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TCTO numerical: seven activities, Rs 225/day

Short answer

With indirect cost Rs 225/day, cost slopes (cheapest Rs 200/day) exceed the saving. Optimum is normal 19 days, total cost Rs 13,475. Minimum possible time is 12 days (total Rs 15,466.67).

Calculate the minimum cost, optimum duration using time cost trade off analysis for the following project schedule consisting of seven activities. Also find the possible minimum time to complete the project. Indirect cost of the project is Rs. 225 per day.

S.N.Project ActivityImmediate PredecessorNormal Duration (days)Crash Duration (days)Normal Cost (NPR)Crash Cost (NPR)
1A-6414001900
2B-8520002800
3CA4211001500
4DA328001400
5EB, C639001600
6FD10625003500
7GE32500800

Given data and method

Indirect cost = 225 Rs/day. Time-cost trade-off (TCTO) crashes the activities on the critical path, one time-unit at a time, always choosing the cheapest cost slope, as long as the saving in indirect cost is more than the extra direct cost.

Cost slope=Crash cost−Normal costNormal duration−Crash duration\text{Cost slope}=\frac{\text{Crash cost}-\text{Normal cost}}{\text{Normal duration}-\text{Crash duration}}
ActivityNormal durCrash durNormal costCrash costSlope
A641,4001,900250
B852,0002,800266.67
C421,1001,500200
D328001,400600
E639001,600233.33
F1062,5003,500250
G32500800300

Paths at normal duration

  • A-C-E-G = 19 days
  • A-D-F = 19 days
  • B-E-G = 17 days

Critical activities (on the longest path or paths): A, C, D, E, F, G; normal duration = 19 days; normal direct cost = 9,200 Rs.

Crashing, step by step

StepCrash (by 1 unit)Slope/costDurationDirectIndirectTotal
0--199,2004,27513,475
1A250189,4504,05013,500
2A250179,7003,82513,525
3E+F483.331610,183.333,60013,783.33
4E+F483.331510,666.673,37514,041.67
5E+F483.331411,1503,15014,300
6F+G5501311,7002,92514,625
7B+C+D1,066.671212,766.672,70015,466.67

(Rows with several activities show activities crashed together because two or more paths are critical. After step 2, all three paths, including B-E-G, are 17 days long, so a cut must shorten all three: E+F (Rs 483.33) is the cheapest such combination; C+F would leave B-E-G at 17 days.)

Result

  • Optimum (minimum-cost) schedule: duration 19 days, direct cost 9,200 + indirect 4,275 = 13,475 Rs.
  • Activities crashed at the optimum: none. Durations: A=6, B=8, C=4, D=3, E=6, F=10, G=3.
  • Minimum possible duration: 12 days, with total cost 15,466.67 Rs (direct 12,766.67 + indirect 2,700).

Answer: minimum cost Rs 13,475 at the optimum (normal) duration of 19 days, since the cheapest way to shorten both critical paths (A, Rs 250/day) costs more than the Rs 225/day indirect cost saved; the minimum possible time to complete the project is 12 days (total cost Rs 15,466.67).

✓ Answer checked by Claude Opus 5.5 (high effort)

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