TIME-COST MODELLING

By
CH CH KRISHNAJI
SCHOLAR NO : 1921303
STRUCTURAL ENGINEERING
DEPARTMENT OF CIVIL ENGINEERING
NIT SILCHAR
 CONTENTS
• INTRODUCTION.
• DIRECT COST OF THE PROJECT.
• INDIRECT COST OF THE PROJECT.
• TOTAL COST OF THE PROJECT.
• TIME-SCALE DIAGRAM.
• CRASHING OF NETWORK.
 INTRODUCTION
• For any project ,the two important aspects to be considered are
a) Project time
b) Project cost
• In actual projects, time is always related to cost but this
relationship is not linear.
• To find the minimum cost corresponding to an optimum
duration, time cost models are prepared.
• The total cost of a project constitutes direct cost and the
indirect cost.
 DIRECT COST OF THE PROJECT
• Direct cost is the directly identifiable cost based on experience and
judgement.
Examples: Material cost,labour cost,equipment cost etc..,.
• Direct cost of a project is a summation of direct cost of all activities in the
project.
• Direct cost associated with an activity increases with decrease in its
duration below normal duration. This is because of involvement of extra
resources , use of advance technology , extra wages for over time which
are usually higher than the regular wages etc..,.

NORMAL TIME
• Completion time of an activity
under normal circumstances is
called normal time.
• The cost of an activity associated
with normal time is called normal
cost.
CRASH TIME
• Minimum time in which an
activity can be completed
and this time cannot be
reduced even with
application of infinite
resources is called crash
time.
• The cost associated with
crash time is called crash
cost.
DIRECT COST CURVE OF AN ACTIVITY

 
COST SLOPE(C.S):
The slope of the COST VS DURATION curve is
called cost slope of an activity.

Cost Slope =
CRASHING POTENTIAL(C.P):
The difference between the normal
duration and crash duration is called crashing potential
of an activity.
C.P = Normal time – Crash time.
 INDIRECT COST
• Indirect cost of a project are those expenses which cannot be associated
to any individual activity of project.
• Indirect cost constitutes over head charges and outage losses.
Overhead charges:
These charges increases linearly with time at constant rate. They include
mantainance charges, insurance charges, establishment charges etc..,.
OUTAGE LOSSES:
Outage losses increases non linearly with time. They include the loss in
penalty, any mishappenings in the projects such as accidents, natural
calamities etc..,.
INDIRECT COST CURVES
INDIRECT COST CURVE OF
PROJECT

• In CRITICAL PATH METHOD , the total

indirect cost curve is assumed linear
for easy manual analysis.
 TOTAL COST CURVE

Minimum cost

duration

TOTAL COST = DIRECT COST + INDIRECT COST .

TIME – SCALE DIAGRAM
 CRASHING
• The process of reduction of total project duration along
the longest path of the network(i.e, critical path) is
called crashing.
• The objective of crashing analysis is to obtain minimum
cost and corresponding optimum duration of the
project.
Steps involved in crashing:
Step 1: Draw network diagram.
Step 2: Determine critical path of network.
Step 3: Draw time scale diagram of network.
Step 4: Find the cost slope of every activity.
Step 5: Start crashing the activity having least cost slop along the
critical path of the network.
Step 6: Each activity is crashed until its crashing potential is exhausted or
a new critical path is observed.
Step 7: Continue crashing till there is no further scope of crashing.
Step 8: For every stage of crashing find direct cost, indirect cost and total
cost of the project.
Step 9: The point in the crashing analysis which leads the lowest cost is
found out and the corresponding duration is the optimum duration of the
project.
 EXAMPLE
• Let us assume a project of indirect cost of Rs.2000 per
week.
Activity Normal Normal Crash Crash
Duration Cost Duration Cost
(2) (3) (4)
(1)
1-2 4 weeks Rs.4000 3 Rs.7000 Rs.3000/wk
1-3 8 weeks Rs.5000 7 Rs.8000 Rs.3000/wk
2-3 5 weeks Rs.8000 3 Rs.10000 Rs.1000/wk
 36500

36000
36000

35500

35000 35000
TOTAL
COST

34500

34000 34000

33500

Minimum
cost 33000
7 8 9

DURATION (WEEKS)
Optimum duration
TOTAL COST VS DURATION
 SUMMARY
• By the help of this concept cost modelling , we can get
minimum duration and optimum duration of the project.
THANK YOU