M6-2 Assignment

When deciding on whether to crash project activities or not, a project manager was faced with the following information. Activities of the critical path are highlighted with an asterisk:

Normal	Crashed
Activity	Cost	Duration	Extra Cost	Duration
A	5,000	4 weeks	4,000	3 weeks
B*	10,000	5 weeks	3,000	4 weeks
C	3,500	2 weeks	3,500	1 week
D*	4,500	6 weeks	4,000	4 weeks
E*	1,500	3 weeks	2,500	2 weeks
F	7,500	8 weeks	5,000	7 weeks
G*	3,000	7 weeks	2,500	6 weeks
H	2,500	6 weeks	3,000	5 weeks

1. What is the project's normal critical path and duration of project?

2. Calculate the 'Per week cost' for crashing each activity.

3. Identify the sequencing of the activities to be crashed in the first four steps. Which of the critical activities should be crashed first? Why?

4. After four iterations involving crashing project activities, what has the critical path shrunk to? (Assume all noncritical paths are < a fully crashed critical path. - In other words, critical path tasks will not change) - Show calculations.

5. Suppose project overhead costs accrued at a fixed rate of $500 per week. Also assume that a project penalty clause kicks in after 19 weeks. The penalty charged is $5,000 per week. When the penalty charges are added, what does the total project cost curve look like? Develop a table listing the costs accruing on a per-week basis.

6. If there were no penalty payments accruing to the project, would it make sense to crash any project activities? Show your work.