Question

Statement (I): Crashing of project duration always increases the cost of the project on its completion, no matter what the indirect, or overhead, costs are.

Statement (II): The critical path along the project activities network diagram is compressed in the process of investigating the crashing of the project duration, and not the non-critical activities, up to a certain stage of crashing. 

1. Both Statement (I) an Statement (II) are individually true and Statement (II) is the correct explanation of Statement (I) 
2. Both Statement (I) and Statement (II) are individually true but Statement (II) is not the correct explanation of Statement (I)
3. Statement (I) is true but Statement (II) is false 
4. Statement (I) is false but Statement (II) is true 

Answer 1

Correct Answer - Option 4 : Statement (I) is false but Statement (II) is true 

Concept:

Project crashing is the method for shortening the project duration by reducing the time of one or more critical activities to less than their normal time.

Crashing is achieved by devoting more resources. Thus the cost associated with the project is increased.

Indirect cost-

Indirect costs on a project are those expenditures that can not be apportioned or clearly allocated to a project's individual activities but are assessed as a whole.

The indirect cost rises with increased duration.

The total indirect cost curve will thus be curved.

Direct cost-

These include labour cost, material cost, equipment cost, etc.

So in crashing, the duration is decreased so the indirect cost may decrease. So the cost may increase or decrease due to crashing. So given statement (I) is wrong.

Steps in crashing-

1. Estimate project duration and find the critical path.
2. Find the cost slope of each activities.
3. The critical activity having minimum cost slope is crashed in 1^st stage. The next stage crashing will involve actively having a second lower cost slope in the critical path.
4. The total cost of the project at this stage is calculated.
5. Steps 3 and 4 are repeated till all the activities of the project are crashed along critical paths, the corresponding time is the crash time of a project.
6. It is to be noted that only critical activities should be crashed.

 

So from this, we can say statement (II) is correct.