For the following data, what is the rate of crashing ? Crash cost = INR 10,000; Normal cost = INR 5,000; Normal time = 10 days; Crash time = 5 days
- AINR 1000/dayCorrect
- BINR 5000/day
- CINR 10000/day
- DINR 500/day
Solution
Concept
Cost slope
Formula
Cost slope = (Crash cost − Normal cost) / (Normal time − Crash time)
Step-by-step solution
1. Cost slope = (10 000 − 5 000) / (10 − 5) = 1 000 per day.
Explanation
The cost slope is the extra direct cost of shortening an activity by one day.
Why the other options are wrong
5000/day is the extra cost divided by one day, 10000 is the crash cost, and 500 divides by ten days.
Shortcut
Slope = ΔCost / ΔTime.
Common mistake
Dividing by the normal time.
Correct answer: A) INR 1000/day