Project Management 219

INTRODUCTION
to
discussed various activities pertaining
n the previous chapters, we have of
from scratch; that is, setting up
the operations in the hotel business right
s u c c e s s . During
the c o u r s e of
it an operational
d
new property
to making facility
terms such as project planning,
o u r discussions, we often came a c r o s s focus
So far, the
activities, etc. being used in various contexts.
designing, and every aspect
was on the various activities o r tasks
that went into each
for those
of planning a hotel facility as also the kind
of resources required
within
these tasks is their accomplishment
acivities. An important aspect of o r finances
at hand. This is
the desired time frame and within the budget
and scrupulous
because apart from good planning, what
is required is careful
the success of the business activity
implementation of those plans to ensure
undertaken. various
lhe process of planning and executing a project by synchronizing
within the desired timelines
constituent activities to achieve its accomplishment
have defined
and available resources is called project management. Experts
the UK Association of
management in various ways. According to
project monitoring, and
'it is a process of planning, organizing,
roject Management, achieve
a project and the
motivation involved to
controlling of all aspects of
cost and performance
the project objectives safely and within the agreed time,
the hospitality and service industry, you
criteria. As a future manager of such as planning a n e w
hotell
are likely to come across scores of projects,
even a research
an old property, or
restaurant/bar, or may be renovating
It therefore, necessary to not only
project, during the course of your career. is,
have an idea of the contours of planning but
also a good grasp of the tools or
instruments that aid in efficient project management.
activities involved
Planninga new project requires of various
identification
in the project and the sequence in which these activities have to be performed.
within the scheduled time, thus
A well planned project leads to completion
cost. In this chapter, we shall focus
on
avoiding unnecessary delays and extra and models
of project management, particularly on
the tools
various aspects
that are widely used to ensure the completion of projects within the specified
time and within the limitation of all resources.

THE NETWORK MODELS (CPM/PERT}

The key to successful implementation of the objectives and policies in any

is to delineate and execute various projects that would

clearly
organization
lead to the achievement of the organizational goals. Simply put, a project
220 Hotel Facility Planning

is a
group of tasks aimed towards the achievement of an
objective withinin
stipulated time and cost. Thus, the first step in project management Woull
be determination of the constituent activities and their interrelationshine
estimation of the resources required, and a realistic projection of the tim
ips,
me
needed to accomplish these activities. This detailed analysis of the project has
to be followed up with execution of the activities under complete monitorine
and control to meet the time lines and avoid cost escalation of the projects,

Network Analysis
An mportant aspect of project management is cost control and time manage.

ment. The project managers would always aim to accomplish activities in the
shortest possible time without compromising on the quality of work and the
costs involved. A technique helping them achieve this is network analysis,
It is a technique for sequencing problems interested in minimizing the total
time required to complete the project, as well as minimizing the overall project
costs. It is particularly suitable for projects which are not routine or repetitive,
and which are conducted only once or a few times. For example, construction
of building, dams, research and development, marketing of new products,
building a ship, construction of factories, missile production, etc.
Modern management uses two forms of network analysis or techniques in
most scheduling projects as sequencing models:

Critical Path Method (CPM) and

Programme Evaluation and Review Technique (PERT)
Both these are planning techniques and tools of management control that
can meet multiple demands of the modern business. These are by far the most
popular techniques used in the world today.
History of PERT and CPM The development of PERT began i in the US
navy around 1958 when the navy was faced with the task of production of
Polaris Missile system under severe time constraints. The major challenge
was the timeframe and the cost performance of the project. It took a longer
time period to complete and cost a lot more than was estimated. A research
team was assembled to tackle the problem and that in effect resulted in the
development of PERT.
Critical Path Method (CPM), on the other hand, was the result of an industrial
effort which was jointly initiated by DuPont Company and Remington Rand
Univac. The objective of the CPM research team was to determine how best
to reduce the time required to perform routine plant overhead, maintenance,
and construction work. In essence, they were interested in determining the
optimum tradeoff of the project duration and the total project cost.
 Project Management 221

PERT/CPM (Planning and Control Tools) PERT/CPM are widely accepted

network tools for planning and controlling all the events and activiies im
a
complex and dynamic project or programme. A project is a combination or
various activities. For
example, construction of a fast food restaurant invoives
a
series of activitiessuch as searching for a site, purchasing land, construction
of the building, floor planning for fast food as well as kitchen,
procurement o
equipment, etc. Similarly, a banquet function would comprise many activities.
In planning and
scheduling the activities of large sized projects, PERI and
used most to plan and
CPM are
commonly. They enable the management
implement a project, and to achieve the desired goals of timely completion
with optimum use of available human, material, and financial resources.

