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CHAPTER NINE

Reducing
Project Duration

McGraw-Hill/Irwin
Copyright 2011 by The McGraw-Hill Companies, Inc. All
rights reserved.

Where
Where We
WeAre
Are Now
Now

92

Rationale
Rationale for
for Reducing
Reducing Project
Project Duration
Duration
Time Is Money: Cost-Time Tradeoffs
Reducing the time of a critical activity usually incurs
additional direct costs.
Cost-time solutions focus on reducing (crashing) activities
on the critical path to shorten overall duration of the
project.

Reasons for imposed project duration dates:


Time-to-market pressures
Unforeseen delays
Incentive contracts (bonuses for early completion)
Imposed deadlines and contract commitments
Overhead and public goodwill costs
Pressure to move resources to other projects

93

Options
Options for
for Accelerating
Accelerating Project
Project Completion
Completion
Resources Not
Constrained

Resources
Constrained

Adding resources

Fast-tracking

Outsourcing project
work

Critical-chain

Scheduling overtime

Compromise quality

Reducing project scope

Establishing a core
project team
Do it twicefast and
then correctly
94

Explanation
Explanation of
of Project
Project Costs
Costs
Project Indirect Costs
Costs that cannot be associated with any particular
work package or project activity.
Supervision, administration, consultants, and interest

Costs that vary (increase) with time.


Reducing project time directly reduces indirect costs.

Project Direct Costs


Normal costs that can be assigned directly to
a specific work package or project activity.
Labor, materials, equipment, and subcontractors

Crashing activities increases direct costs.

95

Reducing
Reducing Project
Project Duration
Duration
to
to Reduce
Reduce Project
Project Cost
Cost
Identifying
Identifyingdirect
direct costs
coststo
toreduce
reduceproject
projecttime
time
Gather
Gatherinformation
informationabout
aboutdirect
directand
andindirect
indirect
costs
of
specific
project
durations.
costs of specific project durations.
Search
Searchcritical
criticalactivities
activitiesfor
forlowest
lowestdirect-cost
direct-cost
activities
activitiesto
toshorten
shortenproject
projectduration.
duration.
Compute
Computetotal
totalcosts
costsfor
forspecific
specificdurations
durationsand
and
compare
compareto
tobenefits
benefitsof
ofreducing
reducingproject
projecttime.
time.

96

Project
Project Cost
CostDuration
Duration Graph
Graph

FIGURE 9.1

97

Constructing
Constructing aa Project
Project Cost
CostDuration
Duration Graph
Graph
Find total direct costs for
selected project durations.
Find total indirect costs for
selected project durations.
Sum direct and indirect costs for
these selected project durations.
Compare additional cost
alternatives for benefits.

98

Constructing
Constructing aa Project
Project Cost
CostDuration
Duration Graph
Graph
Determining Activities to Shorten
Shorten the activities with the smallest increase
in cost per unit of time.
Assumptions:
The cost relationship is linear.
Normal time assumes low-cost, efficient
methods to complete the activity.
Crash time represents a limitthe greatest time
reduction possible under realistic conditions.
Slope represents a constant cost per unit of
time.
All accelerations must occur within the normal
and crash times.

99

Activity
Activity Graph
Graph

FIGURE 9.2

910

Cost
CostDuration
Duration Trade-off
Trade-off Example
Example

FIGURE 9.3

911

Cost
CostDuration
Duration Trade-off
Trade-off Example
Example (contd)
(contd)

FIGURE 9.3 (contd)

912

Cost
CostDuration
Duration Trade-off
Trade-off Example
Example (contd)
(contd)

FIGURE 9.4

913

Cost
CostDuration
Duration Trade-off
Trade-off Example
Example (contd)
(contd)

FIGURE 9.4 (contd)

914

Summary
Summary Costs
Costs by
by Duration
Duration

FIGURE 9.5

915

Project
Project Cost
CostDuration
Duration Graph
Graph

FIGURE 9.6

916

Practical
Practical Considerations
Considerations
Using the Project CostDuration Graph
Crash Times
Linearity Assumption
Choice of Activities to Crash Revisited
Time Reduction Decisions and Sensitivity

917

What
What ifif Cost,
Cost, Not
Not Time
Time Is
Is the
the Issue?
Issue?
Commonly Used Options for Cutting Costs
Reduce project scope
Have owner take on more responsibility
Outsourcing project activities or even the entire project
Brainstorming cost savings options

918

Key
Key Terms
Terms
Crashing
Crash point
Crash time
Direct costs
Fast-tracking
Indirect costs
Outsourcing
Project costduration graph

919

Project
Project Priority
Priority Matrix:
Matrix: Whitbread
Whitbread Project
Project

FIGURE 9.6

920

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