6 PROJECT MANAGEMENT

PROGRAMME EVALUATION AND REVIEW

TECHNIQUE (PERT)
CRITICAL PATH METHOD (CPM)

INTRODUCTION

This chapter is extremely interesting and important for two reasons. One, it is very practical. Two, it is so
simple that it can be applied in our day-to-day life to plan our schedule, review our plans, monitor the progress,
and control the performance. Project managers of construction works or software assignments, for instance,
find these techniques immensely useful.

NETWORK ANALYSIS

Network analysis refers to a number of techniques for the planning and control of complex projects. The basis of
network planning is the representation of sequential relationships between activities by means of a network of
lines and circles. The idea is to link the various activities in such a way that the overall time spent on the
project is kept to a minimum. The optimum linking of the various stages is called the critical path. The chief
advantages of using networks are:

■ They provide a logical picture of the layout and sequence of a complex project
■ They help to identify the activities and events, which are critical to the entire project
. ■ They provide a basis for working out times, costs, and resources involved in the project
■ They act as a focus-point for action and coordination
■ They make an enormous contribution to the planning and, especially, the control of complex projects

The two most frequently used forms of network planning are: programme evaluation and review technique
(PERT) and critical path method (CPM).

EARLY TECHNIQUES OF PROJECT MANAGEMENT

Gantt's bar chart Before PERT and CPM were developed, Gantt charts and Milestone charts were used as
tools to monitor the project progress in complex projects. Gantt chart is a bar chart, which was developed by
Henry Gantt around 1900. The Gantt charts were used as early as World War I. It consists of two coordinate
axes, one represents the time elapsed and the other, jobs or activities performed. The jobs are represented in
the form of bars as shown in Figure 18.1.
 FIGURE 6.1 Gantt's bar chart
Now, let us work out another problem starting from drawing the network to determining the probability of
completing the project within a given time.
The above figure shows Job X, which contains five activities A, B, C, D, and E, taking different time
duration. Activity A is an independent activity followed by activity B, activity B is followed by activity C.
Activities D and E have no such sequence. Activities C, D, and E reach completion together. However, the
total number of days taken for completing the job is 14.

Inadequacies of bar charts The Gantt's bar chart is a simple method of presenting the number of activities
in a given job and their respective time duration. Yet, particularly, where the number of activities in the given
project is large and some of them are parallel activities, bar charts cannot be adequate in terms of presenting
the interdependencies, project progress, or uncertainties involved in the activities of the project. These
inadequacies are explained below:
Interdependencies among activities For example, if we are planning to manufacture a new product that
requires special tooling we would have to show that manufacturing activity (Task 2) was dependent upon
the procurement of the tooling (Task 1). We can do this by using tie-bars as shown in Figure 18.2.
However, this makes the chart confusing to understand when we have many dependent activities. The tasks
can be grouped together vertically so that they form blocks of similar tasks with a common output, thus,
reducing the complexity of the chart. Milestone chart takes care of this to some extent. Project progress
Bar charts cannot reflect the project progress. It is so, because they represent the time duration of the
activity. However, this problem can be overcome by modifying the Gantt's bar chart. Shade a part of the
bar representing each activity to indicate the extent of the progress made, as shown in Figure 18.3. Here for
activity A' it is assumed that work for two days is completed and another three days of work is still to be
completed. Unless A' is complete in all respects, 'B' cannot start and activity 'C' cannot start unless 'B' is
complete.
Reflecting the project uncertainties It is difficult to present bar charts reflecting the project uncertainties
in an accurate manner, particularly, in the modern context of space research programmes or other complex
 FIGURE 6.2 Tie-bars on Gantt charts

projects, which normally involve extensive research, development, and technological progress. Scheduling
in these complex projects needs a high degree of precision and exactness. In such a context, we cannot
forecast the completion of the various stages precisely. Sudden technological developments may change
the nature of the project and it may call for rescheduling the entire project. Such type of emergencies cannot
be handled through a bar chart.

Milestone chart Milestone chart is an improvement over Gantt chart. It has become a good link between
Gantt chart and the PERT/CPM network. Every task represented by a bar in Gantt's Bar chart, is subdivided
in terms of milestones. Each milestone is a key event or point in time.
In the Gantt chart, a bar (which represents a long-term job) is broken down into several pieces, each of
which stands for an identifiable major event. Each event is numbered and an explanatory table is given,
identifying the number with the event. These are specific events or points of time, which the management
identifies as important reference points during the completion of the project. The work breakdown increases
the awareness of the interdependencies between the tasks.

FIGURE 6.3 Modified Gantt's bar

chart
 FIGURE 6.4a Milestone chart

Figure 18.4a represents a corresponding milestone chart for Figure 18.1. Figure 18.4b reveals that each
bar representing an activity is divided into certain milestones. They are identified with a major event, and
consecutively, numbered. Such a breakdown enhances the awareness about the interdependencies among the
milestones. While the milestone chart is definitely an improvement over bar charts, it still fails to focus
effectively on the interdependencies among the events. Hence, network constitutes a natural extension of
milestone charts. This is shown in Figure 18.4b.

The emergence of PERT in network analysis A basic form of network analysis was being used in the UK
and USA during the 1950s to reduce project duration. In 1958, the US Naval Special Projects Office set up a
team to devise a technique to control the planning of complex projects. Thus, emerged the PERT network
technique. PERT was used to plan and control the development of the Polaris missile and in the process it
helped the team to save two years in missile development. The planning of the Polaris involved 23 networks
with 3000 activities. The contract awarding agencies asked the contractors to furnish PERT charts for better
coordination of the projects. Today, the World Bank and other international financial agencies insist that PERT
networks be enclosed to the proposals submitted to them for funding.

FIGURE 6.4b Milestone chart

Network analysis has undergone several changes and many variants* exist, which evaluate the randomness
due to imperfections in all human and physical systems. PERT and CPM continue to be very popular in
handling the basic factors like time, costs, resources, probabilities and combinations of all these factors.

PERT AND CPM: THE CONCEPTS

Programme evaluation and review technique is a tool to evaluate a given programme and review the progress
made in it from time to time. A programme is also called a project. A project is defined as a set of activities
with a specific goal occupying a specific period of time. It may be a small or big project, such as construction
of a college building, laying of a road, assembly of a PC, writing software for a given problem, or inauguration
of a factory building. PERT is concerned with estimating the time for different stages in such a programme or
a project and find out what the critical path is, that is, which consumes the maximum resources.
Critical path method assumes that the time required to complete an activity can be predicted fairly accurately,
and thus, the costs involved can be quantified once the critical path has been identified. Since time is an
important factor, CPM involves a trade-off between costs and time. It involves determining an optimum
duration for the project, that is, a minimum duration which involves the lowest overall costs.
A partial list of applications of PERT and CPM techniques in project management is given below:
■ Construction of projects such as buildings, highways, houses, or bridges
■ Preparation of bids and proposals for large projects such as multipurpose projects
■ Maintenance and planning of oil refineries, ship repairs, and other such large operations
■ Development of new weapon systems and new products and services
■ Manufacture and assembly of large items such as aeroplanes or ships
■ Simple projects such as home re-modelling, house keeping or.painting, and so on

PERT versus CPM The differences between PERT and CPM are summarised below:

PERT CPM

(a) It is event-oriented. It is activity-oriented.

