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Managing

Projects
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
• This material is used in Project
Management course of Dadang
Syarif SS from the Politeknik
Caltex Riau
• The slides are originally to
accompany Krajewski & Ritzman
Operations Management: Strategy
and Analysis, Fifth Edition © 1999
Addison Wesley Longman. All
rights reserved.

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
TERMINOLOGY
• Activity on Arrow (AOA) • Activity on Node (AON)
diagram diagram
– A network diagram where all – A network diagram where
activities are represented by all activities are
arrows and events represented represented by the node
by circles. or event, usually as a box,
• Activity and the arrows are used
merely to show the logical
– A clearly defined task with flow of the project.
known duration: often used to
include a series which together • Node
complete a particular step or – Another name for event
part of the work. • Event
– A point in the progress of
the project after total
completion of all
preceding activities
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Activity Relationships
Activity Relationship

S precedes T, which precedes U.

AOA AON

S T U
1 2 3 4 S T U

Figure 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Activity Relationships
Activity Relationship

S and T must be completed before U can be started.

AOA AON

1 S S
U
T 3 4 U

2 T

Figure 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Activity Relationships
Activity Relationship

T and U cannot begin until S has been completed.

AOA AON

T 3 T
S
1 2 U S

4 U

Figure 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Activity Relationships
Activity Relationship

U cannot begin until both S and T have been completed;


V cannot begin until T has been completed.

AOA AON

S U
1 3 5 S U

Dummy
T V
2 4 6 T V

Figure 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Activity Relationships
Activity Relationship

T and U cannot begin until S has been completed; V


cannot begin until both T and U have been completed.

AOA AON

S T V
1 2 4 5 S T V

Dummy
U
3 U

Figure 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Immediate
Activity Description Predecessor(s)
A Select administrative and medical staff. —
B Select site and do site survey. —
C Select equipment. A
D Prepare final construction plans and layout. B
E Bring utilities to the site. B
F Interview applicants and fill positions in nursing,
support staff, maintenance, and security. A
G Purchase and take delivery of equipment. C
H Construct the hospital. D
I Develop an information system. A
J Install the equipment. E,G,H
K Train nurses and support staff. F,I,J

Example 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Immediate
Activity
AON Network Description Predecessor(s)
A Select administrative and medical staff. —
B Select site and do site survey. —
C Select equipment. A A
D Prepare final construction plans and layout. B
E Bring utilities to the site. B
F Interview
Start applicants and fill positions in nursing,
support staff, maintenance, and security. A
G Purchase and take delivery of equipment. C
H Construct the B hospital. D
I Develop and information system. A
J Install the equipment. E,G,H
K Train nurses and support staff. F,I,J

Example 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Immediate
Activity
AON Network Description Predecessor(s)
A Select administrative and medical staff. —
B Select site and do site survey. —
C Select equipment. A F A
D Prepare final construction plans and layout. B
E Bring utilities to the site. B
F Interview
Start applicantsCand fill positions in nursing,
support staff, maintenance, and security. A
G Purchase and take delivery of equipment. C
H Construct the B hospital.
D D
I Develop and information system. A
J Install the equipment. E,G,H
K Train nurses and support E staff. F,I,J

Example 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Immediate
Activity
AON Network Description
I Predecessor(s)
A Select administrative and medical staff. —
B Select site and do site survey. —
C Select equipment. A F A
D Prepare final construction plans and layout. B
E Bring utilities to the site. B
F Interview
Start applicantsCand fillG
positions in nursing,
support staff, maintenance, and security. A
G Purchase and take delivery of equipment. C
H Construct the B hospital.
D H D
I Develop and information system. A
J Install the equipment. E,G,H
K Train nurses and support E staff. F,I,J

Example 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Immediate
Activity
AON Network Description
I Predecessor(s)
A Select administrative and medical staff. —
B Select site and do site survey. —
C Select equipment. A F A
D Prepare final construction plans and layout. B
E Bring utilities to the site. B
F Interview
Start applicantsCand fillG
positions in nursing,
support staff, maintenance, and security. A
G Purchase and take delivery of equipment. C
H Construct the B hospital.
D H J D
I Develop and information system. A
J Install the equipment. E,G,H
K Train nurses and support E staff. F,I,J

