Scribd
Upload
72 views21 pages

Strategies for Reducing Project Duration

This document discusses options for reducing project duration to lower costs. It begins by explaining that reducing time on critical activities usually increases direct costs but lowers indirect costs from shorter project time. Options for accelerating projects are identified, including adding resources, outsourcing work, overtime when unconstrained, and fast-tracking or reducing scope when constrained. A project cost-duration graph is presented as a tool to analyze the tradeoff between crashing activities to reduce duration versus the added direct costs. The graph is constructed by determining activities that could be shortened at the lowest increase in cost per time reduction. Practical considerations for using this analysis are also outlined.

Uploaded by

Rand Nasa'a
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
72 views21 pages

Strategies for Reducing Project Duration

This document discusses options for reducing project duration to lower costs. It begins by explaining that reducing time on critical activities usually increases direct costs but lowers indirect costs from shorter project time. Options for accelerating projects are identified, including adding resources, outsourcing work, overtime when unconstrained, and fast-tracking or reducing scope when constrained. A project cost-duration graph is presented as a tool to analyze the tradeoff between crashing activities to reduce duration versus the added direct costs. The graph is constructed by determining activities that could be shortened at the lowest increase in cost per time reduction. Practical considerations for using this analysis are also outlined.

Uploaded by

Rand Nasa'a
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Reducing Project Duration

C HAPTE R NI NE
Ayman Hussien 5180041
Project Managment Class
Where We Are Now
Chapter
Outline
1. Rationale for Reducing Project Duration .

2. Options for Accelerating Project


Completion.

A. Options When Resources Are Not Constrained .

i. Adding Resources .
ii. Outsourcing Project Work.
iii. Scheduling Overtime .
iv. Establish a Core Project Team .
v. Do It Twice—Fast and Correctly.

B. Options When Resources Are Constrained .


i. Fast-Tracking .
ii. Critical-Chain .
iii. Reducing Project Scope.
iv. Compromise Quality .

3. Project Cost-Duration Graph.

4. Constructing a Project Cost-Duration Graph.


A. Determining the Activities to Shorten .
B. A Simplified Example .

5. Practical Considerations .

A. Using the Project Cost-Duration Graph


B. Crash Times
C. Linearity Assumption
D. Choice of Activities to Crash Revisited
E. Time Reduction Decisions and Sensitivity
6. What if Cost, Not Time, Is the Issue?

A. Reduce Project Scope .


B. Have Owner Take on More Responsibility.
C. Outsourcing Project Activities or Even the Entire Project.
D. Brainstorming Cost Savings Options .
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 project duration dates:
 Time-to-market pressures
 Unforeseen delays
 Incentive contracts (bonuses for early completion)
 Imposed deadlines and contract commitments
 Overhead and public goodwill costs
 Pressure to move resources to other projects
Options for Accelerating Project Completion

 Resources Not Constrained  Resources Constrained


 Adding resources  Fast-tracking
 Outsourcing project work  Critical-chain
 Scheduling overtime  Reducing project scope
 Establishing a core project team  Compromise quality

 Do it twice—fast and then correctly


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.
 Project 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.
Project Cost–Duration Graph
Reducing Project Duration
to Reduce Project Cost

Identifying
Identifyingdirect
direct costs
coststo
toreduce
reduceproject
project time
time

Gather
Gatherinformation
informationabout
aboutdirect
directand
andindirect
indirect
costs
costsof
ofspecific
specificproject
projectdurations.
durations.

Search
Searchcritical
criticalactivities
activitiesfor
forlowest
lowestdirect-cost
direct-cost
activities to shorten project duration.
activities to shorten project duration.

Compute
Computetotal
totalcosts
costsfor
forspecific
specificdurations
durationsand
and
compare
compareto
tobenefits
benefitsofofreducing
reducingproject
projecttime.
time.
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.
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
Activity Graph
Cost–Duration Trade-off Example
Cost–Duration Trade-off
Example (cont’d)
Cost–Duration Trade-off
Example (cont’d)
Cost–Duration Trade-off Example
(cont’d)
Summary Costs by Duration
Project Cost–Duration Graph
Practical Considerations

 Using the Project Cost–Duration


Graph
 Crash Times
 Linearity Assumption
 Choice of Activities to Crash
Revisited
 Time Reduction Decisions and
Sensitivity
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.
Project Priority Matrix: Whitbread
Project

You might also like