Question:

Break down the relationship between task duration and direct resource cost. For there to be a

reduction in duration of any task, what must happen to the direct resource cost? Is there a limit to

this approach? In your answer, provide an example.

Answer:

The Relationship between Task Duration and Resource Cost:

The task duration and direct resource costs to complete an activity or a project are generally

inversely related. That is, the less expensive the activity or project the longer the task duration.

The amount of resources employed and the task duration are not necessarily inversely

proportional. It means that the quantity of resources employed and the task duration are never

inversely proportional. A project's total costs include both direct and indirect costs associated

with completing the tasks of the project. Hence, one should never automatically assume that

what one man can accomplish in 16 weeks can actually be completed by 16 men in one week.

Material, labor, equipment, and subcontractor costs are considered direct costs for a project.

Indirect costs are the costs incurred in performing services that are not directly related to a

specific activity, and in some cases are not connected to a specific project. The project would

likely take too long if each activity were scheduled for the shortest duration that resulted in the

lowest direct cost. The late completion of the project would result in significant penalties. Thus,

time-cost tradeoff analysis is used to shorten the project duration. By shortening a few activities

on the critical path, the project duration can be shortened. When the direct cost of a project
equals the direct costs of its activities, the direct cost of the project increases with a decrease in

duration, while the indirect cost decreases; hence, there is a linear association exists between the

task duration and indirect cost of the activity.

Critical path scheduling works by setting all activity durations to their minimum values, thus

finding the minimum time for a project to be completed. It is this minimum completion time that

generates the project-crash time. Some activities can be assigned longer durations that are not

critical, and this can help reduce costs, by altering the schedule and reducing the duration-cost

tradeoff. Heuristic approaches can be used to solve the time and cost trade-off.

Particularly, a simple method is to initially apply the critical path scheduling with time frame of

all activities which is assumed to be having minimum cost. Afterwards, the planner of the project

can evaluate activities of the project on the critical path and then reduces the scheduled activities

duration with the lowest resulting cost increase. The planner of the project develops various

activities on the essential way ranked with their cost slopes. The heuristic solution proceeds by

shortening activities in the order to lowest cost slopes.

A reduction in the duration of the activities on the shortest path makes the time for the entire

project shorter; it eventually becomes necessary to prepare a new list of activities on the critical

path. In this way, good schedules can be identified, though not necessarily ideal schedules. In

order to shorten project duration, the following steps should be followed:

1. Draw the project network

2. Perform CPM calculations and find the critical path.

3. Computation of the cost slope for each activity

4. You should continue to shorten critical path durations until their crash durations are reached or

until the critical path changes.

5. As a result of shortened critical paths, you should adjust the timing and the floats of the

activities.

6. Shortening a critical path requires adjusting timings and floating costs.

7. A cost increase from shortening an activity is calculated by multiplying the slope by the

amount of time shortened.

8. The crash point is then reached when no more shortening can be achieved.

9. A plot of project completion time against cumulative cost increase can be used to visualize the

results. This is basically the cost and time relationship of the project. When the indirect cost of

the project is added to this curve, a project time/cost curve is obtained. This curve gives a

optimum duration for the project and the corresponding minimum cost.

Example:

It is expected that the production of scaffolds will vary with crew size, as shown below:

Contractor to build scaffolds covering 8400 square meters. The contractor to hire several crews

with varying costs is given as under:

Estimated Production Crew Size Crew formation

166 5 1S, 2L, 2C, 1F
204 6 2S, 3L, 2C, 1F
230 7 2S, 3L, 3C, 1F
For the duration of installation of the metal scaffold, divide the quantity by the estimated daily

production rate. To find the price of installing the scaffold, add daily crew costs and multiply by

how long it will take for the crew to be deployed.

Crew size Duration (days) Cost

 5 51 51 x (1x60 + 2x96 + 2x128 + 1x144) = 33252
6 42 42 x (2x60 + 3x96 + 2x128 + 1x144) = 33936
7 37 37 x (2x60 + 3x96 + 3x128 + 1x144) = 34632

Cost slope 1 = (33936 – 33252) / (51 – 42) = 76.22 LE/day

Cost slope 2 = (34632 – 33936) / (42 – 37) = 139.2 LE/day

Reference

Elbaltage, E. (2015). Project Cost and Time Relationship. Construction Management, Ch 8, 164-

181.