The project shown below has crash costs as shown in the table. What is the minimum completion cost for this project that has a fixed cost of $1,000 per day?
Activity Normal Duration (days) Crash Duration (days) Crash Cost ($/day)
A 3 3
B 8 5 $800
C 6 4 $1200
D 9 4 $600
E 6 5 $400
F 6 4 $1100
G 2 1 $900
What will be an ideal response?
Answer: Initially, the path lengths are: ABCG = 19; ADG = 14; and AEFG = 17, so the project costs $19,000.
Reducing B by 2 days costs $1600, saves $400, and yields two critical paths of ABCG =
AEFG = 17.
Reducing G by 1 day costs $900, saves $100, and yields two critical paths of ABCG =
AEFG = 16.
Further reductions are possible, but these are not economical, so the minimum cost project completion time is 16 days and the total cost is 16($1000) + $1600 + $900 = $18,500.
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