. Except some fixed duration activities such as a
gestation, crop duration etc. for which it is possible to manage the duration of
an activity by varying the quantity of resources. For an instance, if cost is not
a constraint, adding more resources to the project might reduce the time
duration i.e., time is inversely proportional to cost. The relation can be better
understood from the figure below. The time for the activity at minimum cost
is called normal time and the minimum time for the activity is called crash
time. The costs associated with these times are called respectively the normal
cost and the crash cost. Although it is possible to estimate the time and cost
associated with the normal and crash conditions for each activity it is difficult
to estimate the time and cost at any intermediate stage between these two
points. To overcome this difficulty, it is assumed that the relationship
between the time and cost as linear in the range between normal and crash
situations.
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 Project Crashing

Figure 7.1: Time cost relationship

There is a possibility that when a project is crashed another non-critical

activity may become critical and in next iteration this has to be considered for
further crashing.

Steps involved in project crashing as follows;

1. Identify critical path and critical activity

2. Compute crash cost slope i.e. [(Crash cost – Normal cost) / (Normal
Time – Crash Time)]
3. Select the activity with the least cost slope i.e., minimum crash cost per
unit time.
4. Check for the critical path.

As the project shortening (crashing) continues, a point is reached at which no

further crashing is possible. At this point, some activities might not have
reached their crash points. If these activities are crashed further, costs are
increased with no saving in project duration.

PROJECT CRASHING EXAMPLE

Example 1: The network and durations given in the following figure shows
the normal schedule for a project. You can crash (decrease) the durations at
an additional cost. The Table 7.1 given below summarizes the time-cost
information for the activities. The owner wants you to complete the project in
110 days. Find the minimum possible cost for the project if you want to
complete it in 110 days. Assume that for each activity there is a single linear,
continuous function between the crash duration and normal duration points.
Cost is given in dollars ($) and time duration in days.

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Project Planning A
120

B C D E
1 2 3 4 5
20 40 30 50

F
60

Figure. 7.2:

Table 7.1:

Activity Normal Duration Crash Duration Normal Cost Crash Cost

A 120 100 13000 15000
B 20 15 1500 2500
C 40 30 18000 22500
D 30 20 1300 2000
E 50 40 3200 4200
F 60 55 12000 13050

Solution:

Assume that the duration-cost relationship for each activity is a single linear,
continuous function between the crash duration and normal duration points.
Using the normal duration (ND), crash duration (CD), normal cost (NC), and
crash cost (CC), the crash cost slope for each activity can be determined as
follows;
CC NC
SA =
ND CD
15000 13000
SA = = $ 100/day
120 100

SB = $200/day
SC = $450/day
SD = $70/day
SE = $100/day
SF = $250/day

The normal cost for the project is the sum of a normal cost for each activity.
The normal cost for the project is $49000 and the normal duration is 320
days. The activity which should be crashed is the one on the critical path
which will add the least amount to the overall project cost. This will be the
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 Project Crashing
activity with the flattest or least-cost slope. The duration can be reduced as
long as the critical path is not changed, or a new critical path is created. In
addition, the activity duration cannot be less than the crash duration.

SD = $70/day (least-cost slope) Maximum of 10 days can be cut from this

schedule by reducing the duration of activity D to the crash duration of 20
days.

A
120

B C D E
1 2 3 4 5
20 40 30 50
20

F
60

Figure.7.3

Overall duration is 130 days and there are multiple critical paths (B-F-E and
B-C-D-E). Total project cost at this duration is the normal cost of $49000
plus the cost of crashing the activity D by 10 days (70 * 10 = $700) for a total
of $49700.

The next activity to be crashed would be the activity E, since it has the least-
cost slope ($100 per day) of any of the activities on the critical path. Activity
E can be crashed by a total of 10 days. Crashing the activity E by 10 days
will cost an additional $100 per day or $1000.

A
120

B C D E
1 2 3 4 5
20 40 30 50
20 40

F
60

Figure. 7.4

The project duration is now 120 days and the total project cost is $50700.
There are now three critical paths (A, B-C-D-E, and B-F-E). The next stage
of crashing requires a more thorough analysis since it is impossible to crash
one activity alone and achieve a reduction in the overall project duration.
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Project Planning Activity A is paired with each of the other activities to determine which has
the least overall cost slope for those activities which have remaining days to
be crashed. Activity A ($100) + activity B ($200)

Activity A ($100) + activity C ($450) + activity F ($250)

The least-cost slope will be activity A + activity B for a cost increase of $300
per day. Reducing the project duration by 5 days will add 5*300 = $1500
dollar crashing cost and the total project cost would be $52200. Activity B
cannot be crashed any more.

A
120
115

B C D E
1 2 3 4 5
20 40 30 50
15 20 40

F
60

Figure. 7.5

Final step in crashing the project to 110 days would be accomplished by

reducing the duration of activity A by 5 days to 110 days, reducing activity C
by 5 days to 35 days, and reducing activity F by 5 days to 55 days. The
combined cost slope for the simultaneous reduction of activity A, activity C,
and activity F would be $800 per day. For 5 days of reduction this would be
an additional $4000 in total project cost. The total project cost for the crashed
schedule to 110 days of duration would be $56200.

A
120
115
110

B C D E
1 2 3 4 5
20 40 30 50
15 35 20 40

F
60
55

Figure. 7.6

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 Project Crashing
LET US SUM UP
There are many things that can make it necessary to shorten the length of a
project, such as time-to-market concerns, incentive contracts, the need for
key resources, high overhead costs, or just delays that come up out of the
blue. These are called cost-time trade-off decisions, and they happen all the
time in real life.

This unit showed a formal, step-by-step way to figure out what will happen if
the project is finished earlier than planned. Rushing through a project makes
it more likely that it will run late. Depending on how sensitive the project
network is, the amount of time that needs to be cut from the normal time to
the best time varies. If a network has several critical or nearly-critical paths, it
is considered sensitive.

When shortening sensitive networks, it is important to be careful so that

project risks don't go up. On the other hand, insensitive networks offer the
chance to save a lot of money on a project by getting rid of some overhead
costs without much risk.

SELF ASSESSMENT EXCERCISE

1. How often do projects crash, and what are the top five causes?
2. What are the benefits and drawbacks of decreasing a project's scope in
order to move it along more quickly?
3. Why is putting projects on overtime a common strategy for rescheduling
work? What potential drawbacks could this choice have?
4. How can a project manager use a cost-duration graph? Explain.
5. Shortening the project's duration raises the possibility of being late.
Explain.
6. The critical path can be shortened in order to save money. Describe how
7. A project has activities with the following normal and crash times and
cost in dollars ($).
Table 7.2:
Activity Predecessor Normal Crash Normal Crash
Activity Duration Duration Cost Cost
(Weeks) (Weeks)
A - 6 4 18000 30000
B A 7 5 14000 1000
C A 4 3 19000 15000
D B 8 6 34000 30000
E C 2 1 3000 1500
F D 7 5 12000 10000
G E 4 2 15000 12000
Determine a crashing scheme for the above project so that the total project
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time is reduced by 3 weeks.