Homework Solutions

Lecture 7 – March 11, 2021

Dr Vladimir Vukovic

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 Last Time
• 4D/5D Planning Visualisation
• Multi-constraint Management

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 Today’s Agenda
• Homework solutions
• Schedule crashing homework
• EVA homework
• Case study homework

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 Schedule crashing – homework
 Given data Act. NT NC CT CC Predecessor
• Activities A 7 3000 4 6000 -
• Normal time B 3 4000 2 5500 A
• Normal cost C 4 15000 2 20000 A
• Crash time D 8 10000 5 19000 B, C
• Crash cost E 9 7000 6 9100 C
• Indirect cost (overhead) = £1400 per time period
 Identify Provide answers at:
• Cost to crash per period for each activity Lecture 5 homework
• Maximum reduction of project duration
• Cost-optimal project duration
• Nominal, Minimum, Optimal project cost
 Draw Activity on Node diagram
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 Schedule crashing – Finding the
minimum cost schedule
 To shorten a project, crash only activities that are critical
 Crash from least expensive to most expensive to crash
 Each activity can be crashed until
• It reaches its minimum time duration
• It causes another path to become critical
• It is more expensive to crash than not to crash
 Continue until no more activities should be crashed.
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Example: Finding the cost to crash
per period
Act. NT NC CT CC Cost to crash per period
A 7 3000 4 6000 (6000-3000)/(7-4) = 1000
B 3 4000 2 5500 (5500-4000)/(3-2) = 1500
C 4 15000 2 20000 (20000-15000)/(4-2) = 2500
D 8 10000 5 19000 (19000-10000)/(8-5) = 3000
E 9 7000 6 9100 (9100-7000)/(9-6)= 700

B ABD duration: 18
D
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A 8 ACD duration: 19
7 ACE duration: 20
C E
4 9
What is the critical path?

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 Example: Critical path
Act. NT NC CT CC Cost to crash per period
A 7 3000 4 6000 (6000-3000)/(7-4) = 1000
B 3 4000 2 5500 (5500-4000)/(3-2) = 1500
C 4 15000 2 20000 (20000-15000)/(4-2) = 2500
D 8 10000 5 19000 (19000-10000)/(8-5) = 3000
E 9 7000 6 9100 (9100-7000)/(9-6)= 700

B ABD duration: 18
D
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A 8 ACD duration: 19
7 ACE duration: 20
C E
4 9

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 Example: Max reduction of project
duration
Does it make sense?
B Act. NT NC CT CC Cost to crash per period
D
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A 5 A 7 3000 4 6000 (6000-3000)/(7-4) = 1000
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B 3 4000 2 5500 (5500-4000)/(3-2) = 1500
C E
2 6 C 4 15000 2 20000 (20000-15000)/(4-2) = 2500
ABD duration: 11 D 8 10000 5 19000 (19000-10000)/(8-5) = 3000
ACD duration: 11 E 9 7000 6 9100 (9100-7000)/(9-6)= 700
ACE duration: 12

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 Example: How much would the
shortest project cost
Shortest project cost =
= Crash cost + MinTime Indirect cost - 1 day crashing cost for D =
= 6000 + 5500 + 20000 + 19000 + 9100 + (12days x 1400/day) - (1day x 3000/day)
= 73400
B Act. NT NC CT CC Cost to crash per period
D
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A 56 A 7 3000 4 6000 (6000-3000)/(7-4) = 1000
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B 3 4000 2 5500 (5500-4000)/(3-2) = 1500
C E
2 6 C 4 15000 2 20000 (20000-15000)/(4-2) = 2500
ABD duration: 12 D 8 10000 5 19000 (19000-10000)/(8-5) = 3000
ACD duration: 12 E 9 7000 6 9100 (9100-7000)/(9-6)= 700
ACE duration: 12

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 Example: Which activities to crash?
Indirect costs
 Under normal conditions, this project takes 20 days. Suppose
each day the project incurs an indirect cost of 1400
(overhead).
B Act. NT NC CT CC Cost to crash per period
D
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A 8 A 7 3000 4 6000 (6000-3000)/(7-4) = 1000
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B 3 4000 2 5500 (5500-4000)/(3-2) = 1500
C E
4 9 C 4 15000 2 20000 (20000-15000)/(4-2) = 2500
ABD duration: 18 D 8 10000 5 19000 (19000-10000)/(8-5) = 3000
ACD duration: 19 E 9 7000 6 9100 (9100-7000)/(9-6)= 700
ACE duration: 20

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Example: Cost optimal project duration
 Indirect cost of 1400 / period.
• Act. E is critical and the least expensive to crash
• If it is crashed by 1 day, we would spend 700 and save 1400
• E can be crashed only by 1 day (although its Max reduction is 3days)
because this causes ACD to become critical

Act. NT NC CT CC Cost to crash per period

B
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D A 7 3000 4 6000 (6000-3000)/(7-4) = 1000
A 8
7 B 3 4000 2 5500 (5500-4000)/(3-2) = 1500
C E C 4 15000 2 20000 (20000-15000)/(4-2) = 2500
4 9
D 8 10000 5 19000 (19000-10000)/(8-5) = 3000
ABD duration: 18
E 9 7000 6 9100 (9100-7000)/(9-6)= 700
ACD duration: 19
ACE duration: 20
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 Example: Cost optimal project
duration – next step
• After crashing E by 1 day: What to crash next? Cost/period
B
D
• Option 1: A 1000
A
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8 • Option 2: C 2500
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C E
• Option 3: both D and E 3700
4 98 Act. NT NC CT CC Cost to crash per period

