Ihab Saad – Project acceleration Time compression

Ihab Saad
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The speakers discuss the importance of accelerating a project to improve productivity and avoid overtime. They stress the need to manage and retain labor in a shorter period to avoid overtime and create a cost curve. The speakers provide guidance on converting a project duration to a cost slope and identifying critical and non-critical activities to reduce project duration. They also discuss the benefits of working in a longer shift and updating project timeline through multiple conditions and identifying the best methods to compress each activity.

AI: Summary ©

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			Accelerate the project. Finishing
the project early means contractor
		
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			can move to other jobs again. If
there are other opportunities that
		
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			the contractor needs to use these
resources for, then we're going to
		
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			try to shorten the duration of
this project in order to benefit
		
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			from that new opportunity. It may
be more profitable to do so that's
		
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			for the contractor if, for
example, we anticipate some
		
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			material or equipment price
increase in the future, and we
		
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			want to finish early so that to
avoid this price increase, that
		
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			would be another venue the owner
has directed the contractor to
		
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			accelerate the project. In this
case, is going to be considered an
		
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			owner initiated acceleration, and
usually the contractor would get
		
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			some reimbursement for any extra
costs that might incur due to that
		
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			owner initiated acceleration.
		
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			How to accelerate the project?
There are different ways, the
		
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			first of which is to revisit or
study the schedule thoroughly to
		
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			find any errors or unnecessary
logics or constraints. So for
		
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			example, if we have some
activities that are done on a
		
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			finish to start basis, what if we
can do them on a start to start
		
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			basis, or with lag or finish to
start basic with overlap, so that
		
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			we would shorten the duration of
completion,
		
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			fast track the project by breaking
it down into smaller packages and
		
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			starting the construction of
earlier packages while the latter
		
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			ones are still in design or
bidding. This is what we call fast
		
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			tracking of the project. Conduct
value, engineering, productivity,
		
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			improvement and constructability
studies. Are we making the best
		
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			use of our resources? Can we
increase the productivity of that
		
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			team of labor, or of that piece of
equipment, or the coordination
		
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			among these different resources,
change the method of construction
		
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			or its sequence, doing things in
parallel rather than doing them in
		
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			series, one after the other, might
result in time shortening,
		
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			ultimately improve the production
rate or P in the duration
		
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			calculation equation Q over P, if
I increase p, that means that,
		
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			while keeping the quantity the
same, that means that the duration
		
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			is going to drop
		
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			other options, which is,
unfortunately, what comes first to
		
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			some people's mind, work over
time, Over time might not always
		
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			be the solution, or offer
incentives to workers or crews for
		
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			improving productivity within the
same time. If you can finish more
		
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			work, you're gonna get a bonus or
acquire more workers and equipment
		
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			again to work within the same time
so that you don't have to work
		
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			overtime.
		
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			Because over time, by the way, you
know that you're gonna pay a
		
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			premium for the overtime maybe one
and a half times the average rate,
		
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			while you're not getting the same
productivity. Because imagine if
		
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			some worker have worked for eight
hours, and you're asking them to
		
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			work three more hours in overtime,
you do not expect that their
		
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			productivity is going to be the
same as during the normal work
		
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			hours, so you're paying more and
getting less
		
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			work a second or possibly a third
shift. So you're going to have
		
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			different shifts of labor, each
one working only for eight hours.
		
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			And in this case, you're going to
get fresh labor to work on the new
		
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			shift acquire special materials
and equipment that can help speed
		
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			up the work process. For example,
in concrete, we can have
		
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			accelerators that are going to
accelerate the setting up of the
		
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			concrete so that we can remove the
form works faster. Therefore we
		
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			can proceed to the next floor
faster. Improve project
		
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			management, or supervision, again,
project management and
		
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			encouragement and so on, proper
supervision can provide better
		
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			productivity rates, improve
communications among parties,
		
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			particularly during the submittal
process, to make sure that we get
		
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			our submittals on time. We get our
approvals on time, and we are not
		
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			delayed by such paperwork.
		
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			In order to accelerate the
schedule, the contractor will most
		
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			likely need additional resources
or better utilize existing ones.
		
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			As a project manager, you should
know how and when to accelerate
		
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			the schedule and understand the
trade off between time and cost,
		
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			because usually, as we agreed
before, time is a resource. You
		
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			pay money to acquire time. So what
we're trying to do here is buying
		
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			time by doing more in a shorter
period of time, and that's going
		
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			to cost us, most likely, some
additional resources
		
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			for the time. And cost trade off.
We're going to deal with some new
		
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			terms, and basically we're going
to deal with primarily five, four
		
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			or five different new terms. Let's
learn about them here right now,
		
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			the original duration for each
activity, which is also called the
		
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			normal duration under under normal
conditions. How much would it take
		
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			to finish that activity?
		
