Quantitative Tools

and Techniques in
Project Management:
WBS & PERT/CPM
Engr. Jeffrey T. Dellosa
Caraga State University

Note to Students: Before taking this course, students should have undergone basic project management concepts.
 PM Today Necessary?

Frustration with cost & schedule overruns

Frustration with reliability of production estimates
Management challenges exist today:
Only 44% of projects are completed on time
On average, projects are 189% over-budget
70% of completed projects do not perform as expected
30% of projects are canceled before completion
On average, projects are 222% longer than expected

PM has been shown to improve this performance

These statistics were compiled by an independent monitoring group, The Standish Group,
and represent the US national average for 1998

2
 Key Terms
Critical Path: The longest time path through the
task network.

The series of tasks (or even a single task) that dictates

the calculated finish date of the project (That is, when
the last task in the critical path is completed, the project
is completed) The "longest" path (in terms of time) to
the completion of a project.

If shortened, it would shorten the time it takes to

complete the project. Activities off the critical path
would not affect completion time even if they were
done more quickly.

3
 Slack Time
The amount of time a task can be delayed before the project
finish date is delayed.

Total slack can be positive or negative.

If total slack is a positive it indicates the amount of time that the task
can be delayed without delaying the project finish date.
If negative, it indicates the amount of time that must be saved so that
the project finish date is not delayed.
Total Slack = Latest Start - Earliest Start.

By default and by definition, a task with 0 slack is considered a

critical task.

If a critical task is delayed, the project finish date is also

delayed. (Also known as float time)
4
 Gantt Chart
Gantt Chart: A bar chart. While visually
appealing on a task/duration basis, it is
limited because it does not show task or
resource relationships well. Strength: easy
to maintain and read.

5
Sample Gantt Chart

6
 Network Diagram
Network Diagram: A wire diagram, Also
known as a PERT network diagram. A
diagram that shows tasks and their
relationships. Limited because it shows only
task relationships. Strength: easy to read
task relationships.

7
 Dependencies
Links between project tasks.
There are 3 types of dependencies:

Causal, where 1 task must be completed before another

can begin (have to bake bread before you can make a
sandwich)
critical path schedules are based only on causal dependencies

Resource, where a task is limited by availability of

resources (more bread can be baked by 2 bakers, but
only 1 is available)

Discretionary, optional task sequence preferences that,

though not required, may reflect organizational
preferences 8
 Dummy activity
An imaginary activity with no duration, used to
show either an indirect relationship between 2
tasks or to clarify the identities of the tasks .

In CPM, each activity must be uniquely defined

by its beginning and ending point. When two
activities begin and end at the same time, a
dummy activity (an activity which begins and
ends at the same time) is inserted into the
model to distinguish the two activities.
9
 Milestone
A significant task which represents a
key accomplishment within the
project. Typically requires special
attention and control.

10
 Work Breakdown Structure (WBS)
A detailed, hierarchical (from general to
specific) tree structure of deliverables and
tasks that need to be performed to
complete a project.

Purpose: to identify actual tasks to be done

in a project. Serves as basis for project
planning.

An extension to PERT.
11
 Work Breakdown Structure
Identify the major task categories
Identify sub-tasks, and sub-sub-tasks
Use verb-noun to imply action to
something
Example: Getting up in the morning
Hit snooze button
Hit snooze button again
Get outa bed
Avoid dog
Go to bathroom
12
 Create WBS
Decomposition of project deliverables and
activities into smaller, more manageable
parts
The lowest level in WBS is a Work Package
based on Statement Of Work (SOW)
Needs to be S.M.A.R.T (Specific,
Measurable, Attainable, Realistic, Timely)
WBS requires structured brainstorming!
13
Work Breakdown Structure
Canoe Trip to
Boundary Waters

Plan for
Arrange Travel Get Equipment Plan Meals Prepare Budget Plan Activities
Emergencies

Schedule Flights to Contact BW Assign Budget Obtain

Bring cooking gear Bring Cards
Mpls Outfitter Person emerg. #s

Arrange Bring
Rent Van Rent canoes Freeze dry food Get deposits
contact at BW Joke book

Prepare 7 Bring
Arrange Motel Rent Tents Retain Receipts Bring scotch
breakfasts emerg. flares

