Question

Illustrate and explain your understanding from Time-Cost tradeoff Scheduling?

Answer 1

• Time-Cost Tradeoff Scheduling is a relationship between the project's completion time and the cost of the project. This trade-off can be proportional or direct. And accordingly, we can set an optimum project schedule to minimize the overall cost by using our studies to determine and understand the time & cost relationship.
• The costs are of 2 types: Direct Cost( like salaries, machinery i.e project activity related costs) & Indirect Cost( overhead costs like taxes, etc)
• Total Project Cost = D+I ( i.e Direct + Indirect)

There is a concept which is known as project crashing which refers to the reduction in the overall time to do some activity which will ultimately decrease the overall project completion time. The critical path determines the total project completion time and hence we can crash the project i.e reduce the time of the activities on the critical path.

The procedure to do a Time-Cost Tradeoff Scheduling is :

• First, calculate/determine the Normal Time and the Crash Time for each activity on the critical path.
• Evaluate the Normal Cost and the Crash Cost for each activity on the critical path.
• Calculate the Slope ( Cost-Time trade-off ) is to be evaluated for each activity.

The formula for slope is=> [C.C-N.C] / [N.T-C.T]

where : C.C = Crash Cost

N.C = Normal Cost

N.T = Normal Time

C.T = Crash Time

We then reduce the activities which have the lowest $/time ( cost-per-unit time) and then draw a curve relationship i.e

The lowermost point on the total project cost is that it is the minimum point on the total project cost curve and the most optimum.

This entire process of calculating the optimum project cost and the corresponding total project time is known as time-cost tradeoff scheduling.