Construction Planning & Scheduling [5 Hours]

2.1 Construction Planning 208020722071

“If you fail to plan, you are bound to fail.”

Planning is the most important constituent of construction management. In the simplest sense, planning is the mental process of deciding about the future line of actions. Planning is the contemplated action to achieve the desired results taking into consideration present needs and future requirements. Planning is critical to the project management process. It forms the basis for the project scope, schedule, resources, quality, risk, and integration.

Necessity of Construction Planning

Planning is done to:

• Eliminate or reduce uncertainty
• Improve efficiency of the operations
• Obtain a better understanding of the objectives
• Provide a basis for monitoring and controlling
• To arrange the constant flow of funds in the entire project duration
• To provide the required level of safety and compensations
• Proper arrangements of communication and mobility in site

Construction Planning in Context of Nepalese Construction 2072

In the context of Nepal, construction planning by a contractor is especially critical due to the unique challenges faced in Nepalese construction projects:

1. Geographical Challenges: Nepal’s diverse terrain (Terai plains to Himalayan mountains) requires site-specific planning. Road construction in hilly areas, hydropower in remote locations, and bridge construction over deep gorges demand detailed method statements, specialized equipment planning, and logistical arrangements for material transport.
2. Seasonal Constraints: The monsoon season (June–September) severely restricts construction activities, especially earthwork, road construction, and concreting. Contractors must plan to maximize work during dry seasons and prepare for monsoon-related disruptions. Winter conditions in high-altitude projects also limit working days.
3. Material Procurement: Availability of quality construction materials varies by location. In remote areas, cement, steel, and aggregates must be transported long distances. Planning for material procurement, storage, and inventory management is crucial. Contractors must also plan for price fluctuations due to supply chain disruptions.
4. Labor Availability: Due to massive labor migration to Gulf countries and Malaysia, skilled and unskilled labor shortage is a major issue. Contractors must plan for workforce recruitment, training of local labor, and labor camp facilities, especially in remote project sites.
5. Financial Planning: Government projects in Nepal often face delayed payment releases tied to the fiscal year cycle (Shrawan–Ashad). Contractors must plan cash flow management, interim financing, and material credit arrangements to maintain continuity despite payment delays.
6. Regulatory and Permit Planning: Environmental clearances (EIA/IEE), forest clearances, land acquisition, local body approvals, and community consent (especially in infrastructure projects) must be planned well in advance as these are major sources of project delays in Nepal.
7. Multi-stakeholder Coordination: Nepalese construction involves coordination with government agencies (DoR, DoLIDAR, NEA), donors (ADB, World Bank, JICA), consultants, and local communities. Proper communication planning is essential.
8. Safety and Quality Planning: Despite relatively weak enforcement, contractors must plan for occupational health and safety (OHS), quality assurance/quality control (QA/QC), and environmental management to meet international donor requirements and emerging domestic regulations.

Principles of Planning

Following are the general principles of planning:

• The plan should be readily understandable
• The plan should be realistic (not an optimistic)
• The plan should be flexible
• The plan should be comprehensive
• The plan should incorporate the system of monitoring and controlling

Broadly, planning involves the following steps:

• Setting objectives
• Determining the means to achieve the objectives
• Evaluating alternatives
• Selecting the best alternative

2.2 Steps and Stages of Planning 20722070

Steps Involved in Planning 2072 2070

Following steps are involved in effective planning:

• Identifying the likely problems to be encountered in the execution of the work and obtaining necessary information.
• Fixing the time of start for the execution of work.
• Deciding the time of delivering the materials at the site.
• Deciding the quantities and duration of various types of machines and equipment.
• Deciding the number of different types of labors for various works and the duration of their employment.
• Estimation of financial need.
• Estimation of the duration of the work.
• Evaluation of the effectiveness of the plan adopted.

Stages of Planning 2072

Planning proceeds through a series of stages:

1. Pre-feasibility Stage

At this stage, objectives are clearly spelled out. A framework of the project is formulated. A cost-benefit analysis is carried out along with cost analysis of alternative sites. Thus this stage of planning is before a decision is finally taken to undertake a project.

2. Detailed Planning

During this stage, detailed design and specifications of materials and drawings are also prepared. Quantities calculation, along with the preparation of WBS (Work Breakdown Structure) is done. Sequence and scheduling of the activities are done in this stage.