Schedule return Bring Prepare 7 Bring two

Pay for supplies
flights Sleeping Bags lunches first aid kits

Bring Prepare 6
Close-out trip
Fishing Gear dinners

Bring lights and

waterproof
matches

14
Work Breakdown Structure
Canoe Trip to
Boundary Waters

Plan for
Arrange Travel Get Equipment Plan Meals Prepare Budget Plan Activities
Emergencies

Schedule Flights to Contact BW Assign Budget Obtain

Bring cooking gear Bring Cards
Mpls Outfitter Person emerg. #s

Arrange Bring
Rent Van Rent canoes Freeze dry food Get deposits
contact at BW Joke book

Prepare 7 Bring
Arrange Motel Rent Tents Retain Receipts Bring scotch
breakfasts emerg. flares

Schedule return Bring Prepare 7 Bring two

Pay for supplies
flights Sleeping Bags lunches first aid kits

Bring Prepare 6
Close-out trip
Fishing Gear dinners

Bring lights and

waterproof
matches

15
Work Breakdown Structure
Canoe Trip to
Boundary Waters

Plan for
Arrange Travel Get Equipment Plan Meals Prepare Budget Plan Activities
Emergencies

Schedule Flights Contact BW Assign Budget Obtain

Bring cooking gear Bring Cards
to Mpls Outfitter Person emerg. #s

Arrange Bring
Rent Van Rent canoes Freeze dry food Get deposits
contact at BW Joke book

Prepare 7 Bring
Arrange Motel Rent Tents Retain Receipts Bring scotch
breakfasts emerg. flares

Schedule return Bring Prepare 7 Bring two

Pay for supplies
flights Sleeping Bags lunches first aid kits

Bring Prepare 6
Close-out trip
Fishing Gear dinners

Bring lights and

waterproof
matches

16
 Work Breakdown Structure
Canoe Trip to
Boundary Waters

Plan for
Arrange Travel Get Equipment Plan Meals Prepare Budget Plan Activities
Emergencies

Schedule Flights to Contact BW Assign Budget Obtain

Bring cooking gear Bring Cards
Mpls Outfitter Person emerg. #s

Arrange Bring
Rent Van Rent canoes Freeze dry food Get deposits
contact at BW Joke book

Prepare 7 Bring
Arrange Motel Rent Tents Retain Receipts Bring scotch
breakfasts emerg. flares

Schedule return Bring Prepare 7 Bring two

Pay for supplies
flights Sleeping Bags lunches first aid kits

Bring Prepare 6
Close-out trip
Fishing Gear dinners

Bring lights and

waterproof
matches
17
 WBS Dictionary
A companion document to the WBS
May have detailed content of the components
contained in a WBS, including work packages and
control accounts
For each WBS component, the WBS dictionary includes a
code of account identifier, a statement of work,
responsible organization, and a list of schedule
milestones
Can include a list of associated schedule activities,
resources required, and an estimate of cost
Each WBS component is cross-referenced, as
appropriate, to other WBS components

18
 Project Management Assumptions
PM makes several key assumptions
All tasks have distinct begin and end points
All estimates can be mathematically derived
Tasks must be able to be arranged in a defined sequence
that produces a pre-defined result
Resources may be shifted to meet need
Cost and time share a direct relationship (Cost of each
activity is evenly spread over time)
Time, of itself, has no value
These assumptions make PM controversial

19
 THE PM Concept Assumption
A Critical Path Exists
A small set of activities, which make up the longest path
through the activity network control the entire project.

If these "critical" activities could be identified & assigned to

responsible persons, management resources could be
optimally used by concentrating on the few activities which
determine the fate of the entire project.

Others can be re-planned, rescheduled & resources for

them can be reallocated, without affecting the project.

20
 THE PM Concept Assumption
A Critical Path Exists

An example of a network diagram and a critical path (red lines) with 22 weeks
completion time.
21
 Standardized PM Tools

1917: Henry Gantt introduced standardized

PM tools
Gantt Chart visual tracking of tasks and resources
Depiction of relationships between tasks
Depiction of constraints between tasks
First Widespread acceptance of a single technique
Created out of need and frustration as
industrialization became ever more complex

22
 PERT & CPM

PERT (Program Evaluation and Review Technique)

introduced by US military (Navy) in 1958
US Navy : control costs & schedules for Polaris Submarine
construction

