Chapter 6: Project Management

Project Planning - Network Analysis

Introduction
A project consists of interrelated activities which are to be executed in certain
order before the entire task is completed.
The activities are inter related in a logical sequence which is known as
precedence relationship.
Project is represented in the form of network for the purpose of analytical
treatment to get solutions scheduling and controlling its activities.
Projects may be extremely large and complex such as construction of housing,
a high way, a shopping complex etc.
It is required that managers must have a dynamic planning and scheduling
system to produce the best possible results and also to react immediately to
the changing conditions and make necessary changes in the plan and
schedule.
Fortunately, two closely related operation research techniques, PERT(Program
Evaluation and Review Technique) and CPM (Critical Path Method),
are available to assist the project managers in carrying out these
responsibilities.
Network and Basic Components
A network is a graphic representation of a project’s operations.
It is composed of activities and events that must be completed to reach the end
objective of a project, showing the planning sequence of their
accomplishments, their dependence and interrelationships.
Activity: Any individual operation, which utilizes resources and has a
beginning and an end. An arrow is used to depict an activity with its head
indicating the direction of progress in the project.
Event: An event represent the start ( beginning) or completion (end) of
some activity and as such it consumes no time.

i j
Starting Activity Completion
event event
Categories of activities
The activities can be further classified into the following four categories:

Predecessor Activity: An activity which must be completed before one or

more other activities start.
Successor activity: An activity which started immediately after one or
more of other activities are completed.
Concurrent: Activity which can be accomplished concurrently is known
as concurrent activity. An activity can be predecessor or successor to an
event or it may be concurrent with the one or more of the other activities.
Dummy activity: An activity which does not consume either any resource
and time. A dummy activity is depicted by dotted line in the network.
Categories of event

The events can be further classified into three categories:

a) Merge Event: When two or more activities come from an event.
b) Burst Event: When more than one activity leaves an event.
c) Merge & Burst Event: An activity may be merged and burst at the same
time.
Categories of event …
Network and Basic Components
Rules of Network Construction
1. Each activity is represented by one and only one arrow
2. Nodes are numbered to identify an activity uniquely. Tail node (starting point)
should be lower than the head node ( end point) of an activity
3. The network should have a unique starting node (tail event) and unique
ending node
4. No two activities should have the same starting node and the same ending
node
5. Arrows should be kept straight and not curved or bent.
The logical sequence of activities
The logical sequence (or inter-relationship) between activities must follow the
following rules:

An event cannot occur until all the incoming activities into it have been
completed;
An activity cannot start unless all the preceding activities on which it depends,
have been completed;

Dummy activities should only be introduced if absolutely necessary.

The logical sequence of activities
Example 1
Consider the project given in table below and construct a net
work diagram:
Example 2

The following is the precedence relationships of the activities in a project

network.Draw the project network diagram.
Example 3
The following is the precedence relationships of the activities in a project
network. Draw the project network diagram.
Example 4
The following is the precedence relationships of the activities in a project
network. Draw the project network diagram.

D
I
A

B
H K
E

C F

J
G
Example 5
The following is the precedence relationships of the activities in a project
network. Draw the project network diagram.

B
E
A
G

C
F
Example 6
Critical Path Analysis
Critical path of a project is the largest path in the network.
The objective of critical path analysis is to estimate the total project duration
and to assign starting and finishing times to all activities involved in the
project.

Critical path analysis produces the following information:

1.Total duration needed for the completion of the project.
2.Categorization of the activities of the project as
being critical or non-critical.
An activity in a network diagram is said to be critical, if the
delay in its start will further delay the project completion
time.
A non-critical activity allows some scheduling slack, so that
the start time of the activity may be advanced or delayed
within limits without affecting the completion date of the
entire project.
Finding Critical Path (CPM)
In order to find critical path, there are two phases:

i. Determine the Earliest Start time ES (The time by which a portion of a

project must end) of all the nodes. This is called Forward Pass
ii. Determine the Latest Completion time LC (Earliest possible time at which
an activity can start) of all the nodes. This is called Backward Pass.
 Forward Pass Calculation

The method may be summarized as follows:

1. Set ES1 = 0. i.e. ES for starting node is always zero.

2. Use the following formula for the remaining nodes

ESj = max(ESi + tij)

Where: i is starting activity and j is ending activity, and t i j is the

duration of activity (i ,j )
Backward pass calculation
The method may be summarized as follows:

1. Set LCn = ESn

2. Use the following formula for the remaining nodes

LCi = min(LCj − tij)

Where: i is starting activity and j is ending activity, and tij is the duration of
activity (i ,j )
After computing ES and LC there are 3 conditions for critical path:

1. ESi = LCi
2. ESj = LCj
3. ESj − ESi = LCj − LCi = tij
Total Float and Free Float
Total Float is the amount of time that the completion of an activity
can be delayed without affecting the project completion time.
Formula:
𝑻𝑭𝒊𝒋 = 𝑳𝑪𝒋 − 𝑬𝑺𝒊 − 𝒕𝒊𝒋

Free Float is the amount of time that an activity completion time can be
delayed without affecting the earliest start time of immediate successor
activities in the network.