In PERT and CPM the milestones are represented as events. Event or

node is either the beginning of an activity orits conclusion.Activity consumes

various resources such as time, money, materials, etc. When all activiies
and events in a project are connected logically and sequentially, they form
a network, which is the basic record in network management. In network
records, events or nodes are denoted by numerals such as 1, 2, 3, etc. while
activities are denoted by alphabets such as A, B, G etc.
Difference between PERT and CPM Although PERT and CPM are both
planning tools meant for keeping a project on track, there are some basic
differences between the two. PERT is event oriented and CPM is activity oriented.
This is to say that while discussing a project as per PERT network, we say
and so on. Or event 2 occurs after event 1, 5
activity 1-2, activity 2-3,
Occurs after event 3, and so on. However, while discussing CPM network, we
event
In
sayactivity A follows activity B, activity C follows activity B, and so on.

PERT network, it is easy to write a network diagram, because successor and

predecessor event relationships can easily be identified.

PERT activities are probabilistic in nature. The time required to complete
a

involved
PERT activity cannot be specified accurately because of uncertainties
the activity times
while carrying out the activity. PERT network is used when
are probabilistic; hence three time
estimations are considered: optimistic time,

most likely time and pessimistic time.

shortest possible time estimate of an
Optimistic time estimate This is the
that everything will go right for the
activity and is based upon the premise
earliest completion of the activity.

Pessimistic time estimate It is the longest possible time estimate of an

in
the premise that there are chances of interruptions
activity and is based on

the completion of the activity.

 222 Hotel Facility Planning
Most likely time This estimate has the
is the feeling of the highest probability of occurrence.e. t
project manager.
From these three time estimates
and termed as expected time of the
a
weighted mean or average is calculate
CPM does not take into account the activity.
for an activity. The time
uncertainties in the estimation of ti
required deterministic; only one time is considero
is
as
activity time or duration is related to cost. By decreasing the activity dura
tion, direct cost can be increased
(crashing activity
of duration is
possible), In
PERT, as there is no of
certainty time, activity duration cannot be
Hence, cost cannot be reduced
expressed correctly. So we can
say that expected cost of
completion of activity (crashing of activity duration) is not possible. Table 7.1
Summarizes the comparison between PERT and CPM network tools.

Table 7.1 A Brief

Comparison between PERT and CPM Network Tools
Key Words
PERT CPM
Devised by US Navy DuPont Company
Model Probabilistic model Deterministic model
Orientation Event oriented Activity oriented
Dummy activitiesUse of dummy activities required for Use of dummy activities is not
representing the proper sequencing required
Repetition Used for repetitive jobs Used for non-repetitive jobs
Purpose Mainly used for planning and scheduling Used for constructions and
research programmes business programmes
Control Used as an important control device Cannot be used as a control device

PERT/Cost Developed in 1962, PERT/cost is an extension of PERT for

planning. It has now added to the managerial effectiveness in planning/control.
PERT/cOst is a very usefultool for planning, monitoring, and controlling the
cost progress as well as time progress of a project. The combination of PERT/
time and PERT/cost can indicate the extent to which the managers have met
time schedules, cost estimates, and technical performance standards. If there
are shortfalls or the managers can re-plan and re-combine the
deviations,
resources to minimize costs and meet time schedule.

Advantages of PERT/CPM to Management The following are the advantages

of adapting PERT and CPM models while executing projects.

