Crashing Project Time with Least Cost: A Linear Programming Approach
16 Pages Posted: 29 Oct 2007
Date Written: 2004
Business and its environment are more complex today than ever before. And decision making has become much more complicated than in the past due to increased decision alternatives, uncertainty, and cost of making errors. As a result, it is very difficult to rely on a trial and error approach in decision making. So managers must become more rational in decision making by using more effective tools and techniques. Nowadays business managers are dealing with different types of projects ranging from implementing a large scale manufacturing plant to a simple sales campaign. While dealing with projects, to become competitive, sometimes it is required to complete a project within the predetermined deadline to keep cost at lowest possible level. Failure to do so ultimately leads to increase in total cost. This would direct managers to encounter a decision situation: which activities of the project will be crashed to minimize the total cost of crashing project. This paper mainly provides a framework for reducing total project time at the least total cost by crashing the project network using Linear Programming (LP). Then the model is solved with hypothetical data of a hypothetical project by using Solver in Microsoft Excel.
Keywords: Crashing project time, PERT/CPM, LP
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