(b) It is based on three time estimates: (i) optimistic It is deterministic. Here, time estimates are based
(ii) most likely (iii) pessimistic. on past data.
When there are considerable uncertainties about
the project's activity times, a probability analysis
gives valuable information. PERT is a technique
for evaluating the probability of completing the
project. Hence, it is probabilistic.
(c) Time, in PERT, is not related to costs. Hence, it Here, time is related to costs. It can be advanta-
is more applied where pressure on the end re- geously applied where there is a need to complete
suits- is meaningless, as in the case of R&D, or the projects within a given deadline.
defence.

(d) PERT terminology includes network diagram, CPM terminology involves arrow diagram, nodes,
event, slack, and so on. and float.
(e) It assumes that all the resources (men, money, It is more realistic. It considers the constraints on
materials, and machines) are available as and the resources. It provides information about the
when required. ^ implications of crashing the duration of the net-
work and the consequent additional costs.

PERT: BASIC NETWORK TERMINOLOGY

Activity This is a task or job of work, which takes time and resources. For example, digging for excavation,
verifying the creditors in the purchase ledger, providing electrical connections, and others. An activity is
represented by an arrow like this:
The head of the arrow indicates where the task ends and the tail where the task begins. The arrow points from
left to right but is not drawn to scale. It is essentially used to establish:

■ the activities involved in the project

■ their logical relationship, for example, the activity of providing electrical connection must take place
after the activity of building the wall
■ an estimate of the time, which the activity is expected to take

Event This is a point in time and indicates the start or finish/end of an activity or activities, for example,
building wall completed, excavation/digging completed, electrical connections started. An event is represented
in a network by a circle or node as follows:

The event from which an arrow comes out is called the predecessor event and it is denoted by event i. The
event into which the arrow gets in is called the successor event. It is denoted by event j. The arrow connecting
these two events is called activity ij. This is shown in the following figure:

The examples for an event include start of a milling machine, stop of a milling machine, start of an
examination, end of an examination, and so on. These are illustrated as below:

The working of the milling machine is an activity ab.

PROJECT

FIGURE 6.5 An example of a network

Dummy activity This is an activity drawn to show clear and logical dependencies between activities so as
not to violate the rules for drawing networks. It does not consume resources. It is represented by a dotted
arrow as follows:

Network This is the combination of activities, dummy activities, and events in a logical sequence, according
to the rules for drawing networks. Thus, a small network might appear as in Figure 18.5 above. In the above
network, the events are represented by A, B, C, D, E, and F. The activities are represented by the numerals 1, 2,
3, 4, 5, 6, and 7.
A is the start event and F is the end event. The following are the different paths to reach the end event:

A-B-C-F; A-B-D-F; A-B-E-F; A-B-D-E-F; A-B-C-E-F

The events C and E, and D and E are connected by dummy activities. The dummy activities indicate the
logical sequence. Unless D is complete, E cannot start. And unless C is complete, E cannot start. In other
words, E can start only when C and D are completed.

RULES FOR DRAWING NETWORK

The following are logic-based rules and should be carefully observed while drawing a network:
(a) A complete network should have only one point of entry (a start) event and only one point of exit (an
end event).
(b) Every activity must have one preceding or tail event and one succeeding or head event. Note that many
activities may use the same tail event and many may use the head event. Figure 18.5a illustrates this
rule.
(c) No activity can start until its tail event is reached.
(d) An event is not complete until all activities leading into it are complete.
(e) All the activities must be tied into the network, that is, they must contribute to the progression. In
other words, none of the events should be left untied into the network. Events left untied to the overall
network are called danglers. Event D is a dangler as shown in Figure 6.5b.
To avoid a danglor, connect it to the end event as shown in Figure 6.5c.

FIGURE 6.5a Head and tail

events

FIGURE 6.5b Dangler

FIGURE 6.5c Dangler to be avoided FIGURE 6.6a Wrong (Undesirable network: A case
of arrows crossing each other)

FIGURE 6.6b Corrected network

 FIGURE 6.7 Arrow cannot go backward

(f) It is better if arrows do not cross each other. Wherever it is possible, crossing of arrows should be
avoided. The network given in Figure 18.6a is not desirable. It is because arrows are intersecting each
other. This can be avoided as shown in Figure 6.6b.
(g) An arrow should always be straight, not curved, and head from left to right.
(h) The length of the arrow should be uniform. However, the length of the arrow has nothing to do with
the time duration of the activity, (i) Loop network
should be avoided. (j) Arrow cannot go backward as
shown in Fig. 6.7.
(k) Use dummies only when it is required. The use of dummy activities is to be minimised in the network.
However, logical sequence can be explained better by the use of dummy activity as illustrated below:
Figure 18.8a shows that event E follows event C and event F follows event D. This logic can better be
explained by Figure 18.8b.

Another example for dummy activity

This is a case of two independent activities taking place simultaneously. For instance, forecasting unit sales
(p) and surveying competitive pricing (q) are two independent activities. How will these be represented in a
network? Figure 6.9a is obviously wrong, because not more than one activity can connect two events.

FIGURE 6.8a Wrong FIGURE 6.8b Right (Use dummy activity)

324 MANAGEMENT SCIENCE

FIGURE 6.9a Wrong FIGURE 6.9b Right

A dummy can solve the problem here as shown in Figure 18.9b. Here, activity p and activity q can take
place simultaneously. Unless event B is completed (in other words, activity p is completed) event C cannot
be said to be complete. B-C is a dummy activity.

Logical sequence Logical sequence is the heart of network analysis. From a logical sequence, we can draw
a network. Also, if a network is given, the logical sequence can be identified. See Figure 6.10.
Event B follows A.
Events C, E, and D are parallel, and start from event B.
Unless events C and D are complete, E cannot start. In other words, events C and D restrict the occurrence
of E.
Event F follows events C, D, and E.
Before drawing the network, check whether the data relates to activities or events. Then proceed to draw the
network.

Numbering the network Events have to be progressively numbered from left to right. Simple networks may
have events numbered in simple numerical progression, that is, 1, 2, 3, and so on, but larger networks may
be numbered in multiples of tens, that is, 10, 20, 30, and so on. This enables additional activities to be
inserted subsequently without affecting the numbering sequence of the whole project. Consider the network
in Figure 6.11b.
Now, let us number the network given in Figure 6.1 la.
The direction of the arrow is the guide to number the events. Events 2 and 3 can be marked as 3 and 2 also,
respectively. The dummy activity (4-6) does not bear any name.