3. Monitoring and Controlling

In this phase, the progress of construction is monitored as per the proposed schedule. Updating of schedule can be carried out according to the actual progress of work. Preparation of the revised schedule and forecasts regarding the availability of various resources is done.

2.3 Planning by Contractor and Client in Different Stages 2081208020792077207420712070

Planning by the Client / Owner / Employer 2081 2079 2077 2074

a. Pre-Construction Stage Planning

• Assessment of demand, need identification
• The setting of Project Objectives
• Carry out feasibility studies and project appraisal
• Carry out detailed design/drawings, cost estimates
• Preparation of specifications and bidding documents
• Approval from the concerned authority
• Selection of contractor

b. Construction Stage / Implementation Stage Planning 2077

During the implementation (construction) stage, the client carries out the following planning activities:

• Supervision and Monitoring: The client (through the consultant/engineer) plans regular site inspections, progress review meetings, and milestone tracking to ensure the contractor is performing as per the approved work program and specifications.
• Quality Assurance and Quality Control (QA/QC): Planning for material testing (lab and field tests), inspection of workmanship, compliance with specifications, and maintaining quality records. The client ensures independent quality audits are conducted at critical stages.
• Payment Management: Planning the schedule of interim payments (running bills/IPC), verification of measured quantities, certification of payments by the engineer, advance payment recovery, retention money management, and ensuring timely fund release to avoid contractor cash flow problems.
• Variation and Change Order Management: Planning for handling scope changes, design modifications, and additional works. This includes evaluation of variation requests, cost and time impact assessment, and approval procedures.
• Contract Administration: Managing contractual obligations including notices, claims, extensions of time, liquidated damages, insurance, and dispute resolution. Maintaining proper documentation and records.
• Risk Management: Identifying and mitigating risks during construction such as unforeseen ground conditions, weather delays, price escalation, labor disputes, and force majeure events.
• Stakeholder Communication: Regular progress reporting to funding agencies, government authorities, and other stakeholders. Conducting progress review meetings and site visits.
• Safety Management: Ensuring the contractor complies with safety requirements, reviewing safety plans, and monitoring accident/incident reporting.

c. Post-Construction Stage Planning

• Prepares project operation schedule
• Prepares project maintenance schedule
• Project ownership

Planning by the Contractor 2080 2079 2071 2070

a. Pre-Construction Stage Planning (Tender Stage) 2080207920712070

Time Frame: The pre-tender stage for the contractor typically spans 2 to 4 weeks (15 to 30 days), depending on the complexity and size of the project. For large infrastructure projects, it may extend to 45–60 days. This is the period from the date of tender notice publication to the bid submission deadline, during which the contractor must study documents, visit the site, prepare estimates, and finalize the bid.

The planning undertaken by the contractor after receipt of tender notice and before submitting the bid is known as pre-construction or tender stage planning. Steps of planning at this stage are as follows:

• Careful study of tender documents to find out the scope of work and employer’s requirement.
• Study of drawings and Bill of Quantities (BOQ) to find out the quantities of each item of work.
• Study of specifications to find out the quality of materials and work required.
• Site visit and investigation to determine the availability of construction materials at site or nearby site (if required).
• Determine the method of work execution i.e. by labor or equipment.

b. Construction Stage Planning (Contract Planning)

After the acceptance of the tender, the contractor further needs in-depth planning. This stage of planning is also known as contract planning. Here are the following steps in this stage of planning:

• Site mobilization
• Working out detailed quantities of materials required and fixing the methods of procurement and sources of them.
• Working out detailed about construction workforce like skilled and unskilled manpower.
• Working out details of plants, equipment their layout and repair & maintenance strategy.
• Planning for camp facilities, access, accommodations, site offices and layout.
• Planning for surveillance like proper lighting, ventilation, drinking water.
• Study and fixing the rate of different items of works and fixing the sequence of work and deciding the work program.

c. Post-Construction Stage Planning

• Demobilization of plants and equipment.
• Clearance of materials inventory and its stock.
• Handover the project to the client in targeted date.
• Responsible for the defect liability period.

2.4 Preparing Schedule 20702069

2.4.1 Scheduling

Scheduling is the process of arranging various activities and allotting time to each of them so that the project may be completed in an efficient manner and in the specified time.

A construction schedule is a graphic representation which shows the phasing rate of construction with the starting and completion date of each activity and the sequential relationship among various operations in a construction project.

Project scheduling is concerned with the techniques that can be employed to manage the activities that need to be undertaken during the development of a project.