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			And that's referred to as nd, or
normal duration,
		
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			the cost associated with
completing the activity within its
		
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			normal duration is.
		
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			Have a higher cost per unit, and
at the end, we have a lower cost
		
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			per unit. This is what we call the
economy of scale, or buying in
		
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			bulk. The more you buy, the more
discount you're gonna get on the
		
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			price. So the larger the amount
that you order, the lower the unit
		
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			price that you're gonna get. And
that's why the unit price might
		
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			not be
		
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			linear.
		
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			The question now is, if we want to
calculate the total cost of the
		
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			project, which is direct plus
indirect, in this case, it's going
		
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			to be the once only plus the time
related, plus which are indirect,
		
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			plus the quantity proportional
which is direct. The dilemma that
		
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			we have here is, how are we going
to add these three costs together?
		
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			The time related and the ones only
can can be added together because
		
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			they have the same units time on
the horizontal axis and costs on
		
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			the vertical axis. So we can add
these two graphs together, but we
		
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			cannot add this third one because
it has a different element on the
		
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			horizontal axis, which is
quantity. We cannot add apples and
		
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			oranges, in this case, time and
quantity. Therefore we have to
		
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			think about a way of converting
this quantity cost curve into a
		
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			time cost curve, and we can add it
to the other two. Therefore we can
		
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			get the total cost of the project
graphically as well.
		
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			So here we're going to start
learning about something called
		
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			the cost slope of activities. Now
we're talking about direct costs
		
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			only, cost of labor, material,
equipment, subcontractors, etc.
		
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			If you have this time, which is a
normal duration to finish the
		
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			activity, it's going to cost you
that much, which is a normal cost.
		
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			We agree that if you try to
shorten the time, you're going to
		
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			need to use more resources.
Therefore, if we want to do it at
		
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			the crash duration, which is
shorter than the normal duration,
		
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			we're going to need to have a
crash cost which is higher than
		
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			the normal cost. So basically what
we have on the horizontal axis
		
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			here the difference between the
normal duration and the crash
		
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			duration is going to be called
delta t, or difference in time.
		
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			That's the difference between
normal duration and crash
		
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			duration, which can also be
referred to as the compressibility
		
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			of the activity. This is the
amount of time by which the
		
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			activity can be compressed.
		
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			And on the vertical axis, the
difference between the crash costs
		
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			and the normal cost is going to be
the delta c, or difference in
		
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			cost. So of course, crash cost is
going to be higher than normal
		
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			cost. The slope connecting these
two dots, the CC, CD, with the nd
		
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			and C,
		
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			we're going to get what's called
activity cost slope. Activity cost
		
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			slope represents the average
increase in costs by shortening
		
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			the activity by one day. So delta
c over delta t. How much is it
		
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			going to cost, on average, for
short shortening the activity by
		
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			one day, the units of the activity
cost slope are going to be dollars
		
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			per day or dollars per hour,
depending on the units of that
		
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			time on the horizontal axis.
		
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			So talking about the activity
utility curve, it's essential data
		
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			required for the application of
network compression are the direct
		
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			costs and time curves for the
activity and that's called the
		
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			activity utility curves.
		
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			So basically here what we said
normal time and normal costs are
		
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			going to give us a point. Crash
time and crash costs are going to
		
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			give us another point. This is
going to be the relationship
		
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			between the two. But for
simplicity, we're going to assume
		
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			that it is a straight line
connecting these two dots, as we
		
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			have seen on the previous slide,
		
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			direct cost for each method of
accomplishing accomplishing an
		
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			activities plotted against the
duration required to do it in that
		
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			way. In practice, there are
normally only a limited number of
		
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			ways investigated, and thus only a
finite number of points are
		
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			defined. It's not an infinite
number of methods, but it's a very
		
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			discrete number of points.
Basically, if I can finish it in
		
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			five days, it's going to cost that
much. If I finish it in four days,
		
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			it's going to cost that much. If I
finish it in three days, it's
		
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			going to cost that much.
		
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			So that's basically what we're
talking about here.
		
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			It's straight lines, short
segments of straight lines. And
		
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			we're going to approximate that by
connecting these two points at the
		
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			end to get the cost slope that we
just talked about.
		
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			That's pretty much the same thing.
		
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			So this is the cost loop s2 is the
cost slope.
		
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			Per hour, plus the 32 to $32 per
hour, all of this is going to be
		
00:30:04 --> 00:30:08
			the direct cost for the project.
Now, if we want to shorten that
		
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			duration from 100 hours to shorter
than that, then we're going to use
		
00:30:11 --> 00:30:16
			overheads. The more overhead
hours, the shorter the duration of
		
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			the project, but the higher cost
by adding these overtime wages and
		
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			benefits,
		
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			and then you can, you can
calculate the the net, because
		
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			each day that you shorten assuming
that we're working eight hours a
		
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			day, so 12 and a half days, each
day that you shorten, you're gonna
		
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			save on the indirect costs, $100
per day. So you're gonna pay more
		
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			in the direct costs, but you're
going to pay less in the indirect
		
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			costs, and that's going to be the
balance that we're going to be
		
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			looking for.
		
