NETWORKING PROJECT

ACTIVITIES

By Prof. (Dr.) Indrasen Singh Professor In-Charge, NICMAR

 Crashing and Updating o Direct cost of an activity o The direct cost of an activity depends upon the amount of resources employed in the execution of the activity.

o This is the cost of materials consumed, machines, equipment and labour employed to perform the activity. o In CPM projects, the direct cost of the activity is generally a function of its duration. o By increasing the resources that is the activity cost, its duration can be decreased. o For Example, the white washing of a building can be done in 3 days by a team of 4 workers. o If the number of men is decreased to 3, it takes 4 days. o Thus each time 12 man-days at a cost of say Rs. 360 (Rs. 30 per man-day) are required.

o the number of men is further decreased to say 2, they may take say 7 days i.e. 14 man-days at a cost of Rs. 420. o On the other hand if the resources that is the men are increased to say 6, the work may takes 2.5 days or 15 man-days at a cost of Rs. 450. o The variation of activity cost with activity duration is illustrated in figure 1. o The variation of cost with time is rarely linear.

450

420
Cost

360

2.5

Activity Duration Figure 1

 Straight Line Approximation o The cost-time curve of the activity is rarely available. Generally, the normal and crash durations and costs of the activities are estimated.

o Even if the cost-time curve of an activity is known, it is very cumbersome to analyse it for cost calculations. o For the convenience of computations, the cost-time curve, depending upon its curvature is approximated by straight lines. o If the curvature is less, a single straight line approximation can be made, as in figure 2 and if the curvature is more, multistraight lines (segments) approximation can be adopted, as in figure 3. o The slope of the straight line (or a segment of line) gives the increase in cost per unit time for expediting the activity. This is called cost slope (CS).

CC

NC

CT Figure 2

NT

CC2

CC1

NC
CT2 Figure 3
Cost Slope, CS Crash Cost Normal Cost Noraml duration Crash Duaratin

CT1

NT

o Indirect cost of the project. o The indirect cost of the project can be subdivided into tow parts; fixed indirect cost and variable indirect cost. o The fixed indirect cost is due to the general and administrative expenses, license fee, consultants fee, insurance cost, and taxes etc., and does not depend upon the progress of the project. o The variable indirect cost depends upon the project duration, but can not be attributed to individual activities. It consists of overhead expenses, supervision, interest on capital and depreciation, etc.

 Crashing the Network o A network can be crashed or contracted by identifying the least cost slope, critical activity and the float available on the paths parallel to the critical path.

o The smallest amount of float on the parallel paths, determines the duration by which the selected activity can be crashed without making it non-critical. o This process is continued, until either all the activities become critical or all activities with cost slopes less than the indirect cost are crashed. o In the former case, that is when all activities become critical, the project duration can be reduced by crashing more than one activities in parallel. o The combination of activities, which together give the least cost slope less than the indirect cost, are selected for crashing.

o They are crashed as far as they can without making any activity non-critical. o The process is continued, until the total cost of the project does not start increasing.

o The project duration corresponding to the minimum cost is the optimum duration. o The crashing process can be continued if required, until the minimum possible duration is reached. o Example: o Let us consider the following time and cost data for a project network.

Activity
1-2 1-3 2-4 2-5 3-5 4-7 5-6 6-7 6-8 7-9 8-9

Normal Duration (Days

15 7 9 0 5 6 8 12 10 10 10

Cost (Rs.) Crash Duration (Days)

10,000 7,000 16,000 0 6,000 8,000 7,000 8,000 9,500 8,500 15,000 11 5 6 0 2 3 5 8 7 7 6

Cost (Rs.)
12,400 8,400 20,500 0 9,000 10,400 8,350 9,400 10,850 10,000 18,000

o The indirect cost of the project is Rs. 1,000 per day, and it is required to determine the optimum project duration.

o The project network corresponding to the normal activity times is shown in figure 4. o The normal activity times, along-with crash activity times in parenthesis are written along the activity arrows. The cost slope of each activity is computed in Table 1 and the same is shown in the network below the corresponding activity arrow.

Table: 1
Activity
Duration (Days) Nor Cra mal sh

Direct Cost Normal Crash 10,000 7,000 16,000 0 6,000 8,000 7,000 8,000 9,500 8,500 15,000 12,400 8,400 20,500 0 6,000 10,400 8,350 9,400 10,850 10,000 18,000

Cost slope C/T 600 700 1500 800 450 350 450 500 750

1-2 1-3 2-4 2-5 3-5 4-7 5-6 6-7 6-8 7-9 8-9

15 7 9 0 5 6 8 12 10 10 10

11 5 6 0 5 3 5 8 7 7 6

4 2 3 3 3 4 3 3 4

2400 1400 4500 2400 1350 1400 1350 1500 3000

Solution 0 1 0
15(11) 600

15 15 2
9(6)

24 29 4 23 23
6(3)

1500

800

35 35
12(8)

45 45 9

7(5)

5(5)

8(5)

5
450

6
350

10(7)

700

500

7 10

15 15
10(7) 450 10(6)

8 33 35

750

Figure 4

0 1

0
15(11) 600

15 15 2
9(6)

24 27 4 23 23
6(3)

1500

800

33 33
10(8)

43 43 9

7(5)

