Accelerating the project

Edina NagyLajos Kiss

Szabolcs Hornyák

Overview

• Introduction• Project acceleration terminology

Normal Time, normal costCrash Time, crash costDirect Costs Indirect CostsTotal Project CostOptimum Project Duration

• Project acceleration principles• References

„When I know all information, only can make a right decisions.”

Paulo Coelho

Introduction

Steps of right decision:

Definiate: Time and costsAnalysed the possibilitiesCompare the opportunitiesChoose the best way

Introduction

Project acceleration terminology

Normal Time, normal costThis 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 costThe crash time is the maximum time the

operation can be compressed by increasing the resources.

Crash time: 8 daysCrash 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 datas

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 acceleration principles

Normal time / Normal Cost analysis

Project acceleration principles

Normal time / Normal Cost analysis

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

Non critical operations

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

Project acceleration principles

Revised arrow diagram

Project acceleration principles

Activity Normal Time (weeks)

Crash Time (weeks) Reduction in Time (weeks) Cost slope (£) Increase in direct

cost (£)

D 6 4 2 3000 6000

A 6 4 2 4000 8000

E 6 5 1 9000 9000

Reduction in overall time = 5

Increase in direct cost due to this reduction in time = 23000

Total Project Costs at week 23.Direct costs = £198 000 + £23 000 = £221 000

Indirect costs = 23 weeks x £2 000 = £46 000Total 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 000Less Normal Cost = £254 000Acceleration Cost = £13 000

Reduction in project period

References

- pp. 186-196Paragraph 9.9Accelerating the project

Thanks…