5.8 Crashing the Project: Budget Effects*

In lesson seven of the Planning and Resource Management course we examine the decision of whether or not to crash a project's activities strictly from the perspective of the schedule. Crashing involves shortening activity duration times by adding resources and incurring additional direct costs. However, crashing project activities has direct impact on the project budget. To illustrate this point, we have reproduced (below, Figure 4.4) the standard time-cost curve discussed in that course. It is clear from this figure that there is an inverse relationship between the cost of crashing and the time saved in accelerating the activity's schedule. Hence, if the cost of crashing an activity is disproportionately high for the time saved, then it is not advisable to crash that activity. On the other hand, if time and schedule issues of the project are critical, as in the case of event project management like the Olympic Games, then it is acceptable to incur the extra cost and the decision to crash the project should be supported.

Figure 5.4 A Standard Time-Cost Tradeoff Curve
Source: Pinto, forthcoming. Used with Permission.

*Please Note: Portions of section 4.8 were adapted from Pinto, J. K. (forthcoming). Project Management: Achieving Competitive Advantage. Upper Saddle River, NJ: Prentice Hall.Used with Permission.