Deccan Speciality Chemicals: Crashing a Commissioning Project With an Imported Panel
Deccan Speciality Chemicals is commissioning a blending plant. The network is: A, site and civil works, 4 weeks. After A, B (equipment erection, 6 weeks) and C (piping and utilities, 5 weeks) run in parallel. B is followed by D (electricals, 3 weeks); C by E (instrumentation, 4 weeks). F (tie-in and testing, 2 weeks) follows both D and E, and G (commissioning, 3 weeks) follows F. Separately, the imported control panel is ordered after A, takes 10 weeks to arrive, and must be on site before G can start. The board has promised the client 16 weeks. Crash options: B up to 2 weeks at Rs 40,000 a week, C up to 2 weeks at Rs 30,000 a week, D up to 1 week at Rs 25,000, E up to 1 week at Rs 70,000. The panel supplier offers a 2-week expedite for Rs 3,50,000, or airfreight of a partial consignment for Rs 1,20,000 that covers only the first production run and saves one week.
1. Identify the critical paths and normal duration. What is the cheapest way to reach 17 weeks, and why is the obvious two-week crash the wrong move?
Read the worked answer
Paths through the network:
- A-B-D-F-G = 4 + 6 + 3 + 2 + 3 = 18 weeks.
- A-C-E-F-G = 4 + 5 + 4 + 2 + 3 = 18 weeks.
- A-panel-G = 4 + 10 + 3 = 17 weeks.
Normal duration is 18 weeks, with two critical paths of equal length and the panel path carrying one week of float.
To reach 17 weeks, one week must come off each of the two critical paths. The cheap-looking instinct is to crash B (the longest activity) for two weeks at Rs 80,000, but crashing only B leaves A-C-E-F-G at 18 weeks and the project does not move. Crashing requires one activity from each path:
- B + C = 40,000 + 30,000 = Rs 70,000
- D + C = 25,000 + 30,000 = Rs 55,000
- B + E = 40,000 + 70,000 = Rs 1,10,000
- D + E = 25,000 + 70,000 = Rs 95,000
Cheapest is D and C, one week each, Rs 55,000, giving 17 weeks. Note that after crashing, A-panel-G at 17 weeks has become critical too, so the project now has three critical paths and zero float on the panel - a risk position, not just a schedule.
2. Can the 16-week promise be met? Cost the options and recommend what to tell the board.
Read the worked answer
At 17 weeks the panel path is already critical. To reach 16 weeks, two weeks must come off both process paths and one more week off the panel path, that is, the full 2-week expedite at Rs 3,50,000 - the Rs 1,20,000 partial airfreight saves only one week and cannot deliver 16.
Cheapest two-week compression of the process paths: path A-B-D-F-G needs 2 weeks; B for 2 costs Rs 80,000, or B for 1 plus D for 1 costs Rs 65,000. Path A-C-E-F-G needs 2 weeks; C for 2 costs Rs 60,000, versus C for 1 plus E for 1 at Rs 1,00,000. Cheapest combination is B (1) + D (1) + C (2) = 25,000 + 40,000 + 60,000 = Rs 1,25,000, plus Rs 3,50,000 for the expedite.
Total crash cost to reach 16 weeks is about Rs 4,75,000 against Rs 55,000 for 17 weeks - a marginal Rs 4,20,000 for one week, and it consumes all crashing capacity, leaving no recovery room if erection slips. It also converts a schedule problem into a supplier risk: a two-week expedite from a single source is a promise, not a control.
Recommendation to the board: commit to 17 weeks now, spend Rs 55,000 on D and C, and spend Rs 1,20,000 on the partial airfreight - not to shorten the project but to restore one week of float on the panel path, avoiding a three-critical-path position. If the client insists on 16, price it as a variation of Rs 4,75,000 plus a risk premium, and make the expedite a supplier contractual milestone with liquidated damages. Also order the panel earlier: if the panel were released in week 1 rather than after A, the whole constraint would disappear.