FIGURE 6.10 Logical sequence for

network
 FIGURE 6.11a Network based on
logical relationships

APPLICATION OF NETWORK TECHNIQUES TO ENGINEERING PROBLEMS

What is an engineering problem?
An engineering problem may pertain to design, development, production, maintenance, or service of a
particular product. To illustrate, it means any of the following:

■ Designing a prototype
■ Planning a production facility
■ Assembly of spare parts
■ Maintenance of a production or service establishment
■ Trouble-shooting
■ Development of software
■ Construction management
■ Research and development
■ Optimisation of resources, including men, materials, money, and machines

This list is only illustrative and inclusive. For all these problems, the underlying factor is logical sequence.
Network techniques can be advantageously applied to all these areas. Let us see some of the specific
examples:

FIGURE 6.11b Numbering the

events
EXAMPLE 6.1 You want to join a multinational organisation immediately after your graduation. This
project of securing a decent and lucrative appointment in the campus interview involves the following
activities and the logical sequence is given below. Draw a network.

Activity and its description Preceding activity

A (apply for the advertisement) -

B (prepare for interview) -
C (receive interview call letter) A
D (collect information about the company) A
E (attend mock interview with your placement officer) B
F (attend interview on the given date) C, D
G (you decide to join the company, in case you get selected) D
H (your placement officer tells you that your answers to the questions in D, E
the mock interview are very good)
I (great! you are selected in the campus interview!) F, G, H

SOLUTION You can notice from Figure 18.12 that activity H follows activities D and E through a dummy
activity and regular activity respectively. Similar is the case with F, preceded by C and D.

FIGURE 6.12 Network for

campus selection

EXAMPLE 6.2 (A case of heat

exchanger)
The following are the activities and the time duration pertaining to assembly and testing of a heat exchanger:

Activity (ij) Activity description Time duration (weeks)

1-2 Remove internals 2

1-4 Install external wiring 3
2-4 Install internal wiring 2
3-4 Install thermocouples 4
2-3 Construct supports 3
2-5 Install heaters 2
3-5 Install new tubes 4
5-6 Leak test 2
4-6 Check and calibrate 2
6-7 Insulate 1
7-8 Test at temperature 1
SOLUTION Figure 18.13 shows the network with the arrows representing the time duration (in weeks):

FIGURE 6.13 Network for heat

exchanger

EXAMPLE 6.3 The following are the major activities identified in the process of development of a
prototype and its installation:

Activity (ij) Activity description Labour hours

Analysis:
1,2 Initial consultation 6
2-3 Full analysis Design 14
and development
3-4 Initial design sketch 7
4-5 Create prototype 25
5-6 Final product development 20
Implementation
4-8 Develop system documentation 10
5-7 Develop training material 6
7-8 Installation 4

SOLUTION Figure 6.14 presents the network for the new product development and installation. It can be
noted that the given list of activities does not refer'to the activity 6-7. It is a dummy activity shown to
indicate the logical sequence.

FIGURE 6.14 Network for new

product development and installation
EXAMPLE 6.4 Andhra Pradesh Infotech and Engineering Consultancy (APITEC) Ltd., received a request
to survey a specified area of a city to determine if the area would support a proposed shopping centre. APITEC
has accordingly decided to initiate a data-gathering pilot study. Identify the activities (and their logical
relationships) to be carried out in this project. Draw an appropriate network.

SOLUTION The following is the list of activities to be carried out to survey the given area in the city. The
logical sequence is also identified as given below:

Activity Code Predecessor activity

Define study A —
Establish procedures B A
Design/prepare questionnaires C B
Hire/organise staff D A
Train the staff E C,D
Select sample sites F CD
Assign sample sites to staff G F
Conduct pilot study H E,G

Based on this, the following network can be drawn and numbered as shown in Figure 6.15.

FIGURE 6.15 Network for carrying

out pilot study

Time estimates in PERT PERT network is based on three time estimates, that is, optimistic time estimate,
most-likely time estimate, and pessimistic time estimate.

Optimistic time estimate This is denoted by t0. It refers to the minimum time the activity takes, assuming
that there will not be any hindrances, such as delay, setbacks, and so on, in its completion.

Pessimistic time estimate This is denoted by tp. This is the maximum possible time it could take to complete
the job. If everything goes wrong, and abnormal conditions prevail, how much time would it take to complete
the job? Obviously it would be the maximum time. Barring the major disturbances such as labour strike, and
others, all other setbacks or delays are considered here.

Most-likely time estimate This is denoted by tm or ti. This is the time estimate, which lies in between the
optimistic and pessimistic time estimates. Assuming that there could be some disturbances in the completion
of the activity, how much time would it take to complete the activity? The time, thus, taken is called the
most-likely time estimate.
Now, the next question is, which time estimate is to be considered in PERT? An average of these will be
considered. In PERT, it is the beta distribution that provides meaningful results for most of the activities. It is
 FIGURE 6.16 Three time estimates and beta
distribution

different from the normal distribution curve and

has a shape as shown in Figure 18.16. In order to make use of its general characteristics, in the theoretical
curve, as outlined in Figure 18.16, point A is to coincide with the optimistic time estimate {t0) and point B is
to coincide with the pessimistic time estimate (tp).

Average time estimate (te) According to beta distribution, the average of the three time estimates is equal to
the aggregate of one-sixth of the optimistic, two-thirds of the most likely, and one-sixth of the pessimistic
time estimates. In other words, the average time estimate (te) is calculated as below:

This equation is very significant in PERT analysis.

EXAMPLE 6.5 If an activity is likely to take 20 minutes of optimistic time, 30 minutes of most-likely time,
and 40 minutes of the pessimistic time estimate, what is the average time estimate?

SOLUTION Let us use-the above formula and find out the average time estimate for this activity.

The average time estimate for the given activity is 30 minutes. In other words, if the most-likely time
estimate is equidistant (in terms of time) from the optimistic and pessimistic time estimates, the most-likely
time estimate itself will become the average time estimate.

t
 Range, standard deviation, and variance In beta distribution, the range is equal to the difference
between the pessimistic time estimate (tp) and the optimistic time estimate (t0). In other words, Range = (tp -
t„)
The standard deviation (a) is equal to approximately one-sixth of the range, that is,

The variance is equal to a2, which means

The variance is a measure of dispersion. It depends upon the range. Hence, the larger the variance, the greater
will be the uncertainty. This can be further explained by an example.

EXAMPLE 6.6 Let us consider three time estimates from two athletes A and B. They give us the time
estimates to finish a distance of, say, 400 metres. Can we say which athlete is more reliable? The following
are the time estimates (in minutes) given by A and B.
to tm tp

Estimate by A 8 12 18
Estimate by B 10 11 14

Now calculate variances for A and B.

A has a variance of 2.77 and B has a variance of 0.44. The lesser the variance, the more is the reliability.
Hence, the time estimate given by B is more reliable and certain. In other words, we cannot rely upon A's
time estimate.