CPM (Critical Path Method) introduced by US industry

in 1958 (DuPont Corporation and Remington-Rand)
Industry: control costs and schedules in manufacturing
Common weakness to both: ignores most dependencies
Considers only completion of a preceding required task

Both rely on a logical sequence of tasks

Organized visually (Charts), tabular or simple lists
23
 An Example of a Logical Sequence
Making a simple list of tasks
Planting trees with This list does not
flowers and edging reflect time or money
around them tasks This list does not
reflect task
required to complete relationships
this project: This list is a simple
1. Mark utilities, 2. Dig sequence of logical
Holes, 3. Buy trees, 4. events
Buy flowers, 5. Plant This list does not
trees, 6. Plant flowers, 7. provide an easy project
snapshot
Buy edging, 8. Install
edging Hard to see conflicts

24
An Example of a Logical Sequence
Tabular including time and cost data
Task Name Normal Time Normal Cost
(Days) ($)

Mark Utilities 3 0
Dig Holes 2 100
Buy Trees .5 50
Buy Flowers .5 50
Plant Trees 2 100
Plant Flowers 1 50
Buy Edging .5 25
Install Edging 1 25
TOTALS 10 400

NOTE: Shaded areas are concurrent tasks that are completed along the
timeline- they contribute to overall cost but not overall duration

25
 An Example of a Logical Sequence
Visual - Using a PERT Chart (Network Diagram)
Task Name Task ID Normal Event ID Preceding
Time Number Event
(Days)
Mark Utilities
A 3 2 1
Dig Holes
B 2 3 2
Buy Trees
C .5 4 2
Buy Flowers
D .5 5 2
Plant Trees
E 2 6 3, 4
Plant Flowers
F 1 7 3, 5
Buy Edging
G .5 8 7
Install Edging
H 1 9 6, 8
TOTALS
10
An Example of a Logical Sequence
Visual - Using a PERT Chart (Network Diagram)

G 1
0.5 6
4 0.5
0.5
0.5
C 0.5 E 2

0 A 3 B 5 E 7 F 8 H 9
1 2 3 7 8 9
3 2 2 1 1
0.5 D
0.5
5 Activity Days Activity Days
A 3 E 2
B 2 F 1
CRITICAL PATH: A, B, E, F, H C 0.5 G 0.5
EARLIEST COMPLETION TIME: 9 DAYS D 0.5 H 1
27
 An Example of a Logical Sequence
Visual - Using a PERT Chart (Network Diagram)
Task ID Event ID Expected Preceding Succeeding Earliest Latest
Number Duration Event Event Finish Finish
(Days)
A 2 3 1 3 3 3
B 3 2 2 4 5 5
C 4 2 3 4,6,7,8 7 7
D 5 7 4 8 14 14
E 6 6 4 8 13 14
F 7 3 4 8 10 14
G 8 2 4,5,6,7 9 14 14
H 9 5 8 None 19 19

1.0 Draw the Network Diagram.

2.0 Identify the paths and the path lengths through a table.
3.0 Identify the critical path.
An Example of a Logical Sequence
Visual - Using a PERT Chart (Network Diagram)

Earliest Task
Completion Identification 5 14
14
Time letter
D G
7
2
0 A 3 B 5 C 7 E G H
1 0 2 3 3 5 4 7 6 13
14 2
8 16
16
9 21
21
3 2 2 6 5
F G
Latest Expected 2
Completion duration
3
Time
7 10
14

CRITICAL Path: A, B, C, D, G, H G
Total Number of Weeks: 21 weeks 2

29
 Activity Number 1

1.0 Draw the Network Diagram.

2.0 Identify the paths and the path lengths through a table.
3.0 Identify the critical path.
 Activity Number 1

Network Diagram
Activity Number 1

32
 PERT/CPM
CALCULATIONS
Basic Techniques
 PERT Calculations
Step 1: Define tasks
Step 2: Place Tasks in a logical order, find the critical path
The longest time path through the task network. The series of tasks
(or even a single task) that dictates the calculated finish date

