Accelerating the project
Edina Nagy
Lajos Kiss
Szabolcs Hornyák
Overview
• Introduction
• Project acceleration terminology
Normal Time, normal cost
Crash Time, crash cost
Direct Costs
Indirect Costs
Total Project Cost
Optimum Project Duration
• Project acceleration principles
• References
Introduction
„When I know all information, only
can make a right decisions.”
Paulo Coelho
Introduction
Steps of right decision:
Definiate: Time and costs
Analysed the possibilities
Compare the opportunities
Choose the best way
Project acceleration terminology
Normal Time, normal cost
This is the usual time that would be needed to
carry out the electrical services work under
normal circumstances, estimated at 12 days with
a cost of £10.000.
Project acceleration terminology
Crash Time, crash cost
The crash time is the maximum time the
operation can be compressed by increasing the
resources.
Crash time: 8 days
Crash cost: £18.000
Project acceleration terminology
Cost Slope
Project acceleration terminology
Activity ranking
• Analysed the precedence
relationship
• Identified the critical
activities
• Ranking by the cost
• Reduce the duration
• Define the critical path
Project acceleration terminology
Direct costs:
• Labour
• Plants
• Materials
• Subcontractors
• Overheads and profit
Project acceleration terminology
Indirect costs:
• Project supervision
• Site hutting and
accomodation
• Site office telephones,
heating and lighting
• Vans and site transport
Project acceleration terminology
Direct costs
+ Indirect costs
Total cost
Optimum project duration
Project acceleration principles
Example – based on a network arrow diagram
Project acceleration principles
PROJECT DATA
Activity
Normal Time
Normal Cost
Crash Time
Crash Cost
A
6
12 000
4
20 000
B
8
24 000
4
48 000
C
3
18 000
2
20 000
D
6
18 000
4
24 000
E
6
36 000
4
54 000
F
10
10 000
6
50 000
G
5
20 000
3
30 000
H
8
40 000
6
50 000
I
2
20 000
2
20 000
Summation
£198 000
Indirect costs £2000 per week
Project datas
Project acceleration principles
Normal time / Normal Cost analysis
Project acceleration principles
Cost Slope Assessment
Activity
Normal Time
Crash Time
Saving in Time
Normal Cost
(£000)
Crash Cost
(£000)
Increase in Cost
(£000)
Cost Slope
Float
Order/ Ranking
A
6
4
2
12
20
8
4000
Zero
2nd
E
6
4
2
36
54
18
9000
Zero
3rd
F
10
6
4
10
50
40
10000
Zero
4th
D
6
4
2
18
24
6
3000
Zero
1st
B
8
4
4
24
48
24
6000
5
G
5
3
2
20
30
10
5000
3
H
8
6
2
40
50
10
5000
3
I
2
2
0
20
20
0
0
5
C
3
2
1
18
20
2
2000
5
Normal time / Normal Cost analysis
Non critical
operations
Project acceleration principles
Revised arrow diagram
Project acceleration principles
Activity
Normal Time
(weeks)
Crash Time
(weeks)
D
6
4
2
3000
6000
A
6
4
2
4000
8000
E
6
5
1
9000
9000
Reduction in overall time =
Reduction in Time (weeks) Cost slope (£)
Increase in direct
cost (£)
5
Increase in direct cost due to this
reduction in time =
23000
Reduction in project period
Total Project Costs at week 23.
Direct costs =
£198 000 + £23 000 =
£221 000
Indirect costs = 23 weeks x £2 000 =
£46 000
Total Project Cost
£267 000
Therefore, in order to achieve an acceleration of 5 weeks, the project cost will be increased by £13 000, that is:
Crash Cost =
£267 000
Less Normal Cost =
£254 000
Acceleration Cost =
£13 000
References
- pp. 186-196
Paragraph 9.9
Accelerating the project
Thanks…