311_session_28_project_timecost_hiroshi

311_session_28_project_timecost_hiroshi - Project...

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1 Project Management Time-Cost Trade-Off Model BUAD311 Session 28 Hiroshi Ochiumi
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2 Time-Cost Trade-offs Time-Cost Trade-off Model A model that develops the relationship between direct project costs, indirect costs, and time to complete the project by minimizing the sum of direct and indirect costs. Crash Costs The additional costs of an activity when time to complete it is shortened.
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3 Minimum Cost Scheduling Step 1:Prepare CPM-type network diagram. a. Normal cost (NC) b. Normal time (NT) c. Crash time (CT) d. Crash Cost (CC) Step 2: Determine the cost per unit of time to expedite (or crash) each activity. Step 3: Compute the critical path. Step 4: Shorten the critical path at the least cost. Step 5: Plot project direct, indirect, and total- cost curves and find the minimum-cost
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4 Network Diagram 2 4 5 3 A C B D ES=0 EF=2 2 6 2 7 7 10
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5 Summary of Activity Times and Costs Acrivity Normal TimeCrash Time Normal Cost Crash Cost A 2 1 6 10 B 5 2 9 18 C 4 3 6 8 D 3 1 5 9
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6 Calculation of Cost Per Day to Expedite Each Activity
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311_session_28_project_timecost_hiroshi - Project...

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