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			The objective is to shorten the
total project duration by
		
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			compressing the duration of
activities on the critical path.
		
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			Only critical activities will be
considered for compression.
		
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			Remember now that we're going to
have four conditions. So you have
		
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			to remember these four conditions
before you can start compressing,
		
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			before even considering an
activity for compression, these
		
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			four conditions are, first of all,
the activity has to be critical.
		
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			If it is not critical, do not
consider it for compression.
		
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			Number two, it has to be
compressible. If its delta t is
		
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			equal to zero, which means its
normal duration is the same as the
		
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			crash duration, then this activity
cannot be compressed. So do not
		
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			waste your time or money.
		
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			Third, it has to be an effective
activity. And this is the very
		
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			interesting part here. If you have
two critical activities that are
		
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			connected by a start to start
relationship.
		
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			If you compress the duration of
the first one, is that going to
		
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			affect the completion date for the
second one? The answer is no,
		
00:31:52 --> 00:31:55
			because they are linked by start
to start so the completion of the
		
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			first one does not affect the
shortening the duration of the
		
00:31:59 --> 00:32:04
			project. Same thing. If you have
two critical activities connected
		
00:32:04 --> 00:32:08
			by a finish to finish
relationship, what's driving the
		
00:32:08 --> 00:32:12
			completion date for the first for
the second one is the relationship
		
00:32:12 --> 00:32:16
			with the previous predecessor. So
if you shorten the duration of
		
00:32:16 --> 00:32:19
			that last activity by itself, it's
not going to achieve anything,
		
00:32:19 --> 00:32:23
			because it has to wait for that
number coming from its predecessor
		
00:32:23 --> 00:32:27
			anyway. Therefore, if you have a
start to start relationship on two
		
00:32:27 --> 00:32:32
			critical activities, the first one
would be considered ineffective.
		
00:32:32 --> 00:32:35
			If you have a finish to finish
relationship on two critical
		
00:32:35 --> 00:32:39
			activities, the second one or the
successor, would be considered
		
00:32:39 --> 00:32:39
			ineffective
		
00:32:41 --> 00:32:44
			once an activity satisfies all of
these three conditions, it's
		
00:32:44 --> 00:32:48
			critical, it's compressible and
it's effective. We have multiple
		
00:32:48 --> 00:32:51
			activities satisfying all of these
three conditions. Then which one
		
00:32:51 --> 00:32:55
			to start with? The cheapest one to
compress? Which means the one that
		
00:32:55 --> 00:33:00
			has lowest cost slope. So among
the critical, compressible and
		
00:33:00 --> 00:33:03
			effective activities, we will
start with the activity, or
		
00:33:03 --> 00:33:06
			activities with the lowest cost
slope, then move to other
		
00:33:06 --> 00:33:10
			activities in an ascending order
of their cost slope. So I'm going
		
00:33:10 --> 00:33:12
			to keep the most expensive
activity until the end.
		
00:33:17 --> 00:33:20
			So the basic procedure is start
with the critical activity having
		
00:33:20 --> 00:33:24
			the flattest or the lowest cost
slope, and then considering
		
00:33:24 --> 00:33:30
			successively those having steeper
or higher cost slopes, if non
		
00:33:30 --> 00:33:33
			critical activities. Now, while we
are compressing, we're going to
		
00:33:33 --> 00:33:36
			keep an eye on the non critical
activities. The non critical
		
00:33:36 --> 00:33:41
			activities are recognized by
having total float, but each time
		
00:33:41 --> 00:33:44
			we are compressing the duration of
the project, that total float
		
00:33:44 --> 00:33:49
			decreases until a certain point in
time where the activity might lose
		
00:33:49 --> 00:33:53
			all of its total float, the non
critical activity might lose all
		
00:33:53 --> 00:33:56
			of its total float, becoming
activity, then it becomes a new
		
00:33:56 --> 00:33:58
			candidate for compression
		
00:33:59 --> 00:34:02
			if non critical activities lose
their flow time and become
		
00:34:02 --> 00:34:05
			critical duration, the compression
of the original critical
		
00:34:05 --> 00:34:09
			activities, then these new
critical activities must also be
		
00:34:09 --> 00:34:13
			considered when selecting
activities to compress to further
		
00:34:13 --> 00:34:18
			reduce the total project duration.
Question Now here is I started
		
00:34:18 --> 00:34:22
			with one critical path and several
other non critical paths. While
		
00:34:22 --> 00:34:26
			doing my compression, one of the
non critical paths became
		
