Construction Management Practice Exam

When a project is crashed from its normal duration to its optimal duration, the project's indirect costs are reduced. Indirect costs are expenses not directly tied to a specific project activity but rather associated with the overall project duration, such as overhead, administrative costs, and other expenses that accrue over time.

By shortening the duration of the project, the amount of time that these indirect costs are incurred is also minimized, leading to a total decrease in indirect costs. This is particularly important in construction management, as efficient time management can lead to significant savings in overall project expenditures. By focusing on time reduction, teams can achieve better budget management and improve project profitability.

The other options indicate changes that do not align with the mechanics of project costing in the context of crashing. For instance, if the project's duration were to increase, it would typically lead to an elevation in indirect costs, not a reduction. Similarly, crashing a project does not inherently reduce direct costs, nor does it create additional float; instead, it often places pressure on the timeline, which can reduce flexibility. Therefore, the correct understanding is that the act of crashing leads to a reduction in indirect costs due to the shorter project timeframe.