Steps 1 and 2 are logic and legwork, not calculation these

require a clear goal

First two steps were shown or done previously

Step 3: Generate estimates

Optimistic, pessimistic, likely and PERT- expected
Standard Deviation and variance
Step 4: Determine earliest and latest dates
Step 5: Determine probability of meeting expected date 34
 PERT/CPM WITH UNCERTAIN
ACTIVITY TIMES
Experience and historical data can be used for projects that have be
completed in the past (such as home and apartment construction) to
provide accurate activity time estimates.
In many cases, however, projects are new or unique and activity times
are uncertain. In these cases estimating activity times could be difficult.
When there is uncertainty associated with activity times, they are often
best described by a range of possible values instead of one specific time
estimate.
Uncertain activity times are treated as random variables with
associated probability distributions. These distribution allows us to
form probability statements about the likelihood of meeting a specific
completion date.
Three time estimates are collected for each activity to incorporate the
uncertainty.
35
 PERT Calculations Step 3
Assuming steps 1 and 2 have been completed begin
calculations use a table to organize your calculations

Simple calculations to estimate project durations

Based on input of 3 estimated durations per task

Most Optimistic (TO) best case scenario
Most Likely (TL) normal scenario
Most Pessimistic (TP) Worst case scenario

36
 PERT Calculations Step 3
Based on input of 3 estimated durations per task:

MOST OPTIMISTIC or OPTOMISTIC TIME (OT or To)

Assumes that even the most likely interruptions or delays such as
occasional employee illnesses will not happen.

PESSIMISTIC TIME (PT or Tp)

Estimate the maximum amount of time it would take to perform the task.
Assumes that anything that can go wrong will go wrong.
All possible interruptions or delays such as labor strikes, illnesses,
training, inaccurate specification or requirements, equipment delivery
delays, and underestimation of the systems complexity are assumed to
be inevitable.

MOST LIKELY TIME (MLT) or (TL)

Estimates the most likely time that will be needed to perform the task.

37
 PERT Calculations Step 3
Formula derives a probability-based expected duration (TE)
(TO x 1 + TL x 4 + TP x 1) / 6 = TE
Read this formula as the sum of (optimistic x 1 + likely x 4 +
pessimistic x 1) divided by 6 = expected task duration

Complete this calculation for all tasks

38
 PERT Calculations Step 3
When doing manual PERT Calculations it is helpful
to construct a table to stay organized
Consider the sample project planting trees and
flowers, set up using a list
Rough estimates and no risk analysis
No Range, simply rough estimates - unreliable?
PERT Analysis will better refine estimates
Start by setting up a table to organize data

39
 PERT Calculations Step 3
EXERCISE:
TASK ID Predecessor OPTIMISTIC MOST LIKELY PESSIMISTIC EXPECTED
TIME (To) TIME (TL) TIME (Tp) DURATION (Te)

A ----- 2 5 14
B A 1 8 9
C B 3 7 5
D B 2 9 10
E B 4 6 8
F C 1 3 5
G E, F 2 5 8

40
 PERT Calculations Step 3
EXERCISE:
TASK ID Predecessor OPTIMISTIC MOST LIKELY PESSIMISTIC EXPECTED
TIME (To) TIME (TL) TIME (Tp) DURATION (Te)

A ----- 2 5 14 6
B A 1 8 9 7
C B 3 7 5 6
D B 2 9 10 8
E B 4 6 8 8
F C 1 3 5 3
G E, F 2 5 8 5

41
 PERT Calculations Step 3
Standard deviation and variance
Standard deviation (SD) is the average deviation
from the estimated time
SD = (TP-T0)/6
{read as (pessimistic-optimistic)/6}
As a general rule, the higher the standard deviation
the greater the amount of uncertainty
Variance (V) reflects the spread of a value over
a normal distribution
V=SD2 (Standard deviation squared)
42
 PERT Calculations Step 3
EXAMPLE using the previous tasks in slide #46:
TASK ID Predecess OPTIMISTI MOST PESSIMISTI EXPECTED VARIANCE
or C TIME LIKELY C TIME DURATION
(To) TIME (TL) (Tp) (Te)

A ----- 2 5 14 6 4
B A 1 8 9 7 (8/6)2
C B 3 7 5 6 (2/6)2
D B 2 9 10 8 (8/6)2
E B 4 6 8 8 (4/6)2
F C 1 3 5 3 (4/6)2
G E, F 2 5 8 5 (6/6)2
43
 Activity Number 2
Consider the following project:
Immed. Optimistic Most Likely Pessimistic
Activity Predec. Time (Hr.) Time (Hr.) Time (Hr.)
A -- 4 6 8
B -- 1 4.5 5
C A 3 3 3
D A 4 5 6
E A 0.5 1 1.5
F B,C 3 4 5
G B,C 1 1.5 5
H E,F 5 6 7
I E,F 2 5 8
J D,H 2.5 2.75 4.5
K G,I 3 5 7

44
 Activity Number 2
Determine the following:
1. What are the Expected Time for each activity?
2. What are the variance of each activity?
3. What is the earliest completion date?
4. What is the critical path?