Example 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Immediate
Activity
AON Network Description
I Predecessor(s)
A Select administrative and medical staff. —
B Select site and do site survey. —
C Select equipment. A F K A
D Prepare final construction plans and layout. B
E Bring utilities to the site. B
F Interview
Start applicantsCand fillG
positions in nursing,
support staff, maintenance, and security. A
G Purchase and take delivery of equipment. C
H Construct the B hospital.
D H J D
I Develop and information system. A
J Install the equipment. E,G,H
K Train nurses and support E staff. F,I,J

Example 18.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Immediate
Activity
Completion Time Description I Predecessor(s)
15
A Select administrative and medical staff. —
B Select site and do site survey. —
A F K
C Select equipment. 12 10 6 A
D Prepare final construction plans and layout. B
E Bring utilities to the site. B
C G
F Interview
Start applicants and fill positions in Finish
10 35
nursing,
support staff, maintenance, and security. A
G Purchase and take delivery of equipment. C
B D H J
H Construct the 9
hospital.
10 40 4
D
I Develop and information system. A
J Install the equipment. E,G,H
K Train nurses and support E staff. F,I,J
24
Figure 18.4

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Immediate
Activity
Completion Time Description I Predecessor(s)
15
A Select administrative and medical staff. —
B Select site and do site survey. —
A F K
C Select equipment. 12 10 6 A
D Prepare final construction plans and layout. B
E Bring utilities to the site. B
C G
F Interview
Start applicants and fill positions in Finish
10 35
nursing,
support staff, maintenance, and security. A
G Purchase and take delivery of equipment. C
B D H J
H Construct the 9
hospital.
10 40 4
D
I Develop and information system. A
J Install the equipment. E,G,H
K Train nurses and support E staff. F,I,J
24

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Expected
Path Time Immediate
Activity
A-F-K
Completion Time Description
28 I Predecessor(s)
15
A-I-K 33
A Select administrative and medical staff. —
B A-C-G-J-K
Select site and do 67 site survey. —
A F K
C B-D-H-J-K
Select equipment.
12
69 10 6 A
D B-E-J-K 43
Prepare final construction plans and layout. B
E Bring utilities to the site. B
C G
F Interview
Start applicants and fill positions in Finish
10 35
nursing,
support staff, maintenance, and security. A
G Purchase and take delivery of equipment. C
B D H J
H Construct the 9
hospital.
10 40 4
D
I Develop and information system. A
J Install the equipment. E,G,H
K Train nurses and support E staff. F,I,J
24

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
I

15 Earliest finish time


Earliest start time

0
A 12 F K

12 10 6

C G
Start Finish
10 35

B D H J

9 10 40 4
Earliest Start
and
E
Earliest Finish Times
24 Example 18.2

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
I

15

0
A 12 F K

12 10 6

C G
Start Finish
10 35

0
B 9 D H J

9 10 40 4
Earliest Start
and
E
Earliest Finish Times
24 Example 18.2

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
I

15

0
A 12 F K

12 10 6

C G
Start Finish
10 35

0
B 9 9
D 19 H J

9 10 40 4
Earliest Start
and
9 E 33
Earliest Finish Times
24 Example 18.2

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12
I 27

15

0
A 12 12
F 22 K

12 10 6

12
C 22 G
Start Finish
10 35

0
B 9 9
D 19 H J

9 10 40 4
Earliest Start
and
9 E 33
Earliest Finish Times
24 Example 18.2

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12
I 27

15

0
A 12 12
F 22 K

12 10 6

12
C 22 G
Start Finish
10 35

0
B 9 9
D 19 19
H 59 J

9 10 40 4
Earliest Start
and
9 E 33
Earliest Finish Times
24 Example 18.2

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12
I 27

15

0
A 12 12
F 22 K

12 10 6

12
C 22 22
G 57
Start Finish
10 35

0
B 9 9
D 19 19
H 59 J

9 10 40 4
Earliest Start
and
9 E 33
Earliest Finish Times
24 Example 18.2

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12
I 27

15

0
A 12 12
F 22 K

12 10 6

12
C 22 22
G 57
Start Finish
10 35

0
B 9 9
D 19 19
H 59 59
J 63

9 10 40 4
Earliest Start
and
9 E 33
Earliest Finish Times
24 Example 18.2

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12
I 27
Earliest start time Earliest finish time
15

