Two Critical Path Activities Are Candidates for Crashing on a CPM

question 120

Multiple Choice

Two critical path activities are candidates for crashing on a CPM network. Activity details are in the table below. To cut one day from the project's duration, activity ________ should be crashed first, adding ________ to project cost. $$\begin{array} { | c | c | c | c | c | } \hline \text { Activity } & \text { Normal Time } & \text { Normal Cost } & \text { Crash Time } & \text { Crash Cost } \\\hline \mathrm { D } & 5 \text { days } & \$ 6,000 & 3 \text { days } & \$ 8,000 \\\hline \mathrm { E } & 8 \text { days } & \$ 4,000 & 4 \text { days } & \$ 6,000 \\\hline\end{array}$$

• A) D; $2,000
• B) D; $1,000
• C) E; $500
• D) E; $2,000
• E) E; $6,000

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Definitions:

Cross Price Elasticity

A gauge of the responsiveness in the demand for a specific product due to fluctuations in the pricing of another product.

Midpoint Method

A technique used in economics for calculating elasticity by averaging the starting and ending prices and quantities.

Cross-Price Elasticity

Measure of how the quantity demanded of one good responds to a change in the price of another good.

Positive

Affirmative, constructive, or based on factual data; often used in reference to positive statements in economics which describe the world as it is, rather than how it should be.