The objective of the time-cost trade-off analysis is to reduce the original project duration, determined form the critical path analysis, to meet a specific deadline, with the least cost. In addition to that it might be necessary to finish the project in a specific time to: Finish the project in a predefined deadline date. Recover early delays.
What is time cost trade-off analysis?
Thus, planners perform what is called time cost trade-off analysis to shorten the project duration. This can be done by selecting some activities on the critical path to shorten their duration.
What is time-cost trade-off in construction?
Time-cost trade-off decisions are complex and require selection of appropriate construction method for each project task. Time-cost trade-off, in fact, is an important management tool fo overcoming one of the critical path method limitations of being unable to bring the project schedule to a specified duration. 7.2 Time-Cost Trade-Off
Why is the cost/time tradeoff graph always piecewise linear?
In general it is always true that the cost/time tradeoff graph contains a number of distinct straight line segments (i.e. mathematically we would say that it is piecewise linear). This arises because of the linear relationship that was assumed to hold between cost and completion time for each activity.
What is the use of PERT/COST?
PERT/Cost is a way of showing the budgeted project cost based on the activity start times. The assumption behind PERT/Cost is that cost per unit of time for an activity is constant between its start time and its finish time. For example, let us return to the original network we had before with the original crashing data as illustrated below.
What is time cost tradeoff?
Time-cost tradeoff analysis involves accelerated activity durations that are obtained by allocating more resources, and lead to shorter project duration and lower indirect cost at the expense of higher direct cost [1,2].
What is time cost trade-off in CPM?
The CPM method of time-cost trade-off approach is to determine just which time-cost combination should be used for each activity to meet the scheduled project competition at a minimum cost.
Why is time cost trade-off necessary?
According to several researchers, time–cost trade-off problem (TCTP) is considered as one of the vital decisions in project accomplishment [2]. Usually, there is a trade-off between the duration and the direct cost to do an activity; the cheaper the resources, the larger the time needed to complete an activity.
Which activity can be crashed while we are doing time cost trade-off?
It turns out that activity 1 can be crashed by the total amount of 5 weeks without another path's becoming critical because activity 1 is included in all four paths in the network. Crashing this activity results in a revised project duration of 31 weeks, at a crash cost of $2,000.
What does time cost mean?
In project-based pricing, the scope of work and the fee are fixed; the only variable is the time it takes to complete the project. This is your time cost. In project-based pricing, every additional hour of work on a project incurs a higher time cost and lower per-hour revenue.
What are the objectives of CPM?
The critical path method (CPM) is a step-by-step project management technique for process planning that defines critical and non-critical tasks with the goal of preventing time-frame problems and process bottlenecks.
What are the assumptions of time cost trade-off?
Time-Cost Model Assumptions The time-cost model described above relies on the following assumptions: The normal cost for an activity is lower than the crash cost. There is a linear relationship between activity time and cost. The resources are available to shorten the activity.
What is the relationship between time and cost?
In the construction projects, time and cost have a very close relationship. That relationship can be illustrated in a linear fashion, which means for the same type of project, the greater the volume of work the greater the cost and time are required in order to complete the whole project.
What is Pcts in project management?
James P. Lewis suggests that project scope represents the area of the triangle, and can be chosen as a variable to achieve project success. He calls this relationship PCTS (Performance, Cost, Time, Scope), and suggests that a project can pick any three.
What is crashing in network analysis?
Crashing an activity (Crashing the network) Reducing the time required to complete an activity (in hopes that this will reduce the completion time of the entire project) by assigning additional resources to that activity but reducing the duration time of the activities on the critical path may change the critical path.
What are the 5 common reasons for crashing a project?
What Are Five Common Reasons for Crashing a Project?Project Schedule Delay. If the project is falling behind schedule, you don't have many courses of action to ensure its completion within time limits. ... Resource Availability. ... Avoiding Future Delays. ... Time Bonuses. ... Extra Manpower.
What is the minimum time to complete a project?
The minimum time to complete a project is called the project-crash time. This minimum completion time can be found by applying critical path scheduling with all activity durations set to their minimum values. This minimum completion time for the project can then be used to determine the project-crash cost. Since there are some activities not on the critical path that can be assigned longer duration without delaying the project, it is advantageous to change the all-crash schedule and thereby reduce costs.
What is total project cost?
Indirect costs, on the other hand, are the necessary costs of doing work which can not be related to a particular activity, and in some cases can not be related to a specific project.
What is the objective of time cost trade-off analysis?
The objective of the time-cost trade-off analysis is to reduce the original project duration, determined form the critical path analysis, to meet a specific deadline, with the least cost. In addition to that it might be necessary to finish the project in a specific time to:
What is the most commonly used software to deal with all the data needed to develop schedule information?
Of the many Project Management software, Microsoft Project is the most commonly used software to deal with all the data needed to develop schedule information. The various activities are linked by the software in terms of their predecessors and successors. Once completed, the total time required to complete the project is displayed thus answering Question 1 in the preceding section.
What is essential network analysis?
In this extension to the essential method we assume that, for every activity, the completion time are often reduce (within limits) by spending extra money on the activity.
Compressing The Project Schedule
- Compressing or crashingthe project schedule refers to the acceleration of the project activities in order to complete the project sooner. The time required to complete a project is determined by the critical path, so to compress a project schedule one must focus on critical path activities. A …
Time-Cost Model Assumptions
- The time-cost model described above relies on the following assumptions: 1. The normal cost for an activity is lower than the crash cost. 2. There is a linear relationship between activity time and cost. 3. The resources are available to shorten the activity. The model would need to be adapted to cases in which the assumptions do not hold. For example, the schedule might need to take int…
Additional Considerations
- There are other considerations besides project cost. For example, when the project is part of the development of a new product, time-to-market may be extremely important and it may be beneficial to accelerate the project to a point where its cost is much greater than the minimum cost. In contract work, there may be incentive payments associated with early completion or pen…