Project Management
Quản lý Dự án
Dr. TRAN QUYNH LE
Dr. NGUYEN DUC DUY
Industrial Systems Engineering Department
Mechanical Engineering Faculty
Ho Chi Minh City University of Technology (HCMUT)–
VNUHCM
Chapter 9
Reducing Project Duration
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LEARNING OUTCOME
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Rationale for Reducing Project Duration
▪ Time Is Money: Cost-Time Tradeoffs
• Reducing the time of a critical activity usually incurs additional direct costs.
➢ Cost-time solutions focus on reducing (crashing) activities on the critical path to
shorten overall duration of the project.
• Reasons for imposed (thiết lập, áp đặt) project duration dates:
➢ Customer requirements and contract commitments
➢ Time-to-market pressures
➢ Incentive contracts (bonuses for early completion)
➢ Unforeseen delays
➢ Overhead and goodwill costs
➢ Pressure to move resources to other projects
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Options for Accelerating Project
Completion
▪ Adding Resources
▪ Outsourcing Project Work
▪ Scheduling Overtime
▪ Establishing a Core Project Team
▪ Do It Twice—Fast and Correctly:
• building a “quick and dirty” short-term solution
▪ Fast-Tracking:
• rearrange the logic of the project network so that critical activities are done in parallel
(concurrently) rather than sequentially
▪ Critical-Chain
▪ Reducing Project Scope
▪ Compromise Quality
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Explanation of Project Costs
▪ Project Indirect Costs
• Costs that cannot be associated with any particular work package or project
activity.
➢ Supervision, administration, consultants, and interest
• Costs that vary (increase) with time.
➢ Reducing project time directly reduces indirect costs.
▪ Direct Costs
• Normal costs that can be assigned directly to a specific work package or project
activity.
➢ Labor, materials, equipment, and subcontractors
• Crashing activities increases direct costs.
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Reducing Project Duration to Reduce
Project Cost
Identifying direct costs to reduce project time
Gather information about direct and indirect
costs of specific project durations.
Search critical activities for lowest direct-cost
activities to shorten project duration.
Compute total costs for specific durations and
compare to benefits of reducing project time.
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Project Cost—Duration Graph
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Constructing a Project Cost—Duration Graph
▪ Find total direct costs for selected project durations.
▪ Find total indirect costs for selected project durations.
▪ Sum direct and indirect costs for these selected project durations.
▪ Compare additional cost alternatives for benefits.
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Constructing a Project Cost—Duration Graph
▪ Determining Activities to Shorten
• Shorten the activities with the smallest increase in cost per unit of time.
• Assumptions:
➢ The cost relationship is linear.
➢ Normal time assumes low-cost, efficient methods to complete the activity.
➢ Crash time represents a limit—the greatest time reduction possible under realistic
conditions.
➢ Slope represents a constant cost per unit of time.
➢ All accelerations must occur within the normal and crash times.
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Activity Graph
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Cost—Duration Trade-off Example
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Cost—Duration Trade-off Example (cont’d)
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Cost—Duration Trade-off Example (cont’d)
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Cost—Duration Trade-off Example (cont’d)
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Cost—Duration Trade-off Example (cont’d)
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Summary Costs by Duration
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Project Cost—Duration Graph
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Practical Considerations
▪ Using the Project Cost—Duration Graph
▪ Crash Times
▪ Linearity Assumption
▪ Choice of Activities to Crash Revisited
▪ Time Reduction Decisions and Sensitivity
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What if Cost, Not Time is the Issue?
▪ Commonly Used Options for Cutting Costs
• Reduce project scope
• Have owner take on more responsibility
• Outsourcing project activities or even the entire project
• Brainstorming cost savings options
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Key Terms
▪ Crash point
▪ Crash time
▪ Direct costs
▪ Fast-tracking
▪ Indirect costs
▪ Outsourcing
▪ Phase project delivery
▪ Project cost–duration graph
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