5(5)

8(5)

5
450

6
350

10(7)

700

500

7 10

15 15
10(7) 450 10(6)

8 33 33

750

Figure 5

0 1

0
15(11) 600

15 15 2
9(6)

24 24 4 20 20
6(3)

1500

800

30 30
10(8)

40 40 9

7(5)

5(5)

5(5)

5
450

10(7)

700

350

500

7 10

15 15
10(7) 450 10(6)

8 30 30

750

Figure 6

0 1

0
12(11) 600

12 12 2
9(6)

21 21 4 17 17
6(3)

1500

800

27 27
10(8)

37 37 9

7(5)

3 7 7

5(5)

5(5)

5
450

6
350

10(7)

700

500

12 12
10(7) 450 10(6)

8 27 27

750

Figure 7

0 1

0
12(11) 600

12 12 2
9(6)

21 21 4 17 17
6(3)

1500

800

27 27
10(8)

34 34 9

7(5)

3 7 7

5(5)

5(5)

5
450

6
350

7(7)

700

500

12 12
7(7) 450 10(6)

8 24 24

750

Figure 8

0 1

0
11(11) 600

11 11 2
9(6)

20 20 4 16 16
6(3)

1500

800

26 26
10(8)

33 33 9

6(5)

3 6 6

5(5)

5(5)

5
450

7(7)

700

350

500

11 11
7(7) 450 10(6)

8 23 23

750

Figure 9

0 1

0
11(11) 600

11 11 2
9(6)

20 20 4 16 16
4(3)

1500

800

24 24
8(8)

31 31 9

6(5)

3 6 6

5(5)

5(5)

5
450

6
350

7(7)

700

500

11 11
7(7) 450 8(6)

8 23 23

750

Figure 10

o The critical path of the normal network is 1-2-5-6-7-9 and the normal project duration is 45 days. o The sum of normal costs of the activities is Rs. 95,000. Therefore, total project cost = 95,000 + 1000 x 45 = 1,40,000 o On the critical path the least cost activity is 6-7. On the parallel path 6-8-9, there is a slack of 2 days while on path 24-7 there is a slack of 5 days. Activity 6-7 is thus crashed by 2 days. The project duration becomes 43 days. Total cost = 1,40,000 + 350 x 2 2 x 1,000 = 1,38,700. The corresponding network is given in figure 5.

o Activity 5-6 can be crashed by 3 days. The project duration becomes 40 days. Total Cost = 1,38,700 + 3 x 450 - 3 x 1,000 = 1,37,050. The corresponding network is given in figure 6.

o Activity 1-2 can be crashed by 3 days project duration becomes 37 days, and Total Cost = 1,37,050 + 3 x 600 3 x 1,000 = 1,35,850. The Corresponding network is shown in figure 7. o Activity 6-8 and 7-9 combined together can be crashed by 3 days. With this crashing, the project duration becomes 34 days and Total cost = 1,35,850 + 3 x 950 3 x 1,000 = 1,35,700. The corresponding network is given in figure 8. Thus, for the given cost data, the optimum project duration is 34 days and the optimum project cost is Rs. 1,35,700.

Updating the Project To illustrate the procedure of updating, let us consider the network shown in figure 11. 8 2 8 8

8
10

16 20 5 16 18 18 6 24 24 36 36

0 0 1

8 10

8
10

8 7

12

4 10 12

7 15 17

Figure 11

Suppose the progress of work is checked after 15 days, that is at the end of 15 days, and it is observed that: - Activities 1-2, 1-3, 1-4 and 2-5 are completed. - Activity 2-6 is in progress and needs 2 days more.

Activity 3-6 is in progress and needs 5 days more. Activity 4-7 is in progress and needs 1 day more and Activity 5-9 is in progress and needs 14 days more. Also it is estimated that due to the non-availability of fast setting cement, activity 7-8 will take 12 days while due to the arrival of a new crane, activity 8-9 will now require only 10 days. This information can be put into a tabular form, as given below:

Activity 1-2 1-3 1-4 2-5 2-6 3-6 4-7 5-9 6-8 7-8 8-9

Status Completed Completed Completed Completed In Progress In Progress In Progress In Progress Not Started Not Started Not Started

Time Required 0 0 0 0 2 5 1 14 6 12 10

Solution o The method, which is comparatively more convenient, is to bunch all the activities completed up to the date of review, into one activity and represent this by one arrow called the elapsed time arrow. o All the activities in progress will burst from the end node of the elapsed time arrow and their durations will now be the times required for their completion, from the date of review. The remaining activities will follow in their precedence order and will carry their revised time estimates. o The nodes in the new network will be numbered in a different fashion. o Then following the forward and backward computations the network can be analysed. o Activity 10-20 in figure 12 represents the elapsed time of 15 days.

o Activity 20-60, 20-65, 20-70 and 20-90 represent the activities 26, 3-6, 4-7 and 5-9 of the previous network, which respectively require 2,5,1 and 14 days. o The critical path for the revised project network is 10-20-70-8090, which gives the project duration of 38 days.

o Thus the updated version of the project is of increased duration, with some change in critical activities of the project. 14 60 17 22
2

0 10

Elapsed Time
15

20 22
5

28 28
6

10

20 15 15

65

80

90 38 38

70 16 16