00:34:26 --> 00:34:30
			critical. So now I have two
critical paths. Which one should I
		
00:34:30 --> 00:34:34
			compress to reduce the total
duration of the project? The
		
00:34:34 --> 00:34:38
			answer is both, because if you
compress one and leave the other,
		
00:34:38 --> 00:34:42
			if you remember the definition of
the critical path, it was the
		
00:34:42 --> 00:34:45
			longest path in the network. So if
you compress one of them and leave
		
00:34:45 --> 00:34:50
			the other one, then that one that
was left without compression is
		
00:34:50 --> 00:34:53
			still going to be the longest
path, or the critical path, and we
		
00:34:53 --> 00:34:56
			have not achieved anything. So if
you're going to compress two
		
00:34:56 --> 00:34:59
			paths, you have to compress both
by the same amount.
		
00:35:00 --> 00:35:00
			At the same time.
		
00:35:02 --> 00:35:07
			So the safest method is going to
be compressed the network one day
		
00:35:07 --> 00:35:11
			at a time, unless the minimum
total float on the non critical
		
00:35:11 --> 00:35:15
			activities is greater than one
day. So let's say the minimum
		
00:35:15 --> 00:35:19
			total float on the non critical
activities is 12 days. It means
		
00:35:19 --> 00:35:23
			that I can compress the network
the original critical path by up
		
00:35:23 --> 00:35:27
			to 12 days before creating a new
critical path.
		
00:35:28 --> 00:35:32
			Once I recognize this fact, I can
compress more than one activity by
		
00:35:32 --> 00:35:38
			more than one day in one single
step to simplify my calculations
		
00:35:41 --> 00:35:45
			at each stage of the network
compression calculations, we're
		
00:35:45 --> 00:35:48
			going to follow these steps. First
of all, identify the critical
		
00:35:48 --> 00:35:53
			activities. Second, delete from
considerations those with zero
		
00:35:53 --> 00:35:57
			potential for compression. If they
have delta t equal to zero or they
		
00:35:57 --> 00:36:01
			are incompressible, then we're not
going to look at them among the
		
00:36:01 --> 00:36:05
			critical activities, exclude the
non effective ones, as we said,
		
00:36:05 --> 00:36:09
			the predecessors in start to start
relationship and the successors in
		
00:36:09 --> 00:36:10
			a finish to finish relationship.
		
00:36:11 --> 00:36:15
			Number four, select that activity
or group of activities, if
		
00:36:15 --> 00:36:18
			parallel critical paths exist with
the lowest combined cost. Look if
		
00:36:18 --> 00:36:21
			you're trying to compress more
than one path at the same time,
		
00:36:22 --> 00:36:26
			and always watch for the creation
of new critical paths. So keep an
		
00:36:26 --> 00:36:30
			eye on the total float of the non
critical activities, and watch if
		
00:36:30 --> 00:36:33
			it's dropping and these activities
are becoming critical
		
00:36:37 --> 00:36:40
			at each stage of the network
compression, we're also going to
		
00:36:40 --> 00:36:45
			notice, compress the activity, or
activities as identified in step
		
00:36:45 --> 00:36:49
			three, update the network time
calculations and the corresponding
		
00:36:49 --> 00:36:52
			Project Direct Cost. Repeat these
steps until
		
00:36:53 --> 00:36:58
			further. Direct reduction in the
project duration is not possible,
		
00:36:58 --> 00:37:01
			or until the desired project
duration is reached. So for
		
00:37:01 --> 00:37:04
			example, we may say, I do not want
to compress the network to the
		
00:37:04 --> 00:37:08
			maximum. I just need to save three
days. So I'm going to compress it
		
00:37:08 --> 00:37:11
			only by three days and then stop
the project is late by three days.
		
00:37:11 --> 00:37:14
			I don't want to shorten it beyond
that, so only three days of
		
00:37:14 --> 00:37:18
			compression are going to be
needed, or until the cost of
		
00:37:18 --> 00:37:20
			compression is no longer
economically feasible or
		
00:37:20 --> 00:37:24
			meaningful. So if the question is,
compress the project duration
		
00:37:24 --> 00:37:29
			until I reach that lowest point on
the total cost curve. Beyond that,
		
00:37:29 --> 00:37:32
			compressing the duration is going
to result in another increase in
		
00:37:32 --> 00:37:36
			cost, I don't want that. So I just
want to reach the lowest cost
		
00:37:36 --> 00:37:40
			point, which is going to be called
My optimum duration.
		
00:37:42 --> 00:37:45
			So we're going to stop here for
this time, and then in our next
		
00:37:45 --> 00:37:48
			lecture, we're going to look at an
example, and we're going to solve
		
00:37:48 --> 00:37:53
			that example in systematic steps.
I'll see you in a short while,
		
00:37:53 --> 00:37:55
			while working on that example.