Project Management

Gantt Chart / Network Analysis (CPM / PERT)

Lecture 1

Project Management

A project is a well defined task which has a definable beginning and a definable end and requires
one or more resources for the completion of its constituent activities, which are interrelated and
which must be accomplished to achieve the objectives of the project. Project management is
evolved to coordinate and control all project activities in an efficient and cost effective manner.
The salient features of a project are:

 A project has identifiable beginning and end points.

 Each project can be broken down into a number of identifiable activities which will
consume time and other resources during their completion.
 A project is scheduled to be completed by a target date.
 A project is usually large and complex and has many interrelated activities.
 The execution of the project activities is always subjected to some uncertainties and risks.

Network Techniques

The network techniques of project management have developed in an evolutionary way in many
years. Up to the end of 18th century, the decision making in general and project management in
particular was intuitive and depended primarily on managerial capabilities, experience, judgment
and academic background of the managers. It was only in the early of 1900's that the pioneers of
scientific management, started developing the scientific management techniques. The forerunner
to network techniques, the Gantt chart was developed, during world war I, by Henry L Gantt, for
the purpose of production scheduling. An example of Gantt chart is shown in Figure 1. The Gantt
chart was later modified to bar chart ( Figure 2 ), which was used as an important tool in both the
project and production scheduling. The bar charts, then developed into milestone charts ( Figure 3
), and next into network techniques (such as CPM and PERT).

Figure1: Gantt Chart

 Figure 2: Bar Chart

Figure 3: Mile Stone Chart

Network Construction

A network is the graphical representation of the project activities arranged in a logical sequence
and depicting all the interrelationships among them. A network consists of activities and events.

Activity

An activity is a physically identifiable part of a project, which consumes both time and resources.
Activity is represented by an arrow in a network diagram ( Figure 4 ). The head of an arrow
represents the start of activity and the tail of arrow represents its end. Activity description and its
estimated completion time are written along the arrow. An activity in the network can be
represented by a number of ways: (i) by numbers of its head and tail events (i.e. 10-20 etc.), and
(ii) by a letter code (i.e. A, B etc.). All those activities, which must be completed before the start of
activity under consideration, are called its predecessor activities. All those activities, which have to
follow the activity under consideration, are called its successor activities ( Figure 5 ). An activity,
which is used to maintain the pre-defined precedence relationship only during the construction of
the project network, is called a dummy activity. Dummy activity is represented by a dotted arrow
and does not consume any time and resource ( Figure 6 ). An unbroken chain of activities between
any two events is called a path.

Figure 4: Activity

Figure 5: Activity Precedence

Activity Immediate Predecessor

A _
B A
C A
D B
E C
Activity Immediate Successor
A B,C
B D
C E
 Figure 6: Dummy Activity

Event

An event represents the accomplishment of some task. In a network diagram, beginning and
ending of an activity are represented as events. Each event is represented as a node in a network
diagram. An event does not consume any time or resource. Each network diagram starts with an
initial event and ends at a terminal event. Each node is represented by a circle ( Figure 7) and
numbered by using the Fulkerson's Rule. Following steps are involved in the numbering of the
nodes:

 The initial event, which has all outgoing arrows and no incoming arrow, is numbered as 1.
 Delete all the arrows coming out from the node just numbered (i.e. 1). This step will create
some more nodes (at least one) into initial events. Number these events in ascending order
(i.e. 2, 3 etc.).
 Continue the process until the final or terminal node which has all arrows coming in, with
no arrow going out, is numbered.

An illustration of Fulkerson's Rule of numbering the events is shown in Figure 8 . As a

recommendation it must be noted that most of the projects are liable for modifications, and hence
there should be a scope of adding more events and numbering them without causing any
inconsistency in the network. This is achieved by skipping the numbers (i.e. 10, 20, 30…).

Figure 7: Event Representation

Figure 8: Fulkerson's Rule

Rules for drawing network diagram

Rule 1: Each activity is represented by one and only one arrow in the network.

Rule 2: No two activities can be identified by the same end events ( Figure 9 ).

Rule 3: Precedence relationships among all activities must always be maintained.

Rule 4: Dummy activities can be used to maintain precedence relationships only when actually
required. Their use should be minimized in the network diagram ( Figure 10 ).

Rule 5: Looping among the activities must be avoided( Figure11 ).

Figure 9: Network Preparation

Figure 10: Use of Dummy Activites

Figure 11: Looping Problem

CPM and PERT

The CPM (critical path method) system of networking is used, when the activity time estimates
are deterministic in nature. For each activity, a single value of time, required for its execution, is
estimated. Time estimates can easily be converted into cost data in this technique. CPM is an
activity oriented technique.

