Explain Time-Cost trade off in CPM.  (Oct 2003)



Time – Cost trade off means we are ready to bear a higher cost for completing the project in a shorter period of time. This can be done by employing extra resources to complete activities in a shorter period of time. This is called crashing of network. It may not be possible to crash all activities in the network.

As the duration of project completion reduces, direct cost of project (activities) increases. Indirect cost reduces because it is on a per day basis. Hence, as duration reduces, indirect cost will reduce. The effect on total cost may be increase or decrease. We have to find that duration for which Total cost of project is minimum. This is called optimal cost. Corresponding duration is optimal time of project completion.


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