mathematical device. It is very simple. It

has
1. PERT is the least
It c o v e r s all the
considerable practical utility in project management.
of
phases management such as:
project
 (a) Project planning, Project Management 223
(b)Time and resource
(c) Basic scheduling, estimation,
(d) Time-cost tradeoffs,
(e) Resources
allocation,
Project control and
2. CPM and PERT force
cannot be made without managers to plan projects as
3. PERT is an excellent planning.
tool
time-event analysis
offers an effective for
tool for control. The critical path
acts as a means of management control. PERTmethod
cost control (CPM)
4. PERT cost system is also. cost tradeoft
5. PERT is also an useful as a tool for
methods effective means ofbudgetary control.
(CPM/PERT)
documenting the provide clear and
a communication. Network
and cost plans and schedules and unambiguous way o
performance
management.
of the
projects to the communicating the time
6. PERT can be used for
project team and
higher
understand, and it can be projects of any size.
It is
7.
PERT7CPM methods, if easily sold to the users. simple, easy to
encourage team spirit and properly developed by the
build project
projects within the required time project team, can
confidence in
itiescan aid in span. The clear completing
delineation
Lower allocating responsibility to achieve
of activ-
management is motivated the project
execution. as
people are involvedobjectives.
in
Limitations of CPM/PERT project
CPM assumes that
there is a certain
In real life the
2. CPM does assumed time intervaltime for the activity performance.
not offer statistical may not be realized.
time. analysis in determination of estimates of
3. CPM is a
static
Any change in the planning model and not a
4. PERT is not network leads to dynamic controlling device.
suitable for routine repetition of the entire
evaluation.
5. PERT
emphasizes only planning recurrent events.
on time and
or
6. PERT is not a not on costs.
forces complete system cure for all devices. For
of
planning, it does not do
effective control, but it planning. It creates an instance,
it
cannot
provide
automatic control.
environment for
Note: 1.
Budgeting primarily directed towards
is
traditional device of control. control of cost. It is a
224 Hotel Facility Planning

system-oriented planning
and control de
2. PERT/CPM are
control of time, which are
are in evices.
addition
emphasize upon the
ad
They
to the usual control devices.
3. PERT/Cost is very useful in project management. It is
an
instrument of cost control.

DRAWING OF A NETwORK DIAGRAM

As discussed earlier, in PERT and CPM the milestones are represented as
events. Event or node is either the beginning of an activity or its conclusin
Activity is represented by means of an arrow, which iS resource consuming. The
usion.
resources could be time, money, materials, etc. Event does not consume
resource, but it signifies either the start or the end of an activity. In a network
any
diagram, an event is represented by a circle, rectangle, or a triangle. When
all activities and events in a project are connected, logically and sequentiallv
they form a network, which is the basic record in network management.

Basic Steps
The basic steps for drawing a network diagram are the following:

Listing List out all the activities involved in the project.

Arranging Once the activities are listed, they are
arranged in a
sequential
manner and logical order.

Estimation of time After arranging the activities in a logical sequence, their

time is estimated and written
against each activity. For example: foundation
digging, 7 days or a week

Beginning of activities Some of the activities do not have logical

in such cases, relationship;
they can be started simultaneously. For example, preparation of
food items and decoration of
mandap (stage for marriage rituals) for organizing
a
marriage function do not have a logical relationship, hence both of them
can be started
simultaneously. Here by logical it is meant that one activity is
not
dependent on the occurrence of the other activity.
Activity addition Activities are added to the network,
depending upon their
logical relationship towards completion of the project network.
Basic rules In network
are followed
drawing there are some basic conventions that
universally. These help in easy understanding of the network
drawing. Some of the points to be remembered while drawing the network
are as follows:
 Project Management 22.
(a here must be
only
shown in
Figure 7.1.
one beginning and one end for the networs

A
6 A
6

Right
Wrong
Figure 7.1
Writing the Network

bEventnumber should be written inside the circle or node

square/rectangle, etc.). Activity name must be represented(orbytriangl
capi
alphabetical letters and writen above the arrow. The time required t
the activity should be written below the arrow as in
Figure 7.2.
A

Figure 7.2 Numbering and Naming the Activities

(c) While writing the network, ensure that activities do not cross ea
other. Also, arcs or loops as in Figure 7.3 should not
join activities.
1

Wrong
Figure 7.3 Crossing of Activities Not Allowed
el Facility Planning
(d) While writing a network, looping should be avoided. This is to say that
the network arrows should move in one direction, that is start from the

towards the end, as in Figure 7.4.

beginning and move

Right
2

Wrong

Looping Not Allowed

Figure 7.4

When two activities start at the same event and end at the same
(e)
event, they should be shown by dummy activity as in
means of

7.5. Dummy activity isan activity, which simply shows the

Figure
c o n s u m e any resource. It should be
logical relationship and does not
represented by a dotted line as shown. In Figure 7.5, activities C and D
start at event 3 and end at event 4. C and D are shown in the full lines,

whereas dummy activity is shown in dotted line.

