EXERCISE

TIME AND COST OPTIMIZATION

UNDERGRADUATE PROGRAM

Day / date : Thursday / October 4th, 2018

Duration : 90 minutes
Lecturer : Cahyono Bintang Nurcahyo, ST, MT

TIME COST TRADE OFF

1. The table below provide information on activities, predecessors, normal duration, normal cost, crash duration,
and crash cost for a project.

Activities Predecessors Normal Normal Cost Crash Crash Cost

Duration Duration
(days) (Rp) (days) (Rp)

A - 50 50.000 35 72.500

B A 40 60.000 35 70.000

C A 20 45.000 10 55.000

D B 50 65.000 40 72.500

E C 60 85.000 45 115.000

F D,E 60 70.000 40 80.000

Indirect Cost = Rp 1.000 / day

Example to calculate Cost Slope for A is (72.500-50.000)/(50-35) = Rp1.500/day

a. Draw a network diagram from the preceding information, then define the critical path !
b. Calculate cost slope for each activity !
c. Use the information contained above to compress one time unit per move using the least cost method.
Reduce the schedule until you reach the crash point of the network.
For each move identify what activity(s) was crashed, the adjusted total cost, and explain your choice if
you have to choose between activities that cost the same.
d. Draw a project cost-duration graph !
e. What is the optimum cost-time schedule for the project ?