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A Linear Programming Model for Optimal Project Crashing Strategy with Delay Penalty on AOA Project Diagram

Edward Y. H. Lin, Edison J. W. Lin, Yen T. Hoang

Abstract



In light of the importance of optimal project crashing strategy in the studies and practice of project management, this paper takes into consideration of project crashing subject to project delay penalty. Based on AOA (Activity-on-Arc) project diagram, we first present an LP (Linear Programming) model towards the optimal project crashing strategy that can accommodate the discrete and fluctuating activity crash costs. We than use a numerical example to illustrate how such problem can be easily solved through LP software to obtain the optimal project crashing strategy when a project delay penalty is imposed. To explore the impact of project delay penalty change on the total crash cost, we further show that parametric analysis can be adopted to realize the turning point of project delay penalty change. This will be useful in the negotiation of project delay penalty setting. The results of this research can be incorporated in the existing LP software to develop a tailored package in the practice of project management.

Keywords


Linear programming; Project management; Activity crashing

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