Formula:
𝑭𝑭𝒊𝒋 = 𝑬𝑺𝒋 − 𝑬𝑺𝒊 − 𝒕𝒊𝒋

Note: Any critical activity will have zero total float and zero free float.
Independent Float
Independent Float is the extra time available to complete the activity
when activity starts at 𝑬𝑺 of the preceding event and completed by 𝑬𝑺 of its
succeeding event.
Formula:
𝑰𝑭𝒊𝒋 = 𝑬𝑺𝒋 − 𝑳𝑪𝒊 − 𝒕𝒊𝒋
Example 1
A project consists of a set of tasks labeled A through G with the following diagram. The
time (in days) of completion of each task are given in parenthesis, example the
completion time for task A is 5 days, and is denoted as A(5).
Solution
Exercise
Consider the project that involves the following activities

Find the critical path

Project Evaluation and Review Technique (PERT)
The network method discussed so far may be termed as deterministic, since estimated
activity times are assumed to be known with certainty. While this assumption holds for the
CPM analysis, in most of the projects, these activity times are random variables.

A new technique known as Project Evaluation and Review Technique

(PERT) was developed in such situations.
The main objective of the analysis through PERT is to find out the completion
for a particular event within specified date.
PERT ….

In this approach, three-time values are estimated with each activity:

1. Optimistic time,
2. Most likely time, and
3. Pessimistic time.

The three time values provide a measure of uncertainty associated with that
activity.
Time estimates in PERT
1.Optimistic time is the shortest possible time in which the activity can be
finished and assumes that everything goes very well. In other words, it is the
estimate of the minimum possible time, which an activity takes to complete
under ideal conditions i.e. no provision are made for breakdown, delays etc.
They are generally denoted by ( t 0 ) or (𝒂).
2.Most likely time is the estimate of the normal time the activity would
take. This assumes normal delays. It is denoted by ( t m ) or (𝒎).
3.Pessimistic time is the longest time, the activity could take if everything
goes wrong. In other words, it is the longest time the activity can conceivably
take. This is generally denoted by ( t p ) or (𝒃).
Graphical presentation of Time estimates in PERT
Assumptions in PERT
1. Activity times are statistically independent and usually associated with beta
distribution.
2. There are enough activities involved in the network and totals of activity times
based on their means and variances will be normally distributed.

3. The three estimates of the activity duration can be obtained for each activity.
Steps in PERT
The various steps involved in the PERT network for analyzing any project are
summarized below:

i. Develop a list of activities involved in the project including the immediate

predecessors.
ii. Draw the network diagram using the rules and conventions as discussed
before.

iii. Number the events in ascending order from left to right

iv. From the three time estimates compute the expected time (te) for each
activity using the formula:
to + 4tm + tp
te =
6
vii. Using the value for tp(𝑏) and to (𝑎), calculate the variance by using the
formula:

𝟐
𝟐
𝒕𝒑 − 𝒕𝒐
𝝈 =
𝟔

viii. Use te as the time estimate and find the critical path.

Note that the variance of the project equals the sum of variances
of activities on the critical path.
ix. Compute the probability of meeting a specified date by using the standard
normal distribution.
Example
 Example - Solution
The expected task time and variances of different activities are compounded
by the following formulas:
𝟐
to + 4tm + tp 𝟐
𝒕𝒑 − 𝒕𝒐
and 𝝈 =
te =
6 𝟔
a. By applying these formulas, values for 𝒕𝒆 and 𝝈𝟐 are given in following
table:
Example – Solution…
Example – Solution…
Example – Solution…
 Exercise
The following table gives the estimates of optimistic time (t0), most likely time (tm) and
pessimistic time (tp) of different activities of a project.

Activity t0 tm tp
1-2 4 8 12
2-3 1 4 7
3-4 8 12 16
3-5 3 5 7
4-5 0 0 0
4-6 3 6 9
5-7 3 6 9
5-8 4 8 6
6-10 0 6 8
7-9 4 8 12
8-9 2 5 8
9-10 4 10 16
Exercise …
From the data in the table above (previous slide) answer the following:
i. Construct the network diagram when it is given that scheduled completion is
40 days.
ii. Calculate the probability of finishing the project
a) Within the scheduled time
b) Less than 45days
c) Less than 38 days.
Comparison between PERT and CPM
• Both PERT and CPM techniques were developed independently
with different set of objectives.
• Basic differences between the two are given below:
Comparison between PERT and CPM …
THANK YOU!!!!