Day 13

Today morning we had lecture as usual. The topic today was about cost crashing.

It was a very interesting topic.

After teacher taught us how to do cost crashing, we did three assignments on cost crashing.

After the lesson we headed back.

Reflection

Today was a rather busy day as we had to complete three assignments about cost crashing .Personally, I feel that cost crashing can be very useful in real life applications.

Take for example, a person wants to renovate his house. This can be considered as a project. There are many activites involved during the renovation process and this will take up direct and indirect costs.

The longer the duration of renovating the house, the indirect cost will increase proportionally with the number of days. The indirect costs include the utility bills(how much electricity is used,for example lights and fans).

The direct costs,however, decreases not proportionally with time.

Direct costs will be the cost which that renovator has to pay to his subcontractors for the different activities that has to be done for the renovation.Simply put, if the renovation process is prolonged, the indirect costs will increase and the direct costs will decrease.

Cost crashing helps reduce the total costs by comparing different project durations and taking the most suitable one with the least total cost.