Utility of average time estimate The average time estimate concept is very important in PERT. It is the basis
for determining the duration of a given project. Further, it forms the basis to determine the critical path of a
given project

Critical path: Critical path is that path which consumes the maximum amount of time or resources. It is
that path which has zero slack. Slack means the time taken to delay a particular event without affecting the
project completion time. If a path has zero slack that means it is the critical path. Slackis the difference
between the latest allowable occurrence time (71) and the earliest expected time (7>). Now, let us study the
concepts of TE and TL.
Earliest expected time (TE) It refers to the time when an event can be expected to be completed at the
earliest. It is computed by adding f/s of the activity paths leading to that event. It is started with the start event
and worked out for all other events. That is why, it is called forward pass.
Where there is more than one path leading to a particular event, consider the maximum value of the Zjg.'s. In
other words, the rule can be stated as below:

TE (successor event) = maximum value of {TE (predecessor event) + te (activity)}

Or

TEJ = maximum (7£, + tetj)

where subscript j refers to successor event, / refers to the predecessor event, ij refers to the activity.

EXAMPLE 6.7 Given the following network and activity duration, calculate the earliest expected time for
all the events in the network.

FIGURE 6.17 Computation of the

earliest expected time

In Figure 18.17, the numbers shown on the arrows are the average expected times (te) for each activity.
For the starting event, TE is zero. At event 2, TE — 0 + 7 = 7; for event 3, TE = 0 + 3 = 3. Like this, compute
for the whole network. At event 4 and 5, there is more than one path. In such a case, take the maximum of
the TE values, as shown below:
 At event 4,

Paths TE Value

1-2-4 11
1-4 5
1-3-4 3

The maximum of the TE values should be considered. The maximum value is 11.
Similarly at event 5,

Paths TE Value

1-2-5 15
1-2-4-5 18
1-3-4-5 10
1-3-5 9

The maximum of these values is 18. Hence TE for event 5 is 18. Latest allowable occurrence time It is
the latest time by which an event must occur to keep the project on schedule. If not, the project gets delayed.
It is denoted by TL. This can be explained by considering a deadline to complete a given project. Consider
that a period of_20 days is the scheduled completion time (Ts) for a given project. This time refers to the
maximum time by which the last event should occur.
Where Ts value is not available, TE for the end event becomes the Ti for the end event. We start from the
end event and work out latest allowable occurrence time to all other events. That is why it is called the
backward pass.
In other words, where, Ts is given, it becomes the Ti for the end event. Ti for the predecessor event (7/,,)
is calculated by deducting the average time estimate for the activity (tejj) from the 7), value of the successor
event (TLj). Where there is more than one path, consider the minimum value of TL. The same rule can be
stated as:
TL (predecessor event) = minimum of {Ti(successor event) — te) or
Tu = minimum of (TLJ — teij) where subscript j refers to the successor event, i refers to the predecessor
event, and ij refers to the activity. Let us take the above example to work out 71. Computation of TL is the next
logical step after determining TE ■

EXAMPLE 6.8 Calculate TL for example 6.7.

You can notice that the TL = Ts for the end event. TL for event five is 20 and TE is 18. In other words, the
difference between these time estimates is 2 days. This is called slack. The formula used to determine slack
is: slack = (TL - TE)
Slack refers to the time for which the event can be comfortably delayed without affecting the project
completion time. It is the allowable delay for an event without causing delay of the project completion. It is
a measure of flexibility.
Usually, different events show up different values of slack. We are concerned with only that path along
which the events show up zero or minimum slack. That path, which contains all the events with zero or
minimum slack is called critical path. Critical path consumes the largest amount of resources. Hence, greater
care has to be taken to see that the work is completed along the critical path as per TL .
 FIGURE 6.8 Computation of the latest
allowable occurrence time

While calculating the TL, the minimum number of days is to be taken. This point is explained below.

Paths TL Value At Event One

5-4-1
5-3-1 10
5-2-1 %

The minimum of these is 2. Hence, it is the TL value for event 1.

Critical path The next step is to identify the critical path. Critical path is such a path, the completion of
which is very critical for the timely completion of the project. The path, which has zero or minimum slack
(7/, — TE) is called the critical path.
Consider the network shown in Figure 18.18. The different paths leading to the end event along with their
length or duration in days are shown below:

Path Path let igth (in days)

1-2-5 15
1-2-4-5 18
1-4-5 12
1-3-5 9
1-3-4-5 9

Of all these paths, the longest path having a uniform slack of 2 days is 1-2-4-5. So, this is the critical path.
The critical path is highlighted in Figure 18.18a.
A network may have any number of critical paths. The longest one is called the main critical path and the
others are called sub-critical paths.
Based on the above network and TE and TL calculations, answer for yourself the following questions:
(a) Does it make any difference if activity 1-3 takes 5 days instead of 3 days? Does the critical path get
affected?
(b) How many days 3-5 activity should take to get into the critical path?
 FIGURE 6.18a Network showing critical
path

FLOAT
Need for Float in CPM Network
The whole network becomes critical if all resources are fully utilised. Though it is a desirable situation that
there are no idle resources, it is always better to have some idle resources as a safety measure. This represents
some degree of flexibility in a project. Otherwise, it may result in a state of crisis that can be avoided or taken
care of if there had been some float.
Float is calculated for activities. Float represents underutilised resources. It also shows the degree of
flexibility available for starting a given activity. A critical path in a network is that path which has least float.
Float may be total float, independent float, free float or negative float.

Significance of Different Types of Float

Suppose there are critical and non-critical activities in a network. If the effort on a non-critical activity is to
be reduced, it may result in increase in its duration time. At the same time, when these efforts are
released/concentrated on some other critical activity, then, independent float can be used and this does not
call for any replanning of any other activities. Free float can be used without affecting subsequent activities.
Total float may affect both preceding and succeeding activities. Negative float indicates the reduction in the
duration of time required to meet the given target date.
Total float Total float indicates the time by which an activity can expand. When total float is absorbed at
the planning stage, the floats in both preceding and succeeding activities can be reduced. Subtract the earliest
time for the preceding event TEi from the latest time for the succeeding event TLj , and from this difference
subtract the duration time tei-j. Total float is the latest start date of activity minus earliest start date of activi-
ty and it may be negative. Total float = [(TLJ - T^) - teH] For instance, in Fig. 18.18b tfie total float for activity
4-5 is worked as given below:
Latest date, succeeding event 9 days
Less: earliest date, preceding event 5 days
4 days
less 4-5 activity duration 4 days

i.e., there is no time by which the 4-5 activity can expand.

