Three Critical Path Activities Are Candidates for Crashing on a CPM

question 105

Essay

Three critical path activities are candidates for crashing on a CPM network. Activity details are in the table below.
$$\begin{array} { | c | c | c | c | c | } \hline \text { Activity } & \text { Normal Time } & \text { Normal Cost } & \begin{array} { c } \text { Crash } \\\text { Duration }\end{array} & \text { Crash Cost } \\\hline \mathrm { X } & 8 \text { days } & \$ 6,000 & 6 \text { days } & \$ 8,000 \\\hline \mathrm { Y } & 3 \text { days } & \$ 1,800 & 2 \text { days } & \$ 2,400 \\\hline \mathrm { Z } & 12 \text { days } & \$ 5,000 & 9 \text { days } & \$ 7,700 \\\hline\end{array}$$
a. What is the crash cost per unit time for each of the three activities?
b. Which activity should be crashed first to cut one day from the project's duration; how much is added to project cost?
c. Which activity should be the next activity crashed to cut a second day from the project's duration; how much is added to project cost?

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Definitions:

Reorganization Plan

A document outlining the proposed restructuring of a company's operations, finances, or structure during bankruptcy proceedings.

Chapter 11

A provision of the United States Bankruptcy Code that permits reorganization under the bankruptcy laws of the United States.

Debtor's Assets

The property or funds owned by a debtor that may be used or taken to repay debts.

Repayment-plan Bankruptcy

A bankruptcy procedure that involves restructuring a debtor's payment obligations to pay off debts over time, under court supervision.