Time Cost Tradeoff Analysis

This set of vocabulary flashcards covers project cost structures, cash flow analysis, S-Curves, and the mechanics of time-cost tradeoff and simple compression methods in construction management.

Cash flow analysis

The study of the disbursement and receipt of funds involving labor, materials, equipment, subcontractors, and contract provisions.

S-Curve

A graphic representation of cumulative funds where the abscissa represents project duration and the ordinate represents cumulative fund flow.

Abscissa

The horizontal ($x$) axis of an S-Curve, which represents the project duration.

Ordinate

The vertical ($y$) axis of an S-Curve, which represents the cumulative fund flow.

Retainage

A portion of the contract funds held back from the contractor, typically released upon project completion.

Direct costs

Costs readily identified as related to putting facility components in place, such as material cost, equipment cost, and labor cost.

Job Overhead

Costs not specifically associated with a particular work item, incurred whether or not productive work is accomplished, including site superintendents and temporary facilities.

Company Overhead

Costs not associated with a specific project, such as corporate personnel, office services, group supplies, and administration.

Profit

The part of the return on investment or services earned by the company over its total cost.

Indirect Cost

The total sum of Overhead (Job + Company) and Profit.

All Normal schedule

The original project schedule before any adjustments are made to activity durations.

Least Cost schedule

The project schedule associated with the minimum total project cost.

Least Time schedule

The schedule achieved when all critical activities are shortened to their minimum duration.

All Crashed schedule

The schedule where every activity in the project is reduced to its shortest possible duration.

Simple Compression Method

A process of determining least cost schedules by identifying network critical paths and crashing activities with the least additional cost per day.

Critical activity

An activity on the critical path whose duration must be decreased to reduce the overall project duration.

Cost per Day (to shorten)

The additional direct cost incurred for every day an activity's duration is reduced (crashed), calculated as the difference between crash cost and normal cost divided by the days shortened.