 FIGURE 6.18b Network showing
TE and TL time estimate

Independent float Independent float refers to the time by which an activity can expand without affecting
any other preceding or succeeding activity. It is the earliest date of succeeding event T£ minus latest date of
preceding event TLi minus activity duration tei_j. Independent float = [(TEJ - TLl) - teiJ\. For instance, in Fig.
18.18b the independent float for activity 4-5 is worked as given below:
Earliest date, succeeding event 9 days 5
Less: Latest date, preceding event days
4 days 4
less 4-5 activity duration days
0

i.e., there is no time by which the activity 4-5 can expand without affecting any other preceding or succeeding
activites.

Free float Free float refers to the time by which an activity can exapand without affecting succeeding
activities. If some critical activity needs more resources, then the operation of such activities could be halted
for the period of free float, and more attention should be paid towards the critical activity. For instance, in
Fig. 18.18b, the free float for activity 4-5 is worked as given below:
Earliest date, succeeding event 9 days
Less: earliest date, preceding event 5 days

Free float 4 days

If the free float is 4 days, the activity could be delayed by 2 days, if necessary.
Negative float Compare the overall project time with a target or scheduled time if it is necessary to
complete the project as per the scheduled time. The latest allowable occurrence time for the last event is made
equal to the scheduled completion time (Ts). The float is worked out based on Ts.
If the Ts is greater than the total project time, then all activities will have positive float. Conversely, if Ts
is less than the total project time, most of the activities including critical activities, will have negative float.

Probability of completing the project within the given time Given the scheduled completion time, what
is the probability of completing the project within this time? This is the next logical question.
We use the concepts of range, standard deviation, and variance. The following are the steps involved in
determining the probability.

(a) Find out the range of the pessimistic and optimistic time estimates of those activities covered by the
critical path (tp — t0). Other activities are not important because they cannot any more influence the
critical path.
(b) Determine standard deviation a for each activity.
(c) Determine variance (cr)2.
(d) Find out the sum of the variances of the project J^ a2 = o\a\x + ... cr".
(e) Determine the square root of the sum of the variances. This gives standard deviation for the entire
network, o = JJ2 cr2 + CT22 + ... + o%
(f) Divide the slack (the difference between the scheduled completion time and the latest allowable
occurrence time) by the standard deviation for the entire network. By applying the principles of
normal distribution, we get:

Thus, we get the value of the normal deviate. (This is not the probability of completion.) This should
be within a range of ±3cr limits.
(g) To arrive at the percentage of probability of completing the project within the given time, the value of
the normal deviate has to be converted into the value of probability by using the table of normal
distribution function table. Thus, the probability of completing the project is determined. An extract
of normal distribution function table is furnished in Table 18.1.

It may be noted that the probability of not completing the project within a given time is (100 - Percentage
of probability for completing the project). In other words, if the normal deviate is +1 -OCT, the corresponding
percentage of probability is 84.1 per cent. Here, normal deviate is + means, it is the case of completing the
project. It means that the probability of not completing the project within the given time is 15.9 per cent
(i.e., 100-84.1).
 TABLE 6.1 Normal Distribution Function Table
Normal deviate (Z) Probability (%) Normal deviate (Z) Probability (%)

0 50.0 -0 50.0
0.2 57.9 -0.2 42.1
0.4 65.5 -0.4 34.5
0.6 72.6 -0.6 27.4
0.8 78.8 -0.8 21.2
1,2 84J -1.0 „- 15.9
88.5 1.2 11.5
1.4 91.9 -1.4 8.1
L6 94Ji, -1.6 - 5.5
1.8 96.4' 1.8 3.6
2.0 97.7 -2.0 ^ 2.3
2.2 98.6 -2.2 1.4
2.4 99.2 -2.4 0.8
2.6 99.5 -2.6 0.5
2.8 99.7 -2.8 0.3
3.0 99.9 -3.0 0.1

EXAMPLE 6.9 The following list of activities relates to a new factory construction. The logical sequence
and duration of each activity are given below. Draw the PERT network and identify the critical path. Also,
determine the ptobability of completing this project within a scheduled completion time of 60 days.

Time Estimates
*o 'w 'p
Activity code Activity Preceding activities (in days)

A Demand forecast — 6-8-14

B Product development — 6-9-12
C Capital procurement — 12-15-18
D Production planning A 2-3-4
E Product design B 5-6-7
F Deciding about plant D,E 11-13-15
G Profit planning D,E 1-2-3
H Materials acquisition C,G 4-5-6
I Recruitment of operators G• 4-5-6
J Production design G 2-3-4
K Acquiring manufacturing facilities C,J 7-10-13
L Training the operators I 4-5-6
M Plant layout F,K 7-8-9
N Manufacture H, L, M 8-14-20
SOLUTION

Stage I: Drawing of network and numbering the events (Fig. 18.19a)

FIGURE 6.19a Network for new factory construction

Stagell: Determining the average time estimate (Fig. 18.19b)

FIGURE 6.19b Network with average time estimates (Numbers by the side of arrow indicate TE
values for the activity)
Stage III: Calculation of TE, TL and identification of the critical path (Fig. 6.19c)

FIGURE 18.19c Network with critical path

The scheduled completion time is 60 days. This becomes the Ti for event 12. Thus, the above network reveals
a slack of —3 at event 12. The path that maintains the same slack throughout is 1-3-4-5-6-8-10-11-12. Hence,
this is the critical path.

Stage IV: Determining the probability of completing the project within the given time

Activity Time Estimates

B 6-9-12
E 5-6-7

F 11-13-17

J 2-3-4

K 7-10-13

M 7-8-9

N 8-14-20

Standard deviation for the entire network

Normal deviate

From the normal distribution function table, it can be noticed that the value of the normal deviate of 1.1 lies
in between the probability of 84.1 per cent and 88.5 per cent as shown below:

Normal deviate (Z) Probability

1.0 84.1.
1.2 88.5

For a normal deviate of 1.1 the approximate probability value could be average of this, which amounts to
84.8 per cent.
In other words, the percentage of probability of completing the project within the given time is 84.8. {This
means automatically that the percentage of not completing the project within the given time is 15.2%, i.e.,
(100-84.8)}

PROJECT COSTS AND TIME

The costs associated with any project can be classified into two categories: (a) Direct costs and (b) Indirect
costs.
Direct costs are those, which are directly proportional to the number of activities involved in the project.
The more the number of activities, the more is the direct cost. Activity-wise costs are identified in terms
of manpower and machine requirements.
For example, if a software development project takes 10 days for four system analysts and 30 programmers,
the direct cost, in this case, involves the salaries paid for this staff for 10 days. In case the project has to
be completed within six days, more staff have to be recruited at different levels or the present staff have to
work at two shifts, and more system analysts have to be employed, and thereby, the direct costs increase

FIGURE 6.1 Direct cost varies with time

steeply. Time factor plays a vital role in determining the quantum of direct costs. This is illustrated in
Figure 6.1. Direct costs in normal time are lower than those in crash time.
Indirect costs are those costs that are determined per day. Some of the examples for indirect costs are
 supervisory personnel salaries, supplies, rent, interest on borrowings, advertisement, depreciation, other
fixed charges such as bonus to the staff, and so forth. The firm has to spend these irrespective of its level of
business. These costs are directly proportional to the number of days of the duration of the project. If the
project duration is reduced, the indirect costs also come down. Indirect costs per day are fixed. However, this
assumption holds good only in the short run. In the long run, all costs are variable. Figure 6.2 explains the
nature of fixed costs. The more the number of days in the project duration, the more is the total indirect cost.
In the above example of the software development project taking 10 days, the indirect costs work out to
Rs 3,00,000 if the indirect costs per day amount to Rs 30,000. Where the project is to be completed
within six days by pumping in additional inputs in terms of staff and systems, the indirect costs will come
down to Rs 1,80,000 (= 6 x Rs 30,000 per day).

