Table of Contents
Project crash cost optimization involves reducing the duration of a project by allocating additional resources, which increases costs. The goal is to find the most cost-effective way to shorten project timelines while considering constraints and costs. This article provides a step-by-step approach to solving such problems with clear calculations.
Understanding the Basics
In crash cost optimization, each activity has a normal duration and a crash duration, along with associated costs. The crash cost per unit time is calculated to determine the most economical activities to crash.
Step 1: Gather Data
Collect data for each activity, including:
- Normal duration
- Crash duration
- Normal cost
- Crash cost
Step 2: Calculate Crash Cost per Unit Time
For each activity, compute the crash cost per unit time using the formula:
Crash Cost per Time = (Crash Cost – Normal Cost) / (Normal Duration – Crash Duration)
Step 3: Identify Critical Path
Determine the critical path of the project, which is the sequence of activities that directly affects the total project duration. Crashing activities on this path will reduce the overall project time.
Step 4: Crash Activities Strategically
Start crashing activities with the lowest crash cost per unit time on the critical path. Continue crashing until the desired project duration is achieved or no further crashing is possible without exceeding constraints.
Step 5: Calculate Total Cost
Sum the normal costs and the additional costs incurred from crashing activities to find the total project cost at the reduced duration.