Which of the following statements regarding cost-time trade-offs in Critical Path Method (CPM) networks is true?

• A. Lengthening the duration of a project activity always decreases its direct cost.
• B. Shortening the duration of a project activity usually increases its direct cost.
• C. All activities on the critical path can be shortened without any increase in cost.
• D. Cost-time trade-offs in CPM networks do not affect the overall project completion time.

Answer: (B)

Verified step by step guidance

1. Understand the concept of cost-time trade-offs in CPM networks: This involves analyzing how changes in the duration of project activities affect their direct costs and the overall project timeline.
2. Recall that shortening the duration of an activity (also called crashing) typically requires additional resources or overtime, which usually increases the direct cost of that activity.
3. Recognize that lengthening the duration of an activity does not always decrease its direct cost, because some costs may be fixed or indirect, and extending time might increase overhead or delay penalties.
4. Note that not all activities on the critical path can be shortened without cost increases; shortening usually involves extra expenses, and some activities may have limits on how much they can be reduced.
5. Understand that cost-time trade-offs directly affect the overall project completion time because changing activity durations on the critical path changes the project's total duration.