A CPM Time-Cost Computational Algorithm for Arbitrary Activity Cost Functions

Abstract

The development and use of the time-cost trade-off curve for a project is an essential part of a CPM analysis, since small variations in project duration could heavily affect the project’s cash flow. Several procedures exist for developing this curve. However, either they assume un-realistically simplified forms for the cost-time relations of the activities, whereupon the project curve is inaccurate and of little use, or they employ complex and impractical analytical techniques. This paper suggests a simple and efficient computational algorithm for developing the project time-cost curve for arbitrary, and thus realistic, cost-time relations for the activities. The algorithm proceeds in steps understandable by the average user and it is suitable for both hand calculations and computer solutions. Based on a scheme for reducing the ranges of acceptable values for activities durations, the algorithm produces either optimal or cost-satisficing plans, as desired, for different project durations.

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