0
A 12 12
F 22 63 K 69
12 10 6

12
C 22 22
G 57
Start Finish
Critical 10 35
path

0
B 9 9
D 19 19
H 59 59
J 63

9 10 40 4
Earliest Start
and
9 E 33
Earliest Finish Times
24 Figure 18.6

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12
I 27

15

0
A 12 12
F 22 Latest 63 K 69
12 10 start 63 69
6 Latest
time finish
time
12
C 22 22
G 57
Start Finish
10 35

0
B 9 9
D 19 19
H 59 59
J 63

9 10 40 4
Latest Start
and
9 E 33
Latest Finish Times
24 Example 18.3

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63

0
A 12 12
F
22 63 K 69
53 10 63 63 69
12 6

12
C 22 22
G 57
Start Finish
10 35

0
B 9 9
D 19 19
H 59 59 63
J

40 59 4 63
9 10
Latest Start
and
9 E 33
Latest Finish Times
24 Example 18.3

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63

0
A 12 12
F
22 63 K 69
53 10 63 63 69
12 6

12
C 22 22
G
57
Start Finish
10 24 35 59

0
B 9 9
D 19 19
H
59 59 63
J
19 40 59 59 4 63
9 10
Latest Start
and
9 E 33
Latest Finish Times 35 24 59
Example 18.3

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63

0
A 12 12
F
22 63 K 69
53 10 63 63 69
12 6

12
C
22 22
G
57
Start Finish
14 10 24 24 35 59

0
B 9 9
D
19 19
H
59 59 63
J
9 10 19 19 40 59 59 4 63
9
Latest Start
and
9 E 33
Latest Finish Times 35 24 59
Example 18.3

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
Earliest start time Earliest finish time
48 15 63
Latest start time Latest finish time

0
A
12 12
F
22 63 K 69
2 12 14 53 10 63 63 69
6

12 22
C 22
G
57
Start Finish
Critical 14 10 24 24 35 59
path

0
B 9 9
D
19 19
H
59 59 63
J
0 9 10 19 19 40 59 59 4 63
9 9
Latest Start
and
9 E 33
Latest Finish Times 35 24 59
Figure 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63

0
A
12 12
F
22 63 K 69
2 12 14 53 10 63 63 69
6

12
C
22 22
G
57
Start Finish
14 10 24 24 35 59

0
B 9 9
D
19 19
H
59 59 63
J
0 9 10 19 19 40 59 59 4 63
9 9

Activity Slack
9 E 33
Analysis 35 24 59
Example 18.4

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Activity Slack
12 27
I
48 15 63
Slack = LS - ES
or 0
A
12 12
F
22 63 K 69
2 12 14 53 10 63 63 69
6
Slack = LF - EF

12
C
22 22
G
57
Start Finish
14 10 24 24 35 59

0
B 9 9
D
19 19
H
59 59 63
J
0 9 10 19 19 40 59 59 4 63
9 9

Activity Slack
9 E 33
Analysis 35 24 59
Example 18.4

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Activity Slack
12 27
I
48 15 63
SlackK = 63 - 63
or 0
A
12 12
F
22 63 K 69
2 12 14 53 10 63 63 69
6
SlackK = 69 - 69

12
C
22 22
G
57
Start Finish
14 10 24 24 35 59

0
B 9 9
D
19 19
H
59 59 63
J
0 9 10 19 19 40 59 59 4 63
9 9

Activity Slack
9 E 33
Analysis 35 24 59
Example 18.4

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Activity Slack
12 27
I
48 15 63
SlackK = 0
or 0
A
12 12
F
22 63 K 69
2 12 14 53 10 63 63 69
6
SlackK = 0

