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Consider the following project. Assume indirect costs to be $10,000 per week, and that there are no penalty costs for late completion. Total normal direct

Consider the following project. Assume indirect costs to be $10,000 per week, and that there are no penalty costs for late completion. Total normal direct costs, to complete the project in normal time, are $200,000; they would like to crash the project as long as it saves money (i.e. find the MINIMUM COST SCHEDULE). What would be the total REDUCTION in project duration? and the REDUCTION in total project costs? Answer if the project is crashed to achieve the minimum cost schedule?

Activity

Immediate Predecessors

Normal Time (weeks)

Max time Reduction (weeks)

Cost of Crashing per Week ($)

A

None

7

2

12000

B

None

6

2

3000

C

None

8

4

9000

D

A, B

4

3

7000

E

C

7

4

4000

F

D

7

1

4000

G

E

5

2

9000

H

F, G

4

1

6000

I

G

2

1

3000

(Note that the table provides normal time, maximum amount that normal time can be reduced by, and cost per week to reduce normal time).

For the sake of ensuring that you start on the right foot, the paths and durations are as follows:

A-D-F-H = 22 weeks

B-D-F-H = 21 weeks

C-E-G-H = 24 weeks

C-E-G-I = 22 weeks

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