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(Time Reduction = Time Compression = Time Shortening)

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3/16/2013 12:41 AM

**Why Project Time Reduction
**

To meet the customer contractually required time.

To recover time of delays, that occur in the early stages of the project, to avoid paying liquidated damages, or avoid damaging the company relationship with the customer.

** To complete a project early, free key resources and move on
**

to another project.

To avoid adverse weather. To receive an early-completion bonus. (By the Contract) To realize incentive pay. (catch a business season) To meet a client’s desire for expediting the project.

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Free Time Reviewing the job logic (critical activities in parallel). Use overlap.How to Shorten Project Time 1. 3 3/16/2013 12:41 AM . Use subcontractor. Reviewing duration of critical activities.

Use subcontractors. Achieve more output by offering incentive payments. Work on multiple shifts. 3/16/2013 12:41 AM 4 . Buy Time Have the existing crew work overtime. Change construction method. Use better/more advanced equipment. Use more quickly installed materials. Bring in additional workers (resources) up to practical limit.How to Shorten Project Time 2.

5 3/16/2013 12:41 AM .Purpose of Time Reduction Technique The main purpose of this topic is to demonstrate a procedure to determine activity schedules to reduce the project duration time with a minimum increase in the project direct costs. by buying time along the critical path (s) where it can be obtained at least cost.

Definitions Activity time-cost trade-off input for the CPM procedure 6 3/16/2013 12:41 AM .

penalty costs for completing the project after a specified date. and bonuses for early project completion. equipment. 7 3/16/2013 12:41 AM . the interest charges on the cumulative project investment. If the activity is being performed in its entirety by a subcontract. Activity Direct Costs: include the cost of the material. Project indirect costs: may include.Definitions 1. plus any fee that may be added. 2. supervision and other customary overhead costs. and direct labor required to perform the activity in question.

The normal time is actually the shortest time required to perform the activity under the minimum direct cost constraint. 8 3/16/2013 12:41 AM . Normal Activity Cost (CD): The normal activity cost is equal to the minimum of direct costs required to perform the activity. 4.Definitions Normal Activity Time-cost Point 3. and the corresponding activity duration is called the normal time. Normal Activity Time (D): It is the normal time that is used in the basic critical path planning and scheduling based on the normal level of resource.

Crash Cost (Cd): is assumed to be the minimum direct cost required to achieve the crash performance time. Crash Activity Time (d): is fully expedited or minimum activity duration time that is technically possible. 9 3/16/2013 12:41 AM . 6.Definitions Crash Activity Time-cost Point 5.

Activity Direct Cost / Time Relationship The relationship between the activity direct cost and activity time may be straight line. continuous curve. The direct cost tends to increase if less time is available for activity. Time reduction approach (learned here) will be based on simple linear time-cost trade-off curves for each activity Activity time-cost trade-off input for the CPM procedure 10 3/16/2013 12:41 AM . discrete values. or point.

Number of inadequately shortened paths (Nij) 11 3/16/2013 12:41 AM .Normal cost(CD) Normal duration (D).Equations Cost slope (Cij) = Crash cost (Cd) .Crash duration(d)]ij . Effective Cost Slope (ECij) = Cost slope (Cij) .Crash duration(d) Time Available (TAij) = [Normal duration (D ) .

Indirect Cost / Time Relationship The indirect cost tends to increase if more time is consumed for the project. 12 3/16/2013 12:41 AM . The indirect cost is generally vary approximately linearly with the time.

Optimum Contract Duration Optimum contract duration = project schedule for minimum total cost Determining project schedule for minimum total cost 13 3/16/2013 12:41 AM .

TAij. 2.e. List (in row) all activities present in at least one of the listed paths noting for each activity its cost slope. The length of a path in question. expected path length minus Ts. Ts. and record them in the column headed iteration 1. note at the bottom of each path column (row marked iteration 0). Prepare the project Network and time estimates. 14 3/16/2013 12:41 AM . 3. Cij . i. and time reduction available. Compute the effective cost slopes.Procedure for Shortening Project Time 1. ECij. and list in columns all paths through the network whose expected lengths are greater than the desired (schedule) project duration. the time reduction that is required. Also.

3. select the activity with the lowest effective cost slope. Break ties by considering the following ordered list: 1. Give preference to the activity which lies on the greatest number of inadequately shortened paths. Choose an activity at random. Give preference to the activity which permits the greatest amount of shortening. which will be equal to the minimum of the following: 1. or 2.Procedure for Shortening Project Time 4. The smallest demand of those inadequately shortened paths 15 containing the activity 3/16/2013 (i-j). The unallocated time remaining for the selected activity (i-j). 5. Shorten the selected activity (i-j) as much as possible. 2.12:41 AM . For the path(s) with the most remaining time reduction required.