12
C
22 22
G
57
Start Finish
14 10 24 24 35 59

0
B 9 9
D
19 19
H
59 59 63
J
0 9 10 19 19 40 59 59 4 63
9 9

Activity Slack
9 E 33
Analysis 35 24 59
Example 18.4

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Node Duration ES LS Slack
A 12 0 2 2 I
12 27
B 9 0 0 0 48 15 63
C 10 12 14 2
D 10 9 9 0
E 24 9 35 26 F
12 22 63 K 69
F 10 12 53 41
53 10 63 63 69
G 35 22 24 2 6
H 40 19 19 0
I 15 12 48 36 C G
J 4 59 59 0 12 22 22 57
Finish
14 10 24 24 35 59
K 6 63 63 0

0
B 9 9
D
19 19
H
59 59 63
J
0 9 10 19 19 40 59 59 4 63
9 9

9 E 33
Critical Path 35 24 59
Example 18.4

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63

0
A
12 12
F
22 63 K 69
2 12 14 53 10 63 63 69
6

12
C
22 22
G
57
Start Finish
14 10 24 24 35 59

0
B 9 9
D
19 19
H
59 59 63
J
0 9 10 19 19 40 59 59 4 63
9 9

9 E 33
Critical Path 35 24 59
Figure 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Probabilistic Time Estimates

Time
a m b
Mean
Figure 18.8 (a)
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Probabilistic Time Estimates

Area under curve


between a and b
is 99.74%

3s 3s Time
a m b
Mean
Figure 18.8 (b)
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Probabilistic I

Time Estimates
A F K

Start C G Finish

B D H J

Example 18.5
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Probabilistic I

Time Estimates
A F K

Activity B
Most Start C G Finish
Optimistic Likely Pessimistic
(a) (m) (b)
B D H J
7 8 15

Example 18.5
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
PCR HOSPITAL
Probabilistic I

Time Estimates
A F K

Activity B
Most Start C G Finish
Optimistic Likely Pessimistic
(a) (m) (b)
B D H J
7 8 15

7 + 4(8) + 15 E
te = 6
= 9 weeks

Example 18.5
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Probabilistic I

Time Estimates
A F K

Activity B
Most Start C G Finish
Optimistic Likely Pessimistic
(a) (m) (b)
B D H J
7 8 15

7 + 4(8) + 15 E
te = 6
= 9 weeks
2
15 - 7
s2 = ( 6 ) = 1.78 Example 18.5
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Time Estimates (wk) Activity Statistics
Optimistic Likely Pessimistic Expected Variance
Activity (a) (m) (b) Time (te ) (s2 )
A 11 12 13 12 0.11
B 7 8 15 9 1.78
C 5 10 15 10 2.78
D 8 9 16 10 1.78
E 14 25 30 24 7.11
F 6 9 18 10 4.00
G 25 36 41 35 7.11
H 35 40 45 40 2.78
I 10 13 28 15 9.00
J 1 2 15 4 5.44
K 5 6 7 6 0.11
Example 18.5
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Probabilities
Critical Path = B - D - H - J - K
T = 72 days TE = 69 days
T - TE
s2 =  (variances of activities) z=
s2

Example 18.6
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Probabilities
Critical Path = B - D - H - J - K
T = 72 days TE = 69 days
T - TE
s2 =  (variances of activities) z=
s2
s2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89

Example 18.6
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Probabilities
Critical Path = B - D - H - J - K
T = 72 days TE = 69 days
T - TE
s2 =  (variances of activities) z=
s2
s2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89
72 - 69
z=
11.89

Example 18.6
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Probabilities
Critical Path = B - D - H - J - K
T = 72 days TE = 69 days
T - TE
s2 =  (variances of activities) z=
s2
s2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89
72 - 69 From Appendix 2
z= = 0.87 Pz = .8078  .81
11.89

Example 18.6
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Probabilities
Normal distribution:
Critical Path
Length of = B - D - H - J - K= 69 weeks;
Mean
critical path s = 3.45 weeks
T = 72 days TE = 69 days
Probability of T-T
=
Eof
s2 (variances
meeting the of activities) z Probability
=
schedule is s
exceeding 272
weeks is 0.1922
0.8078
s2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89
72 - 69 69 72
z= = 0.87
11.89 Project duration (weeks)
Figure 18.9