FIGURE 6-2 Indirect costs increase with the

number of days in the project

Normal cost is the cost that is incurred if the project is allowed to take its normal duration of time,
considering the most efficient utilization of the resources.
Crash cost is the cost incurred to reduce activity duration to its minimum. The firm has to spend more if it
intends to reduce the normal duration of an activity, and thereby, the project duration. In all, the crash
costs would be more than the normal costs because of the extra wages, overtime, or extra costs spent to
provide facilities to reduce the normal duration of the activity.
Normal time is the time required for a project to be completed at normal cost under normal circumstances.
Crash time is the possible time to which the duration of the project could be reduced by pumping additional
resources. There may be economic benefits in completing the project ahead of schedule. For instance, a new
product may capture a larger share of the market if it is introduced earlier than the competitor's product.
Since the crash time involves spending of additional resources, every project manager will trade-off between
the costs and time. It is carefully observed how far it is feasible to crash the duration of the project.
Cost Slope is the amount that has to be spent over and above the normal direct cost for reducing the
duration by one unit of time (day, week etc.). Cost slope is defined as the additional cost for reducing one
unit of time, assuming a given rate of increase in direct cost with a decrease in one unit of time. In other
words, it represents the additional direct cost required for reducing the duration by one unit of time.

Here, it is assumed that the relationship between direct cost and time is a straight line. If it is not a straight line,
there could be more than one cost slope. The relationship between the direct cost and time, as a falling straight
line AB, is shown by a dashed line in Figure 19.3. The relationship between time and cost of an activity is
formulated as:
FIGURE 6.3 Linear relationship between time and cost of an activity—the dashed line indicates linear
approximation
Cost slope is a very useful factor to determine, which of the activities has to be crashed in a sequence. Only
such activities underlying the critical path, that is, the critical activities, need to be crashed. It is because the
other non-critical activities have no influence on the critical path.

keep this extra expenditure at a minimum. As such, the decision to crash or expedite should be taken for
only those activities, which would involve minimum extra cost. Further, these activities should be crashed to
such an extent that the corresponding values of the cost slopes would fulfil the criteria of minimum extra
cost.
From Figure 6.4 it can be observed that the direct costs (A) decrease with an increase in time. As the
project duration increases, the indirect costs (B) increase. The total cost (A + B) curve is a flat U-shaped
curve, which implies that only up to a particular point (O) the crashing is economical, not beyond.

FIGURE 6.4 Optimum cost and optimum

duration
 The time duration, which involves the least total cost is the optimum duration at optimum cost.
Crashing the duration of a project may not be possible beyond a particular point. In some cases, there
could be scope to further crash the duration but it may not be economical. If time is not a constraint, it is not a
prudent decision to crash beyond a particular optimal point. On the other hand, where time is a constraint, the
project manager does not bother about the costs. The project has to be completed within that time at any cost!

EXAMPLE 6.1 Crashing the activities under critical path to reduce the project duration
Identify critical path for the following network. Show how far the project can be crashed.

Also, show the extent of increase in normal costs with every stage of crashing.

Activity Preceding Time (in weeks) Cost (Rs)

activity
Normal Crash Normal Crash

A AA 6 4 5,000 6,200
B B,C 4 2 3,000 3,900
C 7 6 6,500 6,800
D 3 2 4,000 4,500
E 5 3 8,500 10,000

Here, it is assumed that normal costs include overheads.

SOLUTION Let us draw a network as shown in Figure 6.5a for the above relationships:

FIGURE 6.5a Network showing

the critical path
This shows the critical path as 1-2-3-4. The total duration of the critical path is 18 days. The normal cost is
Rs 27,000. Let us work out the cost slope for all the activities to ascertain the priority for crashing.

Time (in weeks) Cost (Rs)

Preceding Normal Crash Cost Slope and
Norma Crash
Activity activity priority Remarks
A(l-2) ~ 6 4 5,000 6,200 600 (11)
B(l-3) - 4 2 3,000 3,900 450* not under CP
C(2-3) A 7 6 6,500 6,800 300 (I)
D(2-4) A 3 2 4,000 4,500 500 not under CP
E(3-4) B,C 5 3 8,500 10,000 750 (III)

To start with, let us crash activity 2-3 as shown in Figure 6.5(b)

FIGURE 6.5b Network with activ-

ity 2-3 crashed by one day

Stage I: Crash activity 2-3 by one day

Now the duration is 17 days. There is no change in the critical path. The normal cost now is Rs 27,000 + Rs
300 = Rs 27,300. To reduce the duration further, we can crash activity 1-2, which costs Rs 600 per day as
shown in Figure 19.5c.

FIGURE 6.5c Network showing

activity 1-2 crashed by two days

Stage II: Crashing activity 1-2 by two

days
Now, the duration is 15 days. There is no
change in the critical path. The normal cost
is Rs 27,300 +
Rs 1,200 = Rs 28,500. To reduce the
duration further, we can crash activity 3-4,
which costs Rs 750 per day,
as shown in Figure 6.5d.
Stage III: Crashing of activity 3-4 by 2
days
Now, the duration is 13 days. There is no
change in the critical path. The normal cost
is Rs 28,500 +
Rs 1,500 = Rs 30,000. Since all the
activities under the critical path are crashed
to their possible crash
duration, there is no scope for further
crashing.

FIGURE 6.5d Network showing activity

3-4 crashed by two days
Thus, the project duration at every stage of crashing and the increase in normal costs can be summarised as
below:

Project Duration Normal Costs (Rs)

18 days 27,000
17 days 27,300
15 days 28;500
13 days 30,000

The project manager can decide whether to crash or not considering the incremental increase in the normal
costs.