Scheduling is carried out in advance of the project commencing and involves:

• Identifying the tasks that need to be carried out (from BOQ)
• Estimating how long they will take
• Allocating resources (mainly personnel)
• Determining when the tasks will occur

Once underway, control needs to be exerted to ensure schedules represent the best prediction of what will happen during the project development.

2.4.2 Use of Scheduling

Following are the uses of scheduling:

• The quantity of work involved, labor, material, equipment and money required at each stage of work can be determined.
• The actual progress of the work can be monitored and controlled from time to time.

2.4.3 Advantages of Scheduling

Following are the advantages of scheduling:

• By studying the schedule of work, alternative methods of execution can be examined and the most economical method can be selected. Further, the effect of likely constraints can be evaluated at the planning stage.
• It gives a clear picture of quantity and type of materials, manpower, machines at different stages of construction.
• As the time of starting of an activity is known, the arrangements of adequate resources can be done in advance and resource utilization can be optimized.
• The actual progress of each activity can be evaluated with reference to the planned program.
• The interrelationship between the activities is known hence their priorities can be set up.
• Application of value engineering can be adopted.

2.4.4 Classification of Scheduling

Construction planning and scheduling require the supply of materials, engagement of labors, completing the activities or operations and the time when the equipment or machinery is to be employed. These are known as ‘material’, ‘labor’, ‘construction’, ‘equipment’ and ‘financial’ schedules.

Construction Schedule and Its Preparation

Before preparing the construction schedule, the following information must be known:

• Various operations to be done in a particular project
• Quantum of works to be done in each operation
• Unit of measurement
• Output rates of work with a due allowance of weather
• Types and sizes of plants and equipment required
• Date of starting and completing the project

Procedure for preparing the construction schedule is as follows:

1. The work or project is divided into the number of operations and their interdependence or relationship is studied. After a careful study of their interdependence, the sequence of operation is decided.
2. The quantity of work involved in each operation is determined.
3. The time required for the completion of each operation as well as the completion of the total project is determined.

Material Schedule

This schedule is prepared well in advance of the start of the work. The material schedule may be prepared from the construction schedule. For timely execution of work, all construction materials should be arranged in advance. While preparing material schedule, the total quantity, time of requirement and sources must be considered.

Labor Schedule

The aim of this schedule is to determine the number of skilled and unskilled labor required for the execution of different operations on different dates. With the help of this schedule, required labor can be arranged well in time. It is difficult and costly to arrange labor when required. It helps in reducing the labor cost. A labor schedule can be prepared from the construction schedule.

Equipment Schedule

To decide the type, number and dates on which particular equipment will be needed, equipment use schedule has to be prepared before the start of the project, so it is arranged well in advance and brought at the site as and when needed. The aim of this schedule is to derive the maximum usage of the equipment when at the site and remove it from the site when no longer required. This will save money.

Financial Schedule

The estimated amount of money which owner or contractor will provide to finance the project can be obtained from the financial schedule.

Control Schedule

At the end of a fixed date, the project in charge has to send a progress report to the central agency. In order to complete the project within the specified time limits, the chief executive plans to provide resources such as equipment, machines, and money.

2.4.5 Benefits of Planning

Following are some benefits of planning:

• It streamlines the project management process.
• It shows the committed future course of action.
• It provides the yardstick for measuring progress and evaluating resources.
• It identifies and smoothens communication and enables coordination.
• It makes the team time and cost-conscious and it motivates.
• It enables forecasting of input resources, expenditure, and income. These resources forecast cover manpower, materials, machinery, sales-income, and cash flow.

2.4.6 Benefits of Controlling

The control system aids the management at various levels to perform their functions efficiently and effectively for achieving overall project objectives.

2.5 Methods of Scheduling (Work Schedule Control)

The main methods of scheduling are:

Bar Charts

• Gantt Chart
• Linked Bar Chart
• Milestone Chart

Network Diagrams

• CPM (Critical Path Method)
• PERT (Program Evaluation & Review Technique)

Line of Balance

2.5.1 Milestone Charts

Milestones mark significant events in the life of a project, usually critical activities which must be achieved on time to avoid delay in the project.

Milestones should be significant and be reasonable in terms of deadlines (avoid using intermediate stages).