45
 Activity Number 2
Network Diagram
Activity Expected Times and Variances
ET = (To + 4Tm + Tp)/6 2 = ((Tp-To)/6)2
Activity Expected Time Variance
A 6 4/9
B 4 4/9
C 3 0
D 5 1/9
E 1 1/36
F 4 1/9
G 2 4/9
H 6 1/9
I 5 1
J 3 1/9
K 5 4/9 46
 Activity Number 2
Network Diagram

D J

H
A E

I
C F
Start Finish

K
B G

47
 Activity Number 2
Critical Path (A-C-F-I-K)
Early start

Early finish
D 6 11 J 19 22
Activity 5 15 20 3 20 23
duration H 13 19
A 0 6 E 6 7 6 14 20
6 0 6 1 12 13
I 13 18
Latest Latest C 6 9 F 9 13 5 13 18
Start Finish
start finish 3 6 9 4 9 13
K 18 23
B 0 4 G 9 11 5 18 23
4 5 9 2 16 18 48

Critical Path: A, C, F, I and K

Earliest completion Time: 23 DAYS
 Activity Number 2
Determining the Critical Path
The critical path is a path of activities, from the Start
node to the Finish node, with 0 slack times.
Critical Path: AC F I K

The project completion time equals the sum of the

duration times of all activities along the critical path.

Project Completion Time: 23 hours

49
 Activity Number 2
Probability the project will be completed
within 24 hrs: P(X < 24)

The mean completion time E(T) = the sum of the duration

times of all activities along the critical path. Thus E(T) = 23.
2 = 2A + 2C + 2F + 2I + 2K
= 4/9 + 0 + 1/9 + 1 + 4/9
= 2
= 1.414 50
 Activity Number 2
= 1.414
T E (T ) 24 23
z 0.71
1414
.

23 24 Project Duration
(Mean) (Deadline) (in weeks)

From the Standard Normal Distribution table:

P(z < .71) = .5 + .2612 = 0.7612

Thus there is a 76.12% chance that the project will meet its deadline.
51
 Activity Number 3
EarthMover is a manufacturer of road construction
equipment including pavers, rollers, and graders. The
company is faced with a new
project, introducing a new
line of loaders. Management
is concerned that the project might
take longer than 26 weeks to
complete without crashing some
activities.
Dr. C. Lightner Fayetteville
52
State University
 Activity Number 3
Immediate Completion
Activity Description Predecessors Time (wks)
A Study Feasibility --- 6
B Purchase Building A 4
C Hire Project Leader A 3
D Select Advertising Staff B 6
E Purchase Materials B 3
F Hire Manufacturing Staff B,C 10
G Manufacture Prototype E,F 2
H Produce First 50 Units G 6
I Advertise Product D,G 8

53
 Activity Number 3
PERT Network
D
6 I
B 8
Start
A 4 E
Finish
6 3
C G H
3 F 2 6
10

54
 Activity Number 3
Critical Path and Slack Time D 10 16
6 16 22 I22 30
B 6 10 8 22 30
Start
A 0 6 4 6 10 E 10 13 Finish
6 0 6 3 17 20
C 6 9 G 20 22 H 22 28
3 7 10 F 10 20 2 20 22 6 24 30
10 10 20
Timeline:
D=6 I=8 F
S
I
T
N
A A=6 B=4 E=3 G=2
I
R
S
T C=3 F = 10 H=6 H

0 6 10 20 22 30
Critical Path Length: 30 Weeks
 Activity Number 3
Critical Activities and Slack Time Determination
Timeline:
D=6 I=8 F
S
I
T
N
A A=6 B=4 E=3 G=2
I
R
S
T C=3 F = 10 H=6 H