EXAMPLE 6.2 Changes in critical path with each stage of crashing

From the following particulars,
(a) draw the network
(b) calculate the earliest expected time; latest allowable occurrence time, and identify the critical path
(c) determine the cost slope
(d) prepare a statement showing the different stages of crashing and the corresponding cost estimates,
assuming that the project has a fixed overhead cost of Rs 600 per day
(e) find out the optimum duration and cost for the project
(f)

Normal time Normal Crash time Crash cost

Jobs (in days) cost (Rs) (in days) (Rs)
1-2 3 10,000 2 11,000
1-3 6 6,000 3 8,400
2-3 9 9,000 3 12,000
2-4 7 5,000 4 7,800
3-4 3 3,000 2 3,400

FIGURE 6.6a Network showing logical relationships

SOLUTION
(a) Network for the given job: see Figure 6.6a.
(b) Determining the earliest expected time (7>_) latest allowable occurrence time (7/,), and critical path.
Here, the slack is zero (Ti_ — TE = 0 for the end event). All events show zero slack, and hence, all the
events fall under the critical path. The critical path is always is the longest. So, the critical path is 1-2-3-
4.
(c) Determining the cost slope and the priority of crashing.

Normal time Crash time Normal cost Crash cost Cost slope Priority of
Jobs (days) (days) (Rs) (Rs) (per day) crashing*
1-2 3 2 10,000 11,000 1000 V
1-3 6 3 6,000 8,400 800 IV
>2-3 9 3 9,000 12,000 500 II
2-4 7 4 5,000 7,800 700 III.
^3-4 3 2 3,000 Rs33, 000 3,400 400 I
Total =

Total cost of the project = Direct cost -f- Indirect cost

= Rs 33,000 + (15 days x Rs 600 per day) = Rs
33,000 + Rs 9,000 = Rs 42,000

Stage I: Crashing job 3-4 by one day

All the events have zero slack again. This shows that there is no change in the critical path. So the critical path
continues to be 1-2-3-4. However, the total cost changes. The direct cost increases the additional crashing
cost for job 3-4, that is, Rs 400.

.
.

FIGURE 6.6b Network showing the

critical path and normal duration

The cost slope indicates that it is the 3-4 job

that can be crashed first. Job 3-4 can be crashed by only one day. Let us crash this job first, as shown in
Figure 6.6c.
FIGURE 6.6c Network showing
crashing of job 3-4

Total cost calculation at Stage I

Total cost of the project =

Direct cost + Indirect cost
=
(Rs
33,
000
+
Rs
400) + (14 days x Rs 600 per day) = Rs 33,400 + Rs
8,400 = Rs 41,800

Stage 11(a): Crashing job 2-3 by 6 days

Now the total duration of the project comes down to 10 days. It has come down by only four days. In other
words, though job 2-3 can be crashed by six days, the benefit on the total duration is limited to only four days.
Hence, crash job 2-3 by four days only. As such, the network in Figure.6.6d will change to Figure 6.6e.

FIGURE 6.6d Network showing

crashing of job 2-3

There is scope to further crash job 2-3. This can be crashed by six days. This is shown in Figure 6.6d in stage
IKa).
Stage 11(b): Crashing job 2-3 by 4 days
This shows that all jobs come under the critical path. Let us see the different paths and their respective duration
to find out how many critical paths we have at this stage:

Duratio
Path n (in
days)
 1-2-4 10
1-2-3-W 10
1-3-4 8

Since the paths 1-2-4 and 1-2-3-4 have equal duration, both of these become critical paths.
Now, find the jobs underlying these paths and identify the jobs available for further crashing

Path Jobs Comments

1-2-4 1-2; Available for crashing

2-4 • Available for crashing
1-2-3-4 1-2 Available for crashing
2-3 Already crashed
3-4 Already crashed

For further crashing, consider jobs 1-2 and 2-4. As per the cost slope considerations, it is cheaper to crash job
2-4. Hence, in the normal course, 2-4 should be considered for crashing at this stage. But since both paths
1-2-4 and 1-2-3-4 are equally critical, crashing of job 2-4 will reduce the duration of 1-2-4 only. It does not
reduce the duration of the other critical path 1-2-3-4. Thus, crashing of 2-4 will not be of any use. However,
we can consider crashing of the other job 1-2, which is common to both these paths. Crashing of job 1-2 is
shown in Figure 6.6e in stage III.

Total cost calculation at stage II

Total cost of the project = Direct cost + Indirect cost

The direct cost increases by the additional crashing cost of job 2-3, that is, 2,000

= (Rs 33,400 + Rs 2,000) + (10 days x Rs 600 per day) =

Rs 35,400 + Rs 6,000 = Rs 41,400

FIGURE 6.6e Network showing

crashing of job 2-3 by four days only
Stage III: Crashing of job 1-2 by one day
Total cost calculation at stage III
Total cost of the project = Direct cost + Indirect cost
The direct cost increases by the additional crashing cost of job 1-2, that is, 1000.

= (Rs 3j\400 + Rs 1,000) + (9 days x Rs 600 per day) =

Rs 36,400 + Rs 5,400 = Rs 41,800

At the end of stage III, the following are the paths and their respective duration:

FIGURE 6.6f Network showing crashing

of job 1-2 by one day
Thus, both the paths 1-2-3-4 and 1-2-4 continue to be critical (as these have equal duration). And all the jobs
underlying these paths have already been crashed to their minimum duration. There is no scope for further
crashing.
(d) Let us make a statement of duration of the project at different stages of crashing and the corresponding
costs. This is necessary to identify the optimum duration and optimum cost.
Jobs Days Project Direct cost Indirect cost Total cost
crashed saved duration (Rs) (Rs 600 per day) (Rs)
None 0 15 33,000 9,000 42,000-
3-4 1 14 33,400 8,400 41,800
2-3 4 10 35,400 6,000 41,400
1-2 1 9 36,400 5,400 41,800

(e) The above table reveals that the project duration of 10 days costs the least, that is, Rs 41,400. This is the
optimum duration and the optimum cost. Unless there is strong reason such as availing of any incentive
more than the cost of crashing; the visit of a dignitary such as the Chief Minister, Vice Chancellor,
and others, further crashing is not advisable. This implies that there is scope to crash further by one
day. However, the project cannot be crashed beyond nine days.

EXAMPLE 6.3 Crashing two activities simultaneously

Identify the critical path for the following network. Determine the incremental increase in the normal cost
for each stage of crashing. Here, normal cost includes overheads.

Time (in days)

Preceding Normal Cost
Activity Acivity Normal Crash cost (Rs) Slope (Rs)
A(l-2) — 10 6 50,000 1500
B(2-3) A 21 14 10,000 700
C(2-4) A 8 6 15,000 2500
D(4-5) C 15 12 20,000 1000

SOLUTION Let us first identify the critical path as outlined in Figure 6.7a.

FIGURE 6.7a Network showing the

critical path

The critical path in the above network is 1-2-4-5. The normal duration of the project is 33 days. The normal
cost is Rs 95,000.

]
 TABLE 6.1 Cost slope priorities
Time (in i days)
Preceding Normal Cost Priority of
Activity Acivity Normal Crash cost (Rs) Slope (Rs) crashing
A(l-2) — 10 6 50,000 1500 11
B(2-3) A 21 14 10,000 700
€(2-4) A 8 6 15,000 2500 III
D(4-5) C 15 12 20,000 1000 I

The crashing sequence can be determined on the basis of the cost slope. Table 6.1, showing cost slope
priorities reveals that among activities 1-2, 2-4, and 4-5, activity 4-5 can be crashed first. It is so because it
costs the least. This has been shown in Figure 6.7b in stage I.

