December 2002
Intermediate to advanced
848 pages
20h 22m
English
Content preview from The Six Sigma Handbook, Revised and Expanded, 2nd Edition
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15.6. COST CONSIDERATIONS IN PROJECT SCHEDULING
Most project schedules can be compressed, if one is willing to pay the additional costs. For the analysis here, costs are defined to include direct elements only. Indirect costs (administration, overhead, etc.) will be considered in the final analysis. Assume that a straight-line relationship exists between the cost of performing an activity on a normal schedule, and the cost of performing the activity on a crash schedule. Also assume that there is a crash time beyond which no further time saving is possible, regardless of cost. Figure 15.6 illustrates these concepts.
Figure 15.6. Cost-time relationship for an activity.
For a given activity the cost-per-unit-of-time saved is found as
When deciding ...
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