Chapter 9 Homework

Topics: Costs, Critical path method, Project management Pages: 7 (1362 words) Published: July 14, 2012
Chapter 9

reducing project duration

Review Questions

1.What are five common reasons for crashing a project?

Reasons given could include:

• Imposed deadline in which disfavor will be earned by not meeting superior’s deadline • Time to market competitive advantage
• Realize benefits from incentive contracts
• To make up for lost time and avoid contract penalties • Save extensive overhead costs
• Free up resources to work on other projects
• Exceed customer expectations.

2.What are the advantages and disadvantages of reducing project scope to accelerate a project? What can be done to reduce the disadvantages?

Reducing the scope of the project can lead to big savings both in time and costs. It typically means the elimination of certain tasks. At the same time scaling down the scope may reduce the value of the project such that it is no longer worthwhile or fails to meet critical success parameters. The key is reassessing the project requirements to determine which are essential and which are optional. This requires the active involvement of all key stakeholders. More intense re-examination of requirements may actually improve the value of the project by getting it done more quickly and for a lower cost.

3.Why is scheduling overtime a popular choice for getting projects back on schedule? What are the potential problems for relying on this option?

Scheduling overtime is popular because if it involves salary workers and no direct costs are added to the project. Even if it involves additional costs, you avoid Brook’s law and minimize additional coordination and training costs. The disadvantages are the additional time and half costs associated with hourly overtime and stress and fatigue that come with working long hours which can lead to accidents, inferior performance, and turnover.

4.Identify four indirect costs you might find on a moderately complex project. Why are these costs classified as indirect?

Indirect (overhead) costs are costs that cannot be attributed to a specific activity or work package. Examples of indirect costs are supervision, consultants, debt interest charges, machinery common to several activities, accounting and information processing, public relations, penalties or incentives for early or late completion. In practice it is amazing how many project compression decisions are made without serious consideration of indirect costs.

5.How can a cost-duration graph be used by the project manager? Explain.

A cost-duration graph is useful to the project manager for comparing alternatives. Any alternative that moves the project duration away from the optimum cost-duration point will increase costs. Additionally, incentives and penalties can be evaluated against the total, low cost point.

6.Reducing the project duration increases the risk of being late. Explain.

Compressing the project duration means slack (float) on noncritical activities will be reduced. When slack of noncritical activities is reduced, the chance of new critical paths occurring increases; hence, the risk of the project becoming late increases. In addition, compressing will have the following other impacts on managing the project:

• Reduces flexibility by using slack
• Can increase number of critical activities
• Can increase interdependencies of paths
• Makes resource scheduling tighter (critical)
• May increase costs.

7.It is possible to shorten the critical path and save money. Explain how.

The only way to shorten the critical path and save money is to have indirect costs which are greater than the additional direct costs of shortening the critical path one unit of time. The difference is a savings.


Note: Use the procedure presented in the chapter example to compute exercises; that is, compress one time unit per move using the least-cost method.

1.Draw a project network...
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