CPM and CRASHING

i) Crashing: PERT deals with time estimate. CPM deals with both time and cost. Having
drawn PERT, identifying the critical path is the first step of cost analysis. Critical path
represents longest activity chain. Therefore, in any attempt at either reducing overall time
of project or reducing cost of operations or both, it is essential that we concentrate our
attention first on those activities along the critical path. Reduction of project time is
feasible if we can reduce to such activity times. The latter is possible by allocation of
additional resources to such activities. For example, it is common knowledge that if we
are prepared to employ persons on overtime, the work could be completed earlier. But by
doing so we spend more money. Similarly, by increasing the workforce, we may again
reduce the time of a particular activity. By doing so, we have diverted manpower from
some other activity, which in turn might increase the activity time of the latter. In case it
is possible that the additional resources can be diverted from non-critical path activities,
and consequently the increase in duration of such activities is less than the slack, such
diversions will not increase the cost of the project.
ii) Normal cost vs crash cost
Normal cost consists of two elements: (i) direct cost (ii) indirect cost. Direct cost
depends on labour and materials. Indirect cost depends on overhead
such as machine
cost, supervision cost, cost of infrastructure like light, electricity, water, etc. Both these
costs are functions of time. Hence indirect cost is directly proportional to time. In other
words, as the project time is reduced, indirect cost are functions of time. Hence indirect
cost is directly proportional to time. In other words, as the project time is reduced,
indirect cost comes down. Crashing is process of reducing project time. By reducing
time, we incur higher cost for mobilizing additional resources. Therefore, direct cost goes
up as time comes down. Since direct cost increases with crashing and indirect cost
decreases, what we find here is an optimum time where in the total cost is minimum.
iii)Optimum time and cost Optimum time and cost is obtained through
repeated
methods of trial and error by creating activities along the critical the critical path, taking
those activities having least incremental cost first and moving upwards to cover the
remaining. Hiving exhausted all such activities we might now move to examine similar
crashing on non-critical path, subject to the condition that the crashing is conducted
without upsetting the critical path. This cycle is repeated till the desired result is obtained.
For bigger projects, trial and error method is not feasible. Linear programming and use of
computers are found very popular and useful in such cases.
Problem1
The following table gives activities, time in days, direct costs and crash costs.
Activities
A B C D
E
F
G
Normal time(days) 4
6
2
5
2
7
4
Crash time(days)
3
4
1
3
2
5
2
Normal cost(Rs) 40 150 38 150 100 115 100
Crash cost(Rs)
60 250 60 250 100 175 240
Predecessor
-- -- -- A
C
A D,B,E
Indirect cost vary as follows:
Days 15 14 13 12 11 10 9 8 7 6
Cost 600 500 400 250 175 100 75 50 35 25
Determine project duration, which will retain minimum total cost.

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Problem2
A small marketing project consists of jobs as per details in the table below. Duration is
given in days.
Job
1-2 1-3 1-4 2-4 3-4 4-5
Normal Duration
9
8 15 5 10
2
Minimum Duration 6
5 10 3
6
1
Crashing Cost
20 25 30 10 15 60
.
(a) What is the normal project length and minimum project length?
(b) Determine the minimum crashing cost of schedules ranging from normal length
down to and including the minimum length schedule. If L is the length of normal
schedule, find cost of schedules which are L, (L-1), (L-2) and so on. Overhead
cost is Rs 60 per day.
(c) What is the optimal length schedule duration of each job for your solution?
(d) Distinguish between optimum schedule and minimum schedule.
Problem3
A management institute plans to organize a conference on use of Operation Research for
decision making . In order to co-ordinate the project , it has decided to use a PERT
network. The major activities and time estimates for activity has been compiled as
follows:
SL.NO Activity description
Time estimate
Activity that must
(a-m-b)
precede
A
Design conference meeting theme
1-2-3
None
B
Design front cover of conference
1-2-3
A
proceedings
C
Design brochure
1-2-3
A
D
Compile list of distinguished
2-4-6
A
speakers
E
Finalize brochure and print it
2-5-14
C and D
F
Make travel arrangements for
1-2-3
D
distinguished speakers.
G
Send brochures
1-3-5
E
H
Receive papers for conference
10-12-20
G
I
Edit papers
3-5-7
H
J
Print proceedings
5-10-15
B and I
(a)
(b)
(c)
(d)
(e)

Draw the network.

Calculate expected time for each activity and variance for each activity.
Calculate EST, EFT, LST, LFT, TF
Identify critical path.
Find the probability that the project will be completed in n days.