23download_doc-7.php - 1 Decision rule c Procedure i Always...

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I. Project Management: Crashing and CPM with 3 Time estimates a. Project Crashing i. Estimated time is fixed… no more ii. Can reduce through additional resources 1. Manpower, equipment iii. Direct cost of activity is always increased 1. If something could be sped up for free, it already would have been done b. Motivation i. Need to reduce time of project because: 1. Requirement to complete in specified time frame 2. Economic advantage a. Maybe the launch of a new product, often the company that hits the market 1 st gets a larger market share ii. Three kinds of costs 1. Crash costs (activity direct costs) – can identify a. Can be given directly, or need to determine through linear interpolation b. Ex: the cost to upgrade to overnight shipping 2. Administration costs (or project indirect costs) 3. Penalty costs a. Tends to coincide with admin b. If contractor doesn’t finish project by deadline there is a penalty iii. Incur crash costs to avoid administration and penalty costs
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Unformatted text preview: 1. Decision rule c. Procedure i. Always crash one period at a time ii. Identify options- critical activities 1. Only crash critical activities because they are what defines the length of a project- non critical activities have slack iii. Select least expensive iv. Savings? Implement if so. Update paths → cost to crash vs. admin and penalty cost v. Repeat 1-3 until no cost savings are possible d. Stopping Criterions i. When crashing costs is more than savings cost ii. When you can’t crash anything more e. CPM with 3 time estimates i. In past time estimate is firm ii. Now, uncertain as to task duration 1. New a. New project never been done (ex: onestart) 2. Natural Variance a. Ex: weather iii. Use 3 time estimates to deal with uncertainty 1. Keep in mind that sometimes the numbers are guesses a. a = most optimistic estimate, m= most likely, b= pessimistic...
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23download_doc-7.php - 1 Decision rule c Procedure i Always...

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