CE 366
PROJECT MANAGEMENT AND
ECONOMICS
Robert G. Batson, Ph.D., P.E.
Professor of Construction
Engineering
The University of Alabama
[email protected]
Chapter 7:
Project Time Acceleration
Sources of Need For Project Time Reduction
Overall Project
• Planned schedule will not meet contracted completion
date
• Owner requests quotation to finish work early
• Contractor has reasons to finish early
• Work underway, delays have occurred, need to recover
lost time
Milestone Event
• Computed timing of event is later than desired
• Network interface requirement
• Need to recover lost time by the milestone
Removing “Project Contingency” is not the way to
accelerate the project
3
Project Time Reduction (Acceleration)
• Also known as
– Least-cost expediting
– Project compression
– Activity time-cost trade-off or “crashing”
• Does not require expediting all project activities (shotgun
approach)
• To reduce the project completion time, the project critical path
must be shortened
• To reduce the time to achieve a milestone or interface event,
the event critical path must be shortened
• As critical activities are accelerated to shorten critical path(s)
– The floats along all paths to the accelerated activity change
– The critical path eventually changes (hence activities may
change from non-critical to critical, or vice versa)
– Second critical path may emerge, or disappear
7.2
Shortening the Longest Time Path
Two ways to accomplish shortening
1. Modify the job logic, such that the longest path is reduced
–
–
–
2.
Rearrange order of activities
Split activities into two
Revise lag time logic
Reduce the time duration (crash) one or more critical path
activities
–
–
–
Increased manpower or overtime work
Additional equipment
Computerized time-cost trade-off analysis will actually find the
most efficient sequence of such activity time reductions, with
input such as Figure 7.1
Remember, after each logic or activity duration adjustment, the
critical path and float times must be recomputed.
7.3
6
Handling Direct Cost Increases in
Project Acceleration Study
• Direct cost of an activity is made up of the expense of labor,
equipment, materials and subcontracting
• Each activity is assumed planned at its “normal cost” and
“normal duration”
• Any variation in an activity time from that estimated, either
more or less, will result in a commensurate increase in its
direct cost
• An activity that is feasible to accelerate (crash) will have a
“crash cost” and “crash time” as in Figure 7.1
• The least total direct cost for the project is the cost associated
with the normal project duration (as estimated by CPM)
• If the project duration is to be reduced, the direct costs of the
activities actually shortened will usually be increased;
therefore the total direct cost will increase as well.
7.4
Estimating Indirect Cost Decreases in
Project Acceleration Study
• If a specific activity is shortened, its direct
expense increases, but if it leads to a
corresponding decrease in overall project
duration, the indirect cost is reduced
• There are two types of project indirect costs
– Time-constant overhead expense
– Time-variable overhead expense
• For the highway bridge, each day reduction
from the normal schedule (70 days) is worth
$43,690/70 = $624 reduction in overhead
7.5
Shortening the Critical Path at No
Extra Direct Cost
A. Restudy of Critical Activity Duration
– Error could be discovered
– Original time estimates based on invalid assumptions
B. Restudy of Project Plan
–
–
Rework project logic
Modify the design (in design-build)
C. Critical Activities in Parallel, not Series
D. Subdivision of Critical Activities, with new logic
E. Subcontracting, if it substitutes workers/equipment at
same direct cost yet enables activities to overlap
Items B, C, D require scheduler to use personal
technical knowledge or obtain inputs from experts,
individually or in team meetings
7.6
10
11
Shortening the Critical Path by
Expediting
• Expediting actions, such as those in Figure 7.4,
involve additional direct cost
– some involve adding an activity, that changes the
network logic in a favorable way, such as Action A
which saves 6 days
– others involve accelerating a particular activity by
expending direct activities
• Figure 7.5 organizes the actions from smallest to
largest increment in direct cost, and show
cumulative direct costs (also see Figure 7.6)
• Figure 7.7 shows overhead cost reduction, project
direct cost increase, and project direct cost +
overhead, as a function of time
7.7
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14
15
16
Significance of Project Time-Cost
Trade-Off Curve
• What durations yields minimum cost to the
contractor?
• If normal plan dictates a late completion, and daily
penalties are known, how much expedited cost is
justified; that is, what duration best balances costs
with penalty avoidance?
• Owner may ask for a range of price quotes, one
for each completion time
• What are the limits that may be achieved by
expediting?
• Some of the most useful CPM-based information
the scheduler/estimator can provide to the project
manager
7.8
Project Extension
• Projects, of course, experience “slippage” in milestone
or completion dates, if the project actualization does
not match the plan
• The usual rule is that projects whose end dates slip
will cost more, in direct cost of those activities that
took longer than planned, and in overhead costs
• Sometimes projects are estimated using some or all
activities at their expedited (crash time) limits, and this
anticipated action proves unnecessary once the CPM
schedule is developed and evaluated
• Some of these activities can be relaxed to their normal
time and cost
– Critical path activities if project duration can be extended
– Non-critical path activities if project duration is held
7.9