accelerating the project edina nagy lajos kiss szabolcs hornyák
Post on 21-Dec-2015
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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…