The PERT (Programme Evaluation and Review Technique) technique is used, when activity time
estimates are stochastic in nature. For each activity, three values of time (optimistic, most likely,
pessimistic) are estimated. Optimistic time (to) estimate is the shortest possible time required for
the completion of activity. Most likely time (tm) estimate is the time required for the completion of
activity under normal circumstances. Pessimistic time (tp) estimate is the longest possible time
required for the completion of activity. In PERT β-distribution is used to represent these three time
estimates (Figure 12). As PERT activities are full of uncertainties, times estimates can not easily
be converted in to cost data. PERT is an event oriented technique. In PERT expected time of an
activity is determined by using the below given formula:

The variance of an activity can be calculated as:

Figure 12: Time distribution curve

 Lecture 2

Basic Difference between PERT and CPM

PERT
1. In PERT analysis, a weighted average of the expected completion time of each activity is
calculated given three time estimates of its completion. These time estimates are derived
from probability distribution of completion times of an activity.
2. In PERT analysis, emphasis is given on the completion of a task rather than the activities
required to be performed to complete a task. Thus, PERT is also called an event-oriented
technique.
3. PERT is used for one time projects that involve activities of non-repetitive nature (i.e.
activities that may never have been performed before), where completion times are
uncertain.
4. PERT helps in identifying critical areas in a project so that necessary adjustments can be
made to meet the scheduled completion date of the project.

CPM
1. In CPM, the completion time of each activity is known with certainty that too unique.
2. CPM analysis explicitly estimates the cost of the project in addition to the completion time.
Thus, this technique is suitable for establishing a trade-off for optimum balancing between
schedule time and cost of the project.
3. CPM is used for completing projects that involve activities of repetitive nature.

Calculation of Time Estimates in CPM

In the project network given in figure below, activities and their durations are specified at the
activities. Find the critical path and the project duration.
Calculations in Network Analysis

The following calculations are required in network analysis in order to prepare a schedule of the
project.

a. Total completion time of the project

b. Earliest time when each activity can start (i.e. earlist start time)
c. Earliest time when each activity can finish (i.e. earlist finished time)
d. Latest time when each activity can be started without delaying the project (i.e. latest start time)
e. Latest time when each activity can be finished without delaying the project (i.e. latest finish time)
f. Float on each activity (i.e. time by which the completion of an activity can be delayed without
delaying the project)
g. Critical activity and critical path

The symbols used in the calculations are shown in table below.

Symbol Description

Ei Earliest occurance time of event i

Lj Latest allowable occurance time of event j

tEi-j Estimated completion time of activity (i,j)

(EST)ij Earliest starting time of activity (i,j)

(EFT)ij Earliest finishing time of activity (i,j)

(LST)ij Latest starting time of activity (i,j)

 (LFT)ij Latest finishing time of activity (i,j)

The computations are made in following steps.

(a) Forward Pass Computations :

(b) Backward Pass Computations :

(c) Calculation of Slack:

Event slack is defined as the difference between the latest event and earlist event times.

Slack for head event = Lj - Ej

Slack for tail event = Li - Ei

The calculations for the above taken example network are summarised below in the table.

Predecessor S(i)
Successor i-j
Event i Event j
tE (EST)ij (EFT)ij (LST)ij (LFT)ij
Slack
5 10 7 7 0 7 0
0
5 15 12 12 7 19 -
0
5 20 17 17 5 22 -
0
10 20 15 7 22 7 22 0

10 25 9 7 16 21 30 -

15 30 11 12 23 19 30 7

20 25 5 22 27 25 30 -

20 30 8 22 30 22 30 0

25 35 10 27 37 30 40 3

25 45 15 27 42 35 50 -
 30 35 10 30 40 30 40 0

30 40 8 30 38 35 43 -

35 45 10 40 50 40 50 0

40 45 7 38 45 43 50 5

(d) Determination of Critical Path:

The sequance of critical activities in a network is called the critical path. The activities with zero
slack of head event and zero slack for tail event, are called as crititcal activities. In the taken
network, the following activities are critical activities: 5 - 10, 10 - 20, 20 - 30, 30 - 35, 35 - 45.
Thus the critical path is A - E - G - K - M.
Critical path duration is 7 + 15 + 8 + 10 + 10 = 50.

Calculation of Expected Time and Variance of a Path in PERT

The Expected Time of a chain of activities in series, is the sum of their expected times. Similarly
the variance of the path, is the sum of variances of activities on the path. In Figure below, three
activities A,B and C are connected in series, (i.e. form a path). Their time estimates to-tm-tpare
given along the activity arrows. The expected time of the path 1-2-3-4 is calculated as:
As the length of the path ,that is the number of activies connected in series increases,the variance
of the path and hence the uncertainty of meeting the expected time also increases.

An Example

In the network of figure below, the PERT time estimates of the activities are written along the
activity arrows in the order to-tm-tp. Compute the expected time and variance for each activity.
Also compute the expected duration and standard deviation for the following paths of the network.

(a) 10-20-50-80-90

(b) 10-30-50-70-90

(c) 10-40-60-80-90

The computation of expected times and variances for different activities are carried in a table given
below.

Activity Time Estimates Expected Time Variance

i j to tm tp tE σ2
10 20 6 9 12 9.00 1.00
10 30 3 5 9 5.33 1.00
10 40 10 14 18 14.00 1.78
20 50 7 10 13 10.00 1.00
20 70 3 4 8 4.5 0.69
30 50 4 10 12 9.33 1.78
40 50 8 11 14 11.00 1.00
40 60 5 10 15 10.00 2.78
50 70 3 4 5 4.00 0.11
50 80 11 15 17 14.67 1.00
60 80 7 9 12 9.17 0.69
70 90 4 8 10 7.67 1.00
80 90 6 7 9 7.17 0.25