Page 227 - DMGT521_PROJECT_MANAGEMENT

Project Management

Notes
Table 13.2: Project Duration and Total Cost

Figure Activities Crashed Project Total Total Total
No. Duration in Direct Cost Indirect Cost
Weeks Cost
13.3 None 30 45,200 60,000 105,200
13.4 (2-4) 29 46,700 58,000 104,700
13.5 (2-4 and (5-6) 27 49,500 54,000 103,500

13.6 (1-2), (2-4) and (5-6) 24 52,500 48,000 100,500

13.7 (1-2), (2-4), (5-6), and (6-7) 21 55,500 42,000 97,200

13.8 (1-2), (2-4), (3-5), (5-6), and 20 56,400 40,000 96,400
(6-7)

13.9 (1-2), (2-4), (3-5), (5-6), (4-6), 19 1/2 57,600 39,000 96,600
and (6-7)

!
Caution Crashing reduces time but enhances direct costs because of factors like overtime
payments, extra payments, and wastage.

Self Assessment

Fill in the blanks:
7. The ………………… associated with a project can be divided into two components: direct
costs and indirect costs.
8. ………………… are incurred on direct material and direct labour.
9. Crashing reduces time but enhances direct costs because of factors like …………………,
extra payments, and wastage.
10. The relationship between time and ………………… cost can be reasonably approximated
by a downward sloping straight line.

13.5 PERT Network Analysis – Steps

The steps are as follows:
1. Clearly defining the goal of the project,
2. Obtaining a work-break structure to a set of individual jobs, and arranging them in a
logical fashion,
3. Estimating the job duration, making provisions for optimistic and pessimistic schedules,
4. Identifying the resource requirement constraints,
5. Locating the schedule of dates for each activity by planning a detailed control structure,

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