C
3 C
Dummy
D

Right
Wrong
Figure 7.5 Depiction of Dummy Activity

( When the event is written at the tail end of an arrow, it is known as tail
event. If event is written on the head side of the arrow, it is known as
head event. A tail event may have any number of arrows (activities
emerging from it. This is to say that an event may be a tail event to
any number of activities. Similarly, a head event may be a head event
for any number of activities. This means that several activities may
conclude at one event. This is shown in Figure 7.6.
 Project Management 227

Head event Tail event

Figure 7.6 Head Event and Tail Event

Time Estimation in PERT

There are three kinds of time estimates in
PERT, namely optimistic timne
pessimistic time, and
likely time.
Optimistic time It is represented by 'to'; here the estimator presumes
that everything goes on well and he or she will not come across any kind
of
uncertainties. Thus, the shortest possible time is estimated for project
completion.
Pessimistic time Itis represented by 'tf'. In this case, the estimator presumes
the worst case scenario that everything goes wrong. Expecting all sorts of
uncertainties to crop up, the longest possible duration is estimated for project
accomplishment.
Likely time It is represented by 't/'. In this case, the estimator expects that
he or she may come across some sort of uncertainties and many a time things
will go right.
Critical path The critical path is defined as the longest duration between the
first and the last nodes of a project. While tracing the path from the first node
to the last node, one should always move along the direction of the arrows.
The duration of a path is simply the sum of the duration of all activities on
the path.
Writing the CPM Network
The first step in writing the CPM network is to establish the logical
predecessor and successor-relationship between the various constituent
activities. That is, which activity is to be taken up after a specific task. Let us
see how it is done by means of the
following problem.
Illustration 1 Prepare a network diagram and identify
the critical path
of various tasks for a hotel project. Duration and predecessors are given in
Table 7.2.
228 Hotel Facility Planning

Duration and Predecessors

Table 7.2
Time (Days)
Required Predecessor (s)
Task
2
A
B
A
B

F C
G
D,E
H
3
F,G
I
1
H,I

do not require any predecessor

Solution As first three tasks A, B, and C
these to get started. Therefore
that is, no other tasks need to be completed for
these become the starting tasks of the project. Make a small circle to represen
the starting event or node of the project. Mark this node as 1. Then dra
three arrows starting from this node to represent the activities A, B, and C
Figure 7. 2(a)].

D1
2

A2 A2

B3 B3

C4 CA
Figure 7.2(a) Figure 7.2(b)

We show these along with the names of the three activities in the networ
diagram. Activity D needs A as its
preceding activity, which means that D ca
be started only when A Make a small circle at the end of the arro
gets over.
for activity A to
represent event 2, which marks the completion of activity A
Then draw an arrow from node 2 to
Table 7.2 shows that the represent activity D Figure 7.2(b)].
B gets completed in event 3.
predecessor for activities E and F is B. Activit
Therefore, draw two arrows from node 3 t-
represent activities E and F |Figure 7.2(c)].
 Project Management 229

D1
D1
A2
A2 E2
E2
1 B3
1 B3
3

C4 FS G7
Figure 7.2(c)
Figure 7.2(d)
Activity G can be started at event 4
ends at node 4
as its required predecessor is C, which
Activity H |Figure7.2(d).
Join arrows D and E to end
requires both D and E to be over before it starts. Therefore,
at a common node 5. From this new event 5, draw
an arrow to
both F and
represent activity H
[Figure 7.2(e)]. Similarly, activity I requires
G
to end before
it starts.
node 6. From this newTherefore, join arrows and G to end
at a common F
event 6, draw an arrow to
activity I |Figure 7.2(0.J. represent
ActivityJ requires both H and I to be over before its start.
arrows H and I to end at a common node 7. From this
Therefore, join
an arrow to new event 7, draw
represent activities H and I. From event 7, draw an arrow to
represent activityJ. Activity J ends at node 8, which becomes the last
the project |Figure7.2(g)). node of

D1
2 5 D1
5
H2 H2
A2
E2 A2
E2
B3 B3

F5
G7 13
G7
4 6

Figure 7.2.(e) Figure 7.2