29.6, Normal time, Crash time, Normal cost and Crash costs are given in the table. 29.4 is drawn.įor a network shown in Fig. In order to understand the effect of duration on the total cost of the project, Fig. If however, the critical path is longer than the project’s optimum duration, and then there is need to reduce the duration of some activities, so that the critical path is equal to the optimum duration. If the critical path is equal or shorter than this optimum duration, there is no need to reduce the network, i.e., crashing the duration of any activity.
With the help of above curves, we can determine optimum duration, which is also referred as target duration. Total cost of a project is the sum of the direct and the indirect costs. When there is a loss of profits due to inability to meet the demand or some penalty due to delay, a corresponding cost increase (known as outage loss), must be added to the cost of overheads, as shown in the Fig. This relationship would be represented by a straight line, with a slope equal to daily overhead. Relationship between indirect cost and project duration is shown in Fig. Indirect cost rises with increased duration.