Stop of all paths have been adequately shortened. 8. or deshorten. If not. A path which was inadequately shortened prior to this iteration. All unallocated time for the activity just shortened has been consumed and there are one or more additional costslope/supply pairs for this activity. has been adequately shortened. 16 3/16/2013 12:41 AM . as long as this action does not cause any new paths to become inadequately shortened. or 2.Procedure for Shortening Project Time 6. Sell back. Return to Step 4. recalculate those effective cost-slopes where any of the following have occurred: 1. as much time possible on paths that have been overcut. 7.

The indirect cost is estimated to be SR100/day. Draw the contract total cost/time curve and determine the optimum contract duration.100 150 240 150 150 600 750 17 3/16/2013 12:41 AM .Example The below network shows the activities of a small engineering project. Data of the project is given in the below table. Activity code A B C D E F G H Time (day) normal crash 4 3 8 6 6 4 9 7 4 1 5 4 3 3 7 6 Cost (SR) normal Crash 2100 280 400 560 500 600 540 600 500 1.

Example Project Network D 0 A 1 C 2 F E 4 H G 5 B 3 18 3/16/2013 12:41 AM .

4) E (2.5) H (4.5) Normal Time 4 days 8 days 6 days 9 days 4 days 5 days 3 days 7 days Cost SR210 400 500 540 500 150 150 600 SR3.280 Cost Slope SR70 80 50 30 200 90 ** 150 ** This Activity can not be expected.3) F (2.050 “Crash” Time Cost 3 days SR280 6 days 560 4 days 600 7 days 600 1 days 1.1) B (0.2) C (1.2) D (1. Example Activity A (0.100 4 days 240 3 days 150 6 days 750 SR4.4) G (3. 19 3/16/2013 12:41 AM .

4) H (4. Reduction project time from 22 to 17 day Activity Paths Requiring Reduction Cost Slop Effective Cost Slop Time Reduction Available A-C-F-H A (0.2) C (1.2) D (1.5) Initial Path Length Remaining Time Reduction Required (17 day project duration) A-D-H 1 B-F-H 2 1 2 2 1 1 22 5 4 3 2 0 0 0 20 1 20 3 2 2 1 1 0 0 1 1 20 3 3 2 1 1 1 0 70 80 50 30 90 150 Iteration 35 80 50 30 45 50 Action 10 21 20 21 10 10 Iteration Cost 1 x 70=70 1 x 90= 90 1 x 150=150 2 x 50=100 1 x 30= 30 1 x 80= 80 Cumulative Cost 0 1 2 3 4 5 6 3/16/2013 12:41 AM Cut A by 1 day Cut F by 1 day Cut H by 1 day Cut C by 2 days Cut D by 1 day Cut B by 1 day 3050 3120 3210 3360 3460 3490 3570 .1) B (0.4) F (2.

1) B (0.4) F (2.4) H (4.2) C (1.5) Initial Path Length Remaining Time Reduction Required ( day project duration) Iteration Action Iteration Cost Cumulative Cost 21 3/16/2013 12:41 AM . Reduction project time from 22 to Activity Paths Requiring Reduction Cost Slop Effective Time Reduction Cost Slop Available A (0.2) D (1.

Accelerating the Critical and Noncritical path 22 3/16/2013 12:41 AM .

Optimal Project Duration Project Duration Direct Cost Indirect Cost Total Cost 6000 5000 Total Cost 17 18 19 3570 3410 3260 Optimal Project Duration 1700 1800 1900 5270 5210 5160 20 3150 2000 5150 22 3050 2200 5250 4000 Direct Cost Indirect Cost Cost $ 3000 2000 1000 0 17 18 19 20 22 Project duration (day) 23 3/16/2013 12:41 AM .

24 3/16/2013 12:41 AM .Class work Class Work #2 Data on small maintenance project is given as below: Depends on A B B C D. G Normal Time Cost 6 days $700 4 days 400 5 days 650 8 days 625 10 days 200 7 days 500 3 days 600 6 days 300 7 days 350 Crash Time Cost 4 days $800 4 days 400 4 days 700 5 days 700 7 days 350 5 days 700 3 days 600 5 days 400 4 days 425 Activity A B C D E F G H I On completion. E F. Using time-cost trade-off method. the project will give a return of $110/day. how much would you like to compress the project for maximizing the return? Show all calculations.

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