Indirect cost of £1400/period. A 7 3000 4 6000 (6000-3000)/(7-4) = 1000

Crash E by 1 day: B 3 4000 2 5500 (5500-4000)/(3-2) = 1500

ABD duration: 18 C 4 15000 2 20000 (20000-15000)/(4-2) = 2500
ACD duration: 19* D 8 10000 5 19000 (19000-10000)/(8-5) = 3000
ACE duration: 19*
E 9 7000 6 9100 (9100-7000)/(9-6)= 700

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 Example: Cost optimal project
duration – next step
B
D
3
A 8
74
C E
4 8

Crash E by 1 day: Crash A by ?3 days:

ABD duration: 18 ABD duration: 15
ACD duration: 19* ACD duration: 16* Indirect cost of 1400/period.
ACE duration: 19* ACE duration: 16*
Cost/period
What to • Option 1: C 2500 (cost to crash) > 1400 (indirect cost saving)
crash next? • Option 2: D and E 3700 (cost to crash) > 1400 (indirect cost saving)
Stopping condition verified
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 Example: Optimal project cost
calculation
The cost-optimal project duration
B is 16 days.
D
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A 8 What the project total cost with
4 crashed duration (16 days)?
C E Crashed project cost =
4 8 = Direct cost + CT Indirect cost +
crashing cost of E and A =
Crash E by 1 day: Crash A by 3 days: = 39000 + (16days x 1400/day) +
ABD duration: 18 ABD duration: 15 (1day x 700/day + 3days x
ACD duration: 19* ACD duration: 16* 1000/day) =
ACE duration: 19* ACE duration: 16* = 65100
Normal project cost = Direct cost + NT Indirect cost =
= 39000 + 20days x 1400 = 67000
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 Today’s Agenda
• Homework solutions
• Schedule crashing homework
• EVA homework
• Case study homework

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 Homework 2 instructions
Input your results online:
https://forms.office.com/Pages/ResponsePage.aspx?id=WxHSQ16ltkad97AziOz8YPOQsa
w8wHtKkSyNZ-3iVwtUN1JJNUFFQ1NONkNVQVo0QjdZUTc1VDdURyQlQCN0PWcu

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Earned Value Analysis – Tutorial solution
The BCWS at month 3:

BCWS = 23500 1
Earned Value Analysis – Tutorial solution

The total ACWP is the sum of ACWP of Task 1, 2,

3, 4 and 5

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Earned Value Analysis – Tutorial solution

To calculate the BCWP, each of the percentage

completion must be multiplied by original
budgets:

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Earned Value Analysis – Tutorial solution
At month 3: BCWS = £23500 BCWP = £17750 ACWP = £24300

The project is over budget

The project is behind schedule

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Earned Value Analysis – Tutorial solution

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Earned Value Analysis – Tutorial solution

Estimated Cost at Completion

EAC = BAC/CPI = 50500 / 0.730 = £69178

VAC = BAC – EAC = 50500 – 69178 = (£18678)

The project will end with £18678 over budget

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Earned Value Analysis – Tutorial solution

THE ESTIMATES OF THE PROJECT -

Projected completion
= Planned duration / SPI = 7 / 0.755 = 9.27 months

Projected slippage
= projected completion – planned duration
= 9.27 – 7 = 2.27 months

The project will end with 2.27 months behind

schedule
SPI = BCWP / BCWS
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100000

90000

80000

70000 BCWS

60000
Month BCWS
50000 0 0
1 6500
40000 2 14500
3 23500
4 34500
30000 5 45000
6 48500
7 50500
20000

10000

0 1 2 3 4 5 6 7 8 9
100000
BCWS
90000

80000 BCWP
70000 BCWP = 17750
£69178
Project
60000 VAC = completion =
£18678 9.27 months
50000
ACWP
40000
ACWP = 24300
30000
2.27 months EAT = £69178

20000

10000

0 1 2 3 4 5 6 7 8 9
 Bonus homework 2
• Based on the defined and derived EV metrics,
define Time Variance (TV). Derive equation(s)
to express TV as a function of the other EV
metrics. Derive equation to express Projected
Slippage as a function of TV

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 Today’s Agenda
• Homework solutions
• Schedule crashing homework
• EVA homework
• Case study homework

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 Case study homework
• How was fast tracking achieved?
• Why did the costs increase?
• What were the limitations experienced with fast
tracking in this case study?
• What cost saving measures were applied? Were they
effective?

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 Another crashing homework (2)
The network and durations given
below show the normal schedule for
a project. You can decrease (crash)
the durations at an additional
expense. The Table summarizes the
time-cost information for the
activities. The owner wants you to
finish the project faster. Find the
minimum possible cost for the
project if you want to finish in (105,
110, 115, 120, 125) days
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 Next Time
Building Information Modelling

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