Example 18.6
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Probabilities
Path = A - C - G - J - K
T = 72 days TE = 67 days
T - TE
s2 =  (variances of activities) z=
s2
s2 = 0.11 + 2.78 + 7.11 + 5.44 + 0.11 = 15.55
72 - 67 From Appendix 2
z= = 1.27 Pz = .8980  .90
15.55

Example 18.6
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Cost-Time Relationships in Cost Analysis
8000 —
Crash cost (CC)
7000 —
Direct cost (dollars)

Linear cost assumption


6000 — Estimated costs for
5200 a 2-week reduction,
5000 — from 10 weeks to
8 weeks
4000 —

3000 — Normal cost (NC)

0— | | | | | |
5 6 7 8 9 10 11
(Crash time) (Normal time)
Figure 18.10 Time (weeks)
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Path B-D-H-J-K: 69 weeks


Crash Activity J by 3 weeks @ $1,000/week

Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Path B-D-H-J-K: 69 weeks


Crash Activity J by 3 weeks @ $1,000/week
3($28,000) - 3($1,000) = $81,000
Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Path B-D-H-J-K: 66 weeks


Crash Activity J by 3 weeks @ $1,000/week
3($28,000) - 3($1,000) = $81,000
$2,624,000 - $81,000 = $2,543,000
Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000 $2,543,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Path B-D-H-J-K: 66 weeks


Crash Activity J by 3 weeks @ $1,000/week
3($28,000) - 3($1,000) = $81,000
$2,624,000 - $81,000 = $2,543,000
Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63 36
Minimum Cost Schedule
2
A-I-K: 33 weeks
A 12 F B-D-H-J-K:
41 69 weeks 0
0 12 22 63 K 69
A-F-K: 28 weeks B-E-J-K: 43
63
weeks
69
53
A-C-G-J-K:
2 12 14
67 weeks 10 63 6

2 G 2
Total cost = $2,624,000 C $2,543,000
12 22 22 57
IndirectStartcosts = $8,000/week
14 10 24 24 35 59
Finish

Penalty cost = $20,000/week after week 65


B 9 D 19 H 59
0 0 0 J 63
0
Critical Path B-D-H-J-K:
0 69
9 weeks
19 59
0 9 9 9 10 19 19 40 59 59 4 63
Crash Activity J by 3 weeks @ $1,000/week
3($28,000) - 3($1,000)9 =E$81,000
33
$2,624,000 - $81,000 35
= 24 59 26
$2,543,000

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63 36
Minimum Cost Schedule
2
A-I-K: 33 weeks
A 12 F B-D-H-J-K:
41 69 weeks 0
0 12 22 60 K 66
A-F-K: 28 weeks B-E-J-K: 43
60
weeks
66
53
A-C-G-J-K:
2 12 14
67 weeks 10 63 6

2 G 2
Total cost = $2,624,000 C $2,543,000
12 22 22 57
IndirectStartcosts = $8,000/week
14 10 24 24 35 59
Finish

Penalty cost = $20,000/week after week 65


B 9 D 19 H 59
0 0 0 J 60
0
Critical Path B-D-H-J-K:
0 69
9 weeks
19 59
0 9 9 9 10 19 19 40 59 59 1 60
Crash Activity J by 3 weeks @ $1,000/week
3($28,000) - 3($1,000)9 =E$81,000
33
$2,624,000 - $81,000 35
= 24 59 26
$2,543,000

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000 $2,543,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Path B-D-H-J-K: 66 weeks


Crash Activity D by 2 weeks @ $2,000/week

Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000 $2,543,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Path B-D-H-J-K: 66 weeks


Crash Activity D by 2 weeks @ $2,000/week
$28,000 + $8,000 - 2($2,000) = $32,000
$2,543,000 - $32,000 = $2,511,000
Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000 $2,511,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Path B-D-H-J-K: 64 weeks


Crash Activity D by 2 weeks @ $2,000/week
$28,000 + $8,000 - 2($2,000) = $32,000
$2,543,000 - $32,000 = $2,511,000
Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63 36
Minimum Cost Schedule
2
A-I-K: 33 weeks
A 12 F B-D-H-J-K:
41 69 weeks 0
0 12 22 60 K 66
A-F-K: 28 weeks B-E-J-K: 43
60
weeks
66
53
A-C-G-J-K:
2 12 14
67 weeks 10 63 6

