The Critical Path Method or CPM is one of the methods for calculating the duration and sequencing of activities (tasks) by focussing on critical activities- those that do not have margin for delay. However, other activities which have lot of float or slack can be adjusted for resource reasons.
Also, the durations of many activities can be reduced to some extent. The reduction in duration of an activity by increasing the resources is known as compression.
This reduction in duration can be continued further till the limit is reached where no further reduction in duration is possible. That duration is known as crash duration. In other words crashing is the ultimate stage of compression. The cost associated with crashing is known as crashed cost.
The cost slope is the ratio of increase in cost to the decrease in time. Lower the cost slope, better is the activity for crashing. While crashing, the direct cost goes on increasing. However due to reduction in duration the indirect cost (fixed expenses) reduces.
If a graph is plotted for total cost against time the graph is U-shaped. The lowest point gives the optimum cost and optimum time.
Increasing the duration of an activity is known as decompression. Where as crashing is done for critical activities, decompression should be done for non-critical activities. In decompression, the activities with the highest cost slope are decompressed first.
The decompression process starts by drawing the crashed network and the activities are decompressed in the decreasing order of cost slopes of various activities. Physically it means that it is not necessary to provide maximum resources for each and every activity. The resources can be strategically removed without compromising the overall duration of the project and by reducing the cost.