0 6 10 20 22 30
Critical Path Length: 30 Weeks
Slack Time Analysis:
1. All activities in the critical path should have no slack time (ST). Therefore activities
A, B, F, G and I have zero (0) slack time.
2. Activity C has only 1 week of slack time as it needs to end before activity F.
3. Activity D has 6 weeks of slack time as it needs to wait for activity F and G to finish
before activity I can be done. This is from F + G D = 10 + 2 6 = 6 weeks slack time.
4. Activity E has slack time of 7 days. This is from F E = 10 3 = 7 weeks slack time.
5. Activity H has 2 weeks of slack time. This is from I H = 2 weeks slack time.
 Forward and Backward Pass
Forward pass is a technique to move forward through a
diagram to calculate activity duration. Backward pass is its
opposite.

Early Start (ES) and Early Finish (EF) use the forward pass
technique.

Late Start (LS) and Late Finish(LF) use the backward pass
technique.

MEMORY TRIGGER: if the float of the activity is zero, the

two starts (ES and LS) and the two finish (EF and LF) are the
same. Hence, If float of activity is zero, ES = LS and EF = LF.

57
 Activity Number 3
Determination of Early Start, Early Finish, Late Start and Late Finish
Timeline:
D=6 I=8 F
S
I
T
N
A A=6 B=4 E=3 G=2
I
R
S
T C=3 F = 10 H=6 H

0 6 10 20 22 30
Critical Path Length: 30 Weeks
Early Start (ES), Early Finish (EF), Late Start (LS) and Late Finish (LF) ANALYSIS:
1. Activity A should start at zero (0) and this is also its early start. The earliest possible time it will
finish is on week 6. Therefore ES is 0 and EF is 6. The late start (LS) is zero (0) and the late
finish (LF) is 6. ES = 0, EF = 6, LS = 0 and LF = 6.

2. Activity B should start after activity A so therefore the earliest time that activity B can start
(ES) is at week 6. The late start (LS) for Activity B is still on week 6 and its late finish (LS) is
length of activity A + length of activity B = 6 + 4 = 10 weeks. ES = 6, EF = 10, LS = 6 and LF
= 10.
 Activity Number 3
Determination of Early Start, Early Finish, Late Start and Late Finish
Timeline: D=6
D=6 I=8 F
S
I
T
N
A A=6 B=4 E=3 G=2
E=3 I
R
S
T C=3 F = 10 H=6 H
C=3 H=6

0 6 10 20 22 30
Critical Path Length: 30 Weeks
Early Start (ES), Early Finish (EF), Late Start (LS) and Late Finish (LF) ANALYSIS:
3. Activity C can start only after activity A therefore the Early Start (ES) is on week 6. The Early
Finish (EF) is the durations for Activities A and C, therefore A + C = 6 + 3 = 9. However, activity
B can begin at a later time (in red box) also provided that Activity F will not be delayed, or its
timeline will not move to the right. In this case, the Late Start (LS) for B then is on week 7 and
the Late Finish (LF) is 10. ES = 6, EF = 9, LS = 7 and LF = 10.

The same principle and procedures are applied to other activities such with D,
E and H...
 Activity Number 3
Summary of the Earliest/Latest Times
Activity ES EF LS LF Slack
A 0 6 0 6 0*
B 6 10 6 10 0*
C 6 9 7 10 1
D 10 16 16 22 6
E 10 13 17 20 7
F 10 20 10 20 0*
G 20 22 20 22 0*
H 22 28 24 30 2
I 22 30 22 30 0*

60
 Activity Number 3
Early Start, Early Finish and Late Start and Late Finish

Early start

Early finish
D 10 16
6 16 22 I 22 30
B 6 10 8 22 30
Start
A 00 66 4 6 10 E 10 13 Finish
6 00 66 3 17 20
C 6 9 G 20 22 H 22 28
3 7 10 F 10 20 2 20 22 6 24 30
Latest 10 10 20
Activity finish
duration
Latest
start
 Crashing of Activities
Project crashing is a method for shortening
the project duration by reducing the time of
one or more of the critical project activities
to less than its normal activity time.

The object crashing is to reduce project

duration while minimizing the cost of
crashing.

62
 Crashing of Activities
OBJECTIVES OF CRASHING
To reduce the scheduled completion time to
reap the results of the project sooner.

As project continue over time, the team

consume indirect costs.
There may be direct financial penalties for
not completing a project on time.