2 G 2
Total cost = $2,624,000 C $2,511,000
12 22 22 57
IndirectStartcosts = $8,000/week
14 10 24 24 35 59
Finish

Penalty cost = $20,000/week after week 65


B 9 D 19 H 59
0 0 0 J 60
0
Critical Path B-D-H-J-K:
0 69
9 weeks
19 59
0 9 9 9 10 19 19 40 59 59 1 60
Crash Activity D by 2 weeks @ $2,000/week
$28,000 + $8,000 - 2($2,000)
9 E 33
= $32,000
$2,543,000 - $32,000 35
= 24 59 26
$2,511,000

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63 36
Minimum Cost Schedule
2
A-I-K: 33 weeks
A 12 F B-D-H-J-K:
41 69 weeks 0
0 12 22 58 K 64
A-F-K: 28 weeks B-E-J-K: 43
58
weeks
64
53
A-C-G-J-K:
2 12 14
67 weeks 10 63 6

2 G 2
Total cost = $2,624,000 C $2,511,000
12 22 22 57
IndirectStartcosts = $8,000/week
14 10 24 24 35 59
Finish

Penalty cost = $20,000/week after week 65


B 9 D 17 H 57
0 0 0 J 58
0
Critical Path B-D-H-J-K:
0 69
9 weeks
17 57
0 9 9 9 8 17 17 40 57 57 1 58
Crash Activity D by 2 weeks @ $2,000/week
$28,000 + $8,000 - 2($2,000)
9 E 33
= $32,000
$2,543,000 - $32,000 35
= 24 59 26
$2,511,000

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63 36
Minimum Cost Schedule
0
A-I-K: 33 weeks
A 12 F B-D-H-J-K:
41 69 weeks 0
0 12 22 58 K 64
A-F-K: 28 weeks B-E-J-K: 43
58
weeks
64
53
A-C-G-J-K:
0 12 12
67 weeks 10 63 6

0 G 0
Total cost = $2,624,000 C $2,511,000
12 22 22 57
IndirectStartcosts = $8,000/week
12 10 22 22 35 57
Finish

Penalty cost = $20,000/week after week 65


B 9 D 17 H 57
0 0 0 J 58
0
Critical Path B-D-H-J-K:
0 69
9 weeks
17 57
0 9 9 9 8 17 17 40 57 57 1 58
Crash Activity D by 2 weeks @ $2,000/week
$28,000 + $8,000 - 2($2,000)
9 E 33
= $32,000
$2,543,000 - $32,000 35
= 24 59 26
$2,511,000

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000 $2,511,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Paths B-D-H-J-K and A-C-G-J-K: 64 weeks


Crash Activity K by 1 week @ $4,000/week

Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000 $2,511,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Paths B-D-H-J-K and A-C-G-J-K: 64 weeks


Crash Activity K by 1 week @ $4,000/week
$8,000 - $4,000 = $4,000
$2,511,000 - $4,000 = $2,507,000
Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000 $2,507,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Paths B-D-H-J-K and A-C-G-J-K: 63 weeks


Crash Activity K by 1 week @ $4,000/week
$8,000 - $4,000 = $4,000
$2,511,000 - $4,000 = $2,507,000
Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63 36
Minimum Cost Schedule
0
A-I-K: 33 weeks
A 12 F B-D-H-J-K:
41 69 weeks 0
0 12 22 58 K 64
A-F-K: 28 weeks B-E-J-K: 43
58
weeks
64
53
A-C-G-J-K:
0 12 12
67 weeks 10 63 6

0 G 0
Total cost = $2,624,000 C $2,507,000
12 22 22 57
IndirectStartcosts = $8,000/week
12 10 22 22 35 57
Finish

Penalty cost = $20,000/week after week 65


0
H 57
0 0 0
Critical Paths 0
B 9
B-D-H-J-K D 17
9and A-C-G-J-K:
17 64J weeks
57 58
0 9 9 9 8 17 17 40 57 57 1 58
Crash Activity K by 1 week @ $4,000/week
$8,000 - $4,000 = $4,000
9 E 33
26
$2,511,000 - $4,000 =35$2,507,000
24 59