Stage I: Crash activity 4-5 by three days

FIGURE 6.7b Network showing

activity 4-5 crashed by three days
Here, the critical path changes to 1-2-3-5. However, the project duration comes down to 31 days. The normal
cost increases to Rs 97,000. The increase is by Rs 2,000 at Rs 1000 per each day saved. Though activity 4-5
may be crashed by three days, the project duration gets reduced by two days only. With crashing activity 4-5
by two days, Figure 6.7b will change to Figure 19.7c.

Stage I (a): Crashing of activity 4-5 by two days only

FIGURE 6.7c Network showing ac-

tivity 4-5 crashed by two days only

Crashing of activity 4-5 by two days results in two critical paths: 1-2-3-5 and 1-2-4-5, both with 31 days.
This means both paths are equally critical. Of the activities underlying these paths, activity 4-5 has already
been crashed. Now crashing of either of the activities 2-3 or 2-4 does not help in reducing the duration of
both the critical paths. So, activity 1-2 is the next alternative that will benefit both the critical paths.

Stage II: Crashing of activity 1-2 by four days

At stage II, activity 1-2 can be crashed by 4 days, as shown in Figure 6.7d.

FIGURE 6.7d Network showing ac-

tivity 1-2 crashed by four days

Crashing of activity 1-2 by four days reveals two critical paths, 1-2-3-5 and 1-2-4-5, with 27 days of project
duration. At this stage, the activities available for crashing now are 2-3 and 2-4. These should be crashed
together because crashing either of the activities individually will not help in reducing the project duration.
Stage III: Crashing of activities 2-3 and 2-4 together
At stage III, the activities of 2-3 and 2-4 are crashed together, as shown in Figure 6.7e.

FIGURE 6.7e Network showing crashing

of activities 2-3 and 2-4 together

Since the project duration is reduced only

by two days, crashing 2-3 by seven days is not advisable. As it can be seen, at event 3, there is a slack of
five days (Tg = 20; TL = 25). Why should we have a slack of five days at event 3 by crashing 2-3 activity by
seven days? This results in unnecessary increase in costs. So, the best alternative would be restricting crashing
of activity 2-3 to two days only. Hence, activity 2-3 can be advantageously crashed by two days. Thus, the
slack at event 3 will be zero.

Stage III (a): Crashing of activity 2-3 by two days only

By crashing the activity 2-3 by two days only, the network in Figure 6.7e will change to that shown in Figure
6.7f. •

FIGURE 6.7f Network showing ac-

tivity 2-3 crashed by two days only

The critical paths continue to be the

same as 1-2-3-5 and 1-2-4-5 with path lengths of 25 days each. Since all the activities underlying both these
paths are already crashed, there is no scope for further crashing. Table 6.2 outlines the calculation of the total
normal cost at every stage of crashing.
 TABLE 6.2 Calculation of total normal cost for the project
Stage of crashing® Project duration Total normal cost (Rs)

With no crashing Stage I 33 days 95,000

(activity 4-5) Stage II (activity 1- 31 days (95,000 + 2000) = 97,000 (97,000
2) 27 days + 6000*) = 103,000 *(4 x 1500 =
Stage III (activities 2-3 and 2-4) 25 days 6000) (103,000 + 6,400*)=
109,400 Activity 2-3: (700 x 2 =
1400) Activity 2-4: (2500 x 2 =
5000) *(1400 +5000 = 6400)

8
Each stage of crashing includes the earlier stages of crashing, if any. For example, stage 3 crashing includes
stage 2 crashing.

Gaps in Project Management

The Project manager has to guard himself against the following likely gaps in Project Management:
I. Quite often, the customer needs are not stated effectively. 1.
Customer needs, most often, are not understood correctly.
3. At times, customer needs are not translated into projects effectively.
4. Project plans are not effectively executed.
5. Project management team is not empowered in an appropriate manner and not made a
party to the decision making.

Why do projects get delayed?

Project management is more than effective coordination of various resources such as men, mate-
rials, and infrastructure for the execution of the project as per the plan. This is brought out by the
following two examples.
■ To project manager, in a production organisation, gathers information on the details of each
and every task from the concerned departments. For instance, the standard time particulars of
a particular task are available from the industrial engineer. Similarly, the data on the availabil-
ity of materials is available from the materials manager. The project manager should coordi-
nate the tasks considering the availability of the materials in time and the tasks are executed
within the standard time. If there is a delay in any of these tasks, the project also gets delayed.
■ In a particular road-bridge construction project, the following were some of the causes
identified for the project delay:
I. Delay in finalising the bridge structural designs
1. Delay in acquiring the land or public litigation
3. Delay in release of funds
4. Differences with the contractors and so on.
Computers in Project Management There are various comprehensive and sophisticated software
packages available to address the needs of the project manager in the following ways:

■ Network for any complex projects can easily be drawn fast.

■ Gantt bar charts can be displayed by merely entering the data.
■ The possible schedule dates for completion can be worked out for the given network.
■ The activities can be sorted out by listing of the activities with dates or by departments.
■ The requirements of resources for each department or site can be assessed and allocated as per the needs.
■ The calculations pertaining to normal cost and crash cost can be worked out easily for any given number
of activities.
■ PERT calculations, such as the average time estimate, earliest expected time, latest allowable occurrence
time, variance, standard deviation, normal deviate, and others, can be worked out.

How can we minimize the gaps in the project management?

The following are some of the strategies to minimize and bridge the gaps in project management.
1. Establish a close interaction between the customer and the project team to clearly define
the project requirements.
2. Identify the primary and secondary objectives of the project. Achieving the primary objectives
is essential and achievement of secondary objectives is desirable.
3. Never lose the sight of project objectives.
4. Encourage and ensure adequate communication between project team and top management.
5. Discuss proactively and evaluate decisions concerning time and tradeoffs.
6. Ensure that the infrastructural inputs, support, and necessary funds are made available in
time as per the project plan.
7. Adhere to the time, cost, and quality performance.
8. Establish an effective project review mechanism wherein the customer representatives and
the project team, who are empowered with appropriate authority, can participate.
9. Periodically review the project progress, identify/diagnose the problems and develop re-
medial measures. Involve the project team and the customer in this process, wherever
necessary.
10. The project objectives are to be reviewed periodically so that they can be met effectively.
I I. Encourage the project team members to express their opinions freely during the review
meetings.
12. Evaluate all deviations from the project plan, however small they are, before they get
compounded.
I 3. Continue to get visible commitment of the top management.
14. Update the PERT chart as the project progresses, whenever required.
15. Be sensitive to environmental threats and respond to them in a proactive manner.