Examples include:

• Installation of equipment
• Completion of phases
• File conversion
• Cutover to the new system

2.5.1a Why Prefer Bar Chart as a Planning Tool? 20702069

For building construction, the Bar Chart (Gantt Chart) is generally the most preferred planning tool for the following reasons:

• Simplicity: Bar charts are easy to prepare, read, and understand by all levels of project personnel — from site supervisors and foremen to project managers and clients. No special training is required.
• Visual Clarity: They provide a clear visual representation of the project schedule showing start date, end date, and duration of each activity at a glance. Progress can be easily tracked by shading completed portions.
• Practical for Building Projects: Building construction typically involves well-known, repetitive activities (excavation, foundation, columns, beams, slabs, masonry, plastering, etc.) with predictable durations. Bar charts handle this straightforward sequencing well.
• Communication Tool: Bar charts serve as excellent communication tools for progress meetings, client presentations, and site coordination. They are widely accepted by government agencies in Nepal for project reporting.
• Cost-effective: No specialized software is needed. Can be prepared manually or using simple tools like Excel.

However, for complex building projects, CPM is preferred because:

• It shows interdependencies between activities (which bar chart does not)
• It identifies the critical path and float, enabling better resource allocation
• It allows time-cost trade-off analysis for project optimization
• It provides a mathematical basis for schedule compression and what-if analysis

PERT is least preferred for building construction because building activities have well-known durations (deterministic), making PERT’s three-time-estimate (probabilistic) approach unnecessary. PERT is better suited for R&D and first-time projects where duration uncertainty is high.

Conclusion: For typical building construction in Nepal, Bar Chart is preferred for its simplicity and practicality. For large/complex projects (hydropower, highways), CPM is essential. A combination of Bar Chart (for presentation) and CPM (for analysis) is the ideal approach.

2.5.2 Gantt Charts

A Gantt chart is a horizontal bar or line chart which commonly includes the following features:

• Activities identified on the left-hand side
• Time scale is drawn on the top (or bottom) of the chart
• A horizontal bar or a line is drawn against each activity indicating estimated duration
• Dependencies between activities are shown
• As work is done, bars are shaded to represent the actual time spent (an alternative is to use separate lines)
• A vertical ruler (such as a transparent ruler) placed at the review point makes it possible to establish activities which are behind or ahead of schedule

2.5.3 Network Diagrams

Critical Path Method (CPM)

CPM is a network-based scheduling technique developed in 1957 jointly by Engineers at DuPont and Rand Corporation. In the same decade, the US Navy developed PERT (Program Evaluation and Review Techniques). The mechanics of the two approaches are similar and they are commonly referred to as CPM/PERT.

In CPM, activities are shown as a network of precedence relationships using activity-on-node network construction with single deterministic activity duration.

The technique can be broken down into 3 stages:

1. Planning:
   • Identify tasks and estimate duration of times
   • Draw a diagram
2. Scheduling:
   • Establish a timetable of start and finish times
   • Establish float
   • Evaluate and revise as necessary
3. Management: For the jobs of repetitive nature, activity time estimates can be predicted with considerable certainty due to the existence of experience. CPM enables the required sequential relationship between activities to complete a project.

Activities

Activities represent tasks from Tail Event to Head Event. The length of the arrow doesn’t represent the length of duration.

CPM/PERT gives an idea of:

• Critical & Non-critical Activities
• Preceding, Succeeding & Concurrent Activities

Dummy Activity

It is the activity which doesn’t consume any resources like time, cost, manpower, equipment, etc. but is only used to show relationships. It is represented by a dashed line.

Events

Occurrences before or after an activity. It is represented by circles, marked by number.

• Head Event (End of an activity)
• Tail Event (Start of an activity)
• Dual Role Event (Both start and end of the activity)

For any activity, the number on the Tail Event should not be greater than that on the Head Event. In other words, the number on Head Event must always be greater than that on Tail Event.

Critical Path

• It is the longest path of activities.
• It determines the total project duration.
• There may be more than one critical path in a network.
• A critical path may consist of less number of activities than non-critical path.
• It is the starting point for project planning.
• The critical activities (lying on the critical path) demand the requirement of resources prior to other activities to complete the project in time.

PERT (Program Evaluation and Review Technique)

PERT was developed by the US Navy for the planning and control of the Polaris missile program, with emphasis on completing the program in the shortest possible time. PERT has the ability to cope with uncertain activity completion times (e.g., for a particular activity the most likely completion time is 4 weeks but it could be anywhere between 3 weeks and 8 weeks).