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63 36
Minimum Cost Schedule
0
A-I-K: 33 weeks
A 12 F B-D-H-J-K:
41 69 weeks 0
0 12 22 58 K 63
A-F-K: 28 weeks B-E-J-K: 43
58
weeks
63
53
A-C-G-J-K:
0 12 12
67 weeks 10 63 5

0 G 0
Total cost = $2,624,000 C $2,507,000
12 22 22 57
IndirectStartcosts = $8,000/week
12 10 22 22 35 57
Finish

Penalty cost = $20,000/week after week 65


0
H 57
0 0 0
Critical Paths 0
B 9
B-D-H-J-K D 17
9and A-C-G-J-K:
17 64J weeks
57 58
0 9 9 9 8 17 17 40 57 57 1 58
Crash Activity K by 1 week @ $4,000/week
$8,000 - $4,000 = $4,000
9 E 33
26
$2,511,000 - $4,000 =35$2,507,000
24 59

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000 $2,507,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Paths B-D-H-J-K and A-C-G-J-K: 63 weeks


Crash Activities B and C by 2 weeks
@ $7,000/week and $600/week

Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000 $2,507,000


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Paths B-D-H-J-K and A-C-G-J-K: 63 weeks


Crash Activities B and C by 2 weeks
@ $7,000/week and $600/week
2($8,000) - 2($7,600) = $800
$2,507,000 - $800 = $2,506,200 Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
Minimum-Cost Schedule
A-I-K: 33 weeks B-D-H-J-K: 69 weeks
A-F-K: 28 weeks B-E-J-K: 43 weeks
A-C-G-J-K: 67 weeks

Total cost = $2,624,000 $2,506,200


Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65

Critical Paths B-D-H-J-K and A-C-G-J-K: 61 weeks


Crash Activities B and C by 2 weeks
@ $7,000/week and $600/week
2($8,000) - 2($7,600) = $800
$2,507,000 - $800 = $2,506,200 Example 18.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63 36
Minimum Cost Schedule
0
A-I-K: 33 weeks
A 12 F B-D-H-J-K:
41 69 weeks 0
0 12 22 58 K 63
A-F-K: 28 weeks B-E-J-K: 43
58
weeks
63
53
A-C-G-J-K:
0 12 12
67 weeks 10 63 5

0 G 0
Total cost = $2,624,000 C $2,507,000
12 22 22 57
IndirectStartcosts = $8,000/week
12 10 22 22 35 57
Finish

Penalty cost = $20,000/week after week 65


0
H 57
0 0 0
Critical Paths 0
B 9
B-D-H-J-K D 17
9and A-C-G-J-K:
17 63J weeks
57 58
0 9 9 9 8 17 17 40 57 57 1 58
Crash Activities B and C by 2 weeks
@ $7,000/week and $600/week
9 E 33
2($8,000) - 2($7,600) = $80026 35 24 59
$2,507,000 - $800 = $2,506,200
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.
12 27
I
48 15 63 36
Minimum Cost Schedule
0
A-I-K: 33 weeks
A 12 F B-D-H-J-K:
41 69 weeks 0
0 12 22 56 K 61
A-F-K: 28 weeks B-E-J-K: 43
56
weeks
61
53
A-C-G-J-K:
0 12 12
67 weeks 10 63 5

0 G 0
Total cost = $2,624,000 C $2,507,000
12 20 20 55
IndirectStartcosts = $8,000/week
12 8 20 20 35 55
Finish

Penalty cost = $20,000/week after week 65


0
H 55
0 0 0
Critical Paths 0
B 7
B-D-H-J-K D 15
7and A-C-G-J-K:
15 63J weeks
55 56
0 7 7 7 8 15 15 40 55 55 1 56
Crash Activities B and C by 2 weeks
@ $8,000/week and $7,600/week
9 E 33
2($8,000) - 2($7,600) = $80026 35 24 59
$2,507,000 - $800 = $2,506,200
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Fifth Edition © 1999 Addison Wesley Longman. All rights reserved.

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