63
 Crashing of Activities
KEY TERMS
1. CRASHING is reducing project time by
expending additional resources.

2. CRASH TIME is an amount of time an activity is

reduced.

3. CRASH COST is the cost of reducing activity.

64
 Crashing of Activities
Crashing in Activity #3:
The completion time for this project in Activity 3 using
normal times is 30 weeks.

Which activities should be crashed, and by how

many weeks, in order for the project to be
completed in 26 weeks?

65
 Crashing of Activities in Activity 3
Normal Costs and Crash Costs:
Normal Crash Crash
Activity Time Cost Time Cost
A) Study Feasibility 6 $ 80,000 5 $100,000
B) Purchase Building 4 100,000 4 100,000
C) Hire Project Leader 3 50,000 2 100,000
D) Select Advertising Staff 6 150,000 3 300,000
E) Purchase Materials 3 180,000 2 250,000
F) Hire Manufacturing Staff 10 300,000 7 480,000
G) Manufacture Prototype 2 100,000 2 100,000
H) Produce First 50 Units 6 450,000 5 800,000
I) Advertising Product 8 350,000 4 650,000
COST in Crashing of Activities:
1.0 Consider the weekly (or monthly, daily, etc) cost for crashing an activity.
Example: Activity A) Study Feasibility crash cost is $20,000 per week in reducing the
normal time of 6 weeks to 5 weeks.
2.0 Activities B and G do not have crash costs. Activity C has cost of $50,000 per week;
Activity D has a $50,000 crash cost per week and $150,000 for the three weeks;
Activity E has $70,000 cost per week; Activity F has $60,000 per week crash cost;
Activity H has $350,000 cost a week; and Activity I has $75,000 per week crash cost. 66
 Crashing of Activities in Activity 3
Normal Costs and Crash Costs:
Normal Crash Crash Crash
Activity Time Cost Time Cost Cost/wk
A) Study Feasibility 6 $ 80,000 5 $100,000 $20K
B) Purchase Building 4 100,000 4 100,000 $0
C) Hire Project Leader 3 50,000 2 100,000 $50K
D) Select Advertising Staff 6 150,000 3 300,000 $50K
E) Purchase Materials 3 180,000 2 250,000 $70K
F) Hire Manufacturing Staff 10 300,000 7 480,000 $60K
G) Manufacture Prototype 2 100,000 2 100,000 $0
H) Produce First 50 Units 6 450,000 5 800,000 $350K
I) Advertising Product 8 350,000 4 650,000 $75K
STEPS in DETERMINING the Minimum Cost in crashing Project Activities:
1. Establish a table for the crash cost in terms of cost/wk.
2. Determine which activity/activities has the minimum to maximum cost.
3. Consider first crashing the activities that fall into the Critical Path Method (CPM).
4. Consider the activities from the Critical Path that when crashed will give a minimum
cost.
67
 Activity Number 3
Crashing of Activities
Timeline:
D=6 I=8 F
S
I
T
N
A A=6 B=4 E=3 G=2
I
R
S
T C=3 F = 10 H=6 H

0 6 10 20 22 30
Critical Path Length: 30 Weeks

Cost of Crashing of Project Activities:

1. Crash Activity A (activity along the critical path) with 1 week; Reduced the time from
30 weeks to 29 weeks; Crash cost: $20K
2. No crashing of activity B is allowed; Crashing activity C will not give impact to the
duration. Crashing activity D will not reduce the length of time of the project.
3. Crashing of activity F (activity along the critical path) for three weeks will reduce
the project length from 29 weeks to 26 weeks, which is our target. Crash cost: $180K
4. No more crashing of activities are needed for other activities.
 Activity Number 3
Crashing of Activities
Timeline:
D=6 I=8 F
S
I
T
N
A A=5 B=4 E=3 G=2
I
R
S
T C=3 F=7 H=6 H

0 5 9 16 18 26
Critical Path Length: 26 Weeks

RESULTS in Crashing of Activities:

1. ONLY Crashed activities A and activities F.
2. Cost for crashing activities A is $20K and F is $180K.
3. Total cost of minimizing activities A and B is $200K. This is the
least amount of crashing activities to reduce the project time
duration from 30 to 26 weeks.
Thank You.
FOR QUESTIONS & COMMENTS,
EMAIL ME AT
JTDELLOSA@GMAIL.COM
70