UT Knoxville BUAD 341 - Cost-Time Trade-offs and Project Crashing (7 pages)

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Cost-Time Trade-offs and Project Crashing



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Cost-Time Trade-offs and Project Crashing

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The rest of the notes for project scheduling and the introduction to cost-time trade-offs and project crashing.


Lecture number:
21
Pages:
7
Type:
Lecture Note
School:
University of Tennessee
Course:
Buad 341 - CBM II: Lean Operations
Edition:
1

Unformatted text preview:

BA341 21st Edition Lecture 21 Outline of Last Lecture I Precedence Table II Gantt Chart III Project Network Diagram IV Sensitivity Analysis V PERT Outline of Current Lecture VI Continuing the problem using PERT VII Cost Time Trade offs and Project Crashing VIII Time Cost Trade offs IX Reducing Project Duration X Some Time Cost Models XI Critical Path Models XII Crashing Current Lecture Using the Last Lecture we are now able to answer additional questions The probability of finishing the project in 26 days o First compute where o D the desired project completion time o TE expected completion time i e the length of the critical path sum of ETs for critical activities o CP2 variance of the critical path sum of variances of critical activities D 26 These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute TE 24 and CP2 0 2 78 1 3 78 Then Z 26 24 sqrt 3 78 1 0287 1 03 Now look at the Standard Normal Cumulative Probability Table o Z 1 03 corresponds to 84 9 using a normal distribution table Now Find the project duration corresponding to 95 confidence o Start from same equation but now solve for D o According to a normal distribution table a Z of 1 65 corresponds to 95 probability o Thus D 24 1 65 sqrt 3 78 27 21 days o Cost Time Trade offs and Project Crashing Introduction Recall the project objectives o Performance scope o Cost o Time Project manager often forced to make trade offs between project objectives e g o A delayed project must be expedited in order to be completed by deadline o Resource constraints lead to changes in project scope and total duration Time Cost Trade offs We will focus next on time cost models where the goal is to find either o the most cost effective approach to reducing the duration of a project or o the project duration corresponding to minimum cost Is there a link between activity duration and activity cost o Direct costs e g overtime costs hiring



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