In PERT, activities are shown as a network of precedence relationships using activity-on-node network construction. Multiple time estimates are used with probabilistic activity duration.

Used in project management for non-repetitive jobs (research and development work), where the time and cost estimates tend to be quite uncertain. This technique uses probabilistic time estimates.

For development works, researches, space programs etc., with no fixed time.

Three Time Estimates in PERT

• Optimistic Time (t_o) — Minimum time
• Most Likely Time (t_m) — Normal time
• Pessimistic Time (t_p) — Maximum time

Expected time estimate:

t_e = (t_o + 4t_m + t_p) / 6

Variance:

v = ((t_p − t_o) / 6)²

Standard Deviation:

σ = (t_p − t_o) / 6

2.5.4 Floats

Total Float (TF)

It is the total free time for an activity.

TF = LST − EST   or   LFT − EFT

Free Float (FF)

It is the spare time allowable for an activity so that the start time of succeeding activities are not affected.

FF of an activity = EST of Succeeding Activity − EFT of that activity

Independent Float (IF)

It is the maximum delay allowable for an activity so that the start time of succeeding activities are not affected. It may come negative but should be taken as zero.

IF of an activity = EST of Succeeding Activity − LFT of Preceding Activity − Duration

Interfering Float (Int. Float)

It is the difference between Total Float and Free Float.

Int.F = TF − FF

Summary of Floats for Numerical

Note: The TF of Critical Activities is always equal to zero.

2.5.5 Questions Answered by CPM & PERT

• What is the completion time of the project?
• Is the project on schedule?
• Is the project proceeding within budget?
• What are the critical activities?
• Can the project be finished early at the least cost?

Both CPM and PERT tools lead to the same end: a Critical Path and Critical Activities with a slack time equal to zero. Extensions of both PERT and CPM allow the user to analyze different types of resources in addition to time, and to trade off resources, in money, to analyze different types of schedules.

2.5.6 Differences between CPM and PERT

2.6 Project Cost

Project cost is the total expenditure incurred in the construction project. It is the sum of direct cost and indirect cost.

Total Project Cost = Direct Cost + Indirect Cost

Direct Cost

Direct cost includes materials, equipment, and manpower cost. The relationship between direct cost and time is non-linear. As we shorten the duration of an activity, the direct cost increases (more resources are needed to compress time). When the project is on its normal time, the direct cost is at minimum.

Indirect Cost

Indirect cost includes items like overhead cost, administrative cost, supervision cost, loss of revenue, loss of earning, profit, penalty, bonus, etc. The indirect cost increases approximately linearly with time. The longer the project takes, the greater the indirect cost.

Important Definitions

Normal Time (T_n)

Normal time is the standard time required for the completion of an activity by using normal resources. It is the scheduled time that a project team would expect to spend on an activity in normal working conditions.

Crash Time (T_c)

Crash time is the minimum possible time for the completion of an activity. It is achieved by deploying additional resources (extra labor, equipment, overtime).

Normal Cost (C_n)

The cost associated with normal time is called normal cost. It is the minimum direct cost required to complete an activity within the normal duration.

Crash Cost (C_c)

The cost associated with crash time is called crash cost. It is greater than normal cost. When the activity is crashed to its minimum possible time, the cost increases due to extra resources needed.

Cost Slope

Cost slope represents the increase in direct cost per unit decrease in time.

Cost Slope = (C_c − C_n) / (T_n − T_c)

It is the slope of the line joining the normal point (T_n, C_n) and the crash point (T_c, C_c) on the time-cost graph for an activity.

2.7 Time-Cost Trade-off (TCTO) 208120802079207420722071

Definition

Time-cost trade-off is a technique used in project management to determine the optimum project duration and the corresponding minimum project cost. It is based on the principle that reducing the project duration (crashing) increases direct cost but decreases indirect cost.

A construction project usually has a normal duration (T_n) and a crash duration (T_c). When each and every activity is completed in normal time, the direct cost is at minimum. But as we crash activities (reduce durations), the direct cost increases. On the other hand, indirect cost decreases as the project duration is shortened.

There is an optimum duration (T_o) where the total project cost (direct + indirect) is minimum. The process of finding this optimum duration is called Time-Cost Trade-off.

