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Crashing Projects and Activities

Bob Summers, CEO of Summer Construction has an opportunity to bid on a contract that pays
$5500 upon completion, but the contract calls for a late performance penalty of $140 per week
for each week that the project is delayed beyond eight weeks.

Activity Normal Time Normal Cost Crash Time Crash Cost Immediate Predecessors
A 1 $300 1 $300 -
B 3 $400 1 $470 A
C 2 $350 1 $550 A
D 5 $550 4 $675 A
E 4 $300 3 $375 C
F 2 $450 1 $500 C
G 7 $425 5 $525 C
H 4 $525 2 $625 B,E
I 3 $250 1 $330 D,F
J 1 $300 1 $300 H,G,I

A. Find the crash cost per week for each activity and record the results in the crash table in the
table. What are the total normal costs for the project?

B. Which activity would you recommend that Hank crash first, if any?

C. What project duration will minimize project cost?

D. What is the maximum profit that Summers can attain for this project?

Solution Preview

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Bob Summers, CEO of Summer Construction has an opportunity to bid on a contract that pays
$5500 upon completion, but the contract calls for a late performance penalty of $140 per week
for each week that the project is delayed beyond eight weeks.

Activity Normal Time Normal Cost Crash Time Crash Cost Immediate Predecessors
A 1 $300 1 $300 -
B 3 $400 1 $470 A
C 2 $350 1 $550 A
D 5 $550 4 $675 A
E 4 $300 3 $375 C
F 2 $450 1 $500 C
G 7 ...

Solution Summary

The solution examines a crashing projects and activities for a Summer Construction company. The maximum profit the company can obtain is determined.

$2.19