Chapter Nine: Reducing Project Duration

Time Is Money: Emphasizes cost-time tradeoffs in project management. - Reducing the duration of a critical activity usually results in additional direct costs. - Cost-time solutions focus on reducing (crashing) activities on the critical path to shorten overall project duration. - 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

Resources Not Constrained: - Adding resources - Outsourcing project work - Scheduling overtime - Establishing a core project team - Do it twice—fast and then correctly
Resources Constrained: - Fast-tracking - Critical-chain method - Reducing project scope - Compromising quality

Project Indirect Costs: - Costs that cannot be associated with any particular work package or project activity (e.g., supervision, administration, consultants, interest). - These costs vary (increase) with time, meaning reducing project time directly reduces indirect costs.
Project Direct Costs: - Normal costs directly assignable to specific work packages or project activities (e.g., labor, materials, equipment, subcontractors). - Crashing activities increases direct costs.

Compute Total Costs for specific durations and compare with benefits of reducing project time.
Search Critical Activities for lowest direct-cost activities to shorten project duration.
Identifying Direct Costs to reduce project time involves gathering information on direct and indirect costs of specific project durations.

Graph Overview: - Total costs plotted against project duration. - Demonstrates the optimum cost-time point where total costs are minimized.
Key Points: - The total cost consists of both direct and indirect costs. - The graph visually represents the relationship between project duration and associated costs.

Find total direct costs for selected project durations.
Find total indirect costs for selected project durations.
Sum direct and indirect costs for these durations.
Compare additional cost alternatives for benefits of duration or cost reduction.

Focus on shortening 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 the maximum feasible time reduction. - The slope represents a constant cost per unit of time. - All accelerations must occur within the normal and crash times.

Cost slope formula: $ext{Cost slope} = rac{ ext{Crash Cost} - ext{Normal Cost}}{ ext{Normal Time} - ext{Crash Time}}$
Definitions: - Normal Time: Represents the lowest cost, efficient method of completing an activity. - Normal Cost: Direct cost associated with completing an activity in Normal Time. - Crash Cost: Direct cost associated with the shortest possible time in which an activity can be realistically completed.

Provides a breakdown of direct costs associated with different activities, their maximum durations, and costs at normal and crash points.
Example:
  - Activity A:
    - Slope: $20
    - Maximum Crash Time: 1
    - Normal Cost: $50
    - Crash Cost: $70
  - This table illustrates how time affects the overall project costs significantly.

Tabulated summary showcasing project duration alongside direct, indirect, and total project costs:
| Project Duration | Direct Costs | Indirect Costs | Total Costs | |------------------|--------------|----------------|-------------| | 25 | $450 | $400 | $850 | | 24 | $470 | $350 | $820 | | … | … | … | … |

Using the Project Cost–Duration Graph: Understanding the balance between time and cost.
Crash Times: Recognizing when and how to use crash times effectively.
Linearity Assumption: Important to note that the assumptions may not always hold in practice,
Choice of Activities to Crash Revisited: Reinforces the need to be strategic about which activities to shorten to maintain project viability.
Time Reduction Decisions and Sensitivity: Highlights the need to assess the impact of time reductions on overall project goals.

Discusses commonly used options for cutting project costs, namely: - Reducing project scope. - Shifting responsibilities to the owner. - Outsourcing project activities or entire projects. - Brainstorming for potential cost-saving options.

Crashing: The technique to reduce project duration.
Crash Point: The specific time during which an activity can be completed in a compressed manner.
Crash Time: The reduced time to achieve the crash point.
Direct Costs: Costs that can be directly attributed to a project activity.
Fast-tracking: An approach where tasks that can occur simultaneously are overlapped.
Indirect Costs: Costs not directly attributable to specific project activities.
Project Cost-Duration Graph: A graphical representation to evaluate trade-offs between project duration and cost.

Breakdown of project activities with their predecessors and duration. - For example: - Activity A: None, Duration 2. - Activity B: A, Duration 4. - Decision to shorten activities B or H which can reduce the project duration by 2 weeks with the least impact on project viability needs to be made.