Steps in Time-Cost Trade-off (Optimization)

1. Step 1: Draw the network diagram, find all the paths and identify the critical path. The duration of the critical path is the normal project duration (T_n).
2. Step 2: Calculate the direct cost by summing up the normal costs of all activities. Calculate the indirect cost for the normal duration (Indirect cost per period × Normal Duration). Add them to get the total project cost at normal duration.
3. Step 3: Calculate the cost slope of each activity using the formula:

   Cost Slope = (C_c − C_n) / (T_n − T_c)

   Rank the activities on the critical path in ascending order of cost slope.
4. Step 4: Start crashing from the critical path. Select the critical activity with the least cost slope and crash it first. The activity can be crashed by maximum of (T_n − T_c) time units.
5. Step 5: After crashing an activity, calculate the new direct cost and indirect cost. Check the new total cost:
   • New Direct Cost = Previous Direct Cost + (Cost Slope × Time Reduced)
   • New Indirect Cost = Indirect Cost per period × New Duration
   • New Total Cost = New Direct Cost + New Indirect Cost
6. Step 6: Three cases may arise after crashing:
   • Case I: The critical path remains the same. Continue crashing the next least cost slope activity on the same critical path.
   • Case II: A new critical path appears along with the existing one. In this case, crash the common activity on both critical paths. If no common activity, go to Case III.
   • Case III (Simultaneous/Parallel Crashing): When there is no common activity on multiple critical paths, crash one activity from each critical path simultaneously. Choose activities with minimum combined cost slope.

Continue crashing until:

• The total cost starts to increase (the previous step gives optimum duration & minimum cost), OR
• No further crashing is possible (all critical activities are at crash time).

For minimum duration: Continue crashing until no further crashing is possible on any critical path.

Worked Example

A project consists of 5 activities with the following data. The indirect cost is Rs. 3150/week. Find the optimum project duration and minimum project cost.

Step 1: Network & Normal Duration

Paths and durations at normal time:

• Path 1: A → C → E = 8 + 6 = 14 weeks
• Path 2: B → D = 4 + 2 = 6 weeks
• Path 3: B → E = 4 + 4 = 8 weeks

Critical Path: A → C → E (14 weeks)

Step 2: Cost Slopes

Normal Duration Cost

• Normal Direct Cost = 600 + 300 + 500 + 400 + 200 = Rs. 2000
• Indirect Cost = 3150 × 14 = Rs. 44,100
• Total Cost = 2000 + 44,100 = Rs. 46,100

Step 3: Crash Activity C (Least cost slope on critical path = 100)

Crash C by 3 weeks (maximum): Duration of C = 6 − 3 = 3 weeks.

• New Critical Path: A-C = 8 + 3 = 11 weeks (still critical)
• Direct Cost = 2000 + (100 × 3) = Rs. 2300
• Indirect Cost = 3150 × 11 = Rs. 34,650
• Total Cost = 2300 + 34,650 = Rs. 36,950 (decreased, continue)

Step 4: Crash Activity A (Next least cost slope on critical path = 100)

Crash A by 2 weeks (maximum): Duration of A = 8 − 2 = 6 weeks.

• New duration of path A-C = 6 + 3 = 9 weeks
• Path B-E = 4 + 4 = 8 weeks
• Path B-D = 4 + 2 = 6 weeks
• Critical Path: A-C = 9 weeks
• Direct Cost = 2300 + (100 × 2) = Rs. 2500
• Indirect Cost = 3150 × 9 = Rs. 28,350
• Total Cost = 2500 + 28,350 = Rs. 30,850 (decreased, continue)

Step 5: Crash Activity E (Next on critical path = 150)

Now both A and C are fully crashed. Only E remains on the critical path (cost slope = 150).

Crash E by 2 weeks: Duration of E = 4 − 2 = 2 weeks. But note: paths may change.

• Path A-C-E: Not applicable here as network structure needs re-evaluation based on actual network.

At each step, check if the net saving (reduction in indirect cost minus increase in direct cost) is positive. If negative, the previous step gives the optimum.

The optimum is found when: Decrease in Indirect Cost < Increase in Direct Cost due to crashing.

Key Takeaways

• Always crash the critical activity with the least cost slope first.
• After each crash, re-identify the critical path(s).
• When multiple critical paths exist, crash common activities or crash simultaneously (parallel crashing).
• The optimum duration is where total project cost is minimum.
• Beyond the optimum, further crashing increases total cost because the increase in direct cost exceeds the saving in indirect cost.

Summary of Important Formulas

Important Things to Consider