The Laurenster Corporation has determined the cli- ent will pay them a $10,000 b
ID: 2633344 • Letter: T
Question
The Laurenster Corporation has determined the cli-
ent will pay them a $10,000 bonus if they complete
the project in 14 weeks or less.
The associated normal times and costs as well as the
crash times and costs are shown below.
Considering the costs involved to crash the project determine if the Laurenster Corporation should
crash the project to 14 weeks to receive the bonus.
the answer for the problem isYes. The cost to crash is $2,200 i need to know why or how?
Activity Normal time Crash time Normal cost Crash cost a 3 2 600 1200 b 6 4 1200 2400 c 5 2 1200 2400 d 4 3 1200 1800 e 7 6 1200 1800 f 7 4 1200 3000 g 5 1 2400 4800 h 5 2 1200 3000 i 5 3 1800 2400 j 2 2 300 300 k 4 4 300 300 l 3 3 300 300Explanation / Answer
activity normal time Crash time normal cost crash cost a 3 2 600 1200 b 6 4 1200 2400 c 5 2 1200 2400 d 4 3 1200 1800 e 7 6 1200 1800 f 7 4 1200 3000 g 5 1 2400 4800 h 5 2 1200 3000 i 5 3 1800 2400 j 2 2 300 300 k 4 4 300 300 l 3 3 300 300 Total normal cost = $ 12,900 Total crash cost =$23,700 The increase in the cost for crashing the project by 14 weeks = $10,800 Bonus received $10,000 Hence the bonus received is less than crash cost . Hence laurenster corporation should not crash the project.
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