A Future Value Approach to Determining Project Duration

Abstract

Optimal project duration for situations where project duration can be shortened by “crashing” activities is analyzed. The cost components considered are; regular direct costs, crashing costs and overhead costs. The regular direct costs are those associated with carrying out the various activities of the project. The crashing costs are those associated with shortening the project duration and represent the time-cost tradeoff. The overhead costs are assumed to be constant throughout the project's life. To facilitate the analysis, the costs are approximated by mathematical expressions. Calculating the cumulative future value of all costs leads to determining the optimal project duration.