SWAMINARAYAN COLLEGE OF COMMERCE & MANAGEMENT

SARDARNAGAR, BHVANAGAR
SUBJECT: PROJECT MANAGEMENT CLASS: B.B.A SEM-V
UNIT-2: TIME SCHEDULING AND TECHNIQUES

Introduction
Time scheduling is a collection of techniques used to develop and present schedules that show when work will
be performed. The choice of tools and techniques used to develop a time schedule depends upon the level of
detail available about the work that needs to be done.

Where the work is well defined, modeling techniques can be used to show the sequence of working and
logical dependencies between each package of work. The resulting model can be used to predict start and
finish times, and identify where there is flexibility in the schedule. If requirements are clear but the means to
achieve them is less so, or where the requirements are subject to significant change as the work proceeds, then
modeling techniques are less appropriate.

1.1 Concept of Time Schedule

Creating a comprehensive schedule is one of the more difficult activities that project managers face. Schedule
creation is often considered more art than science, and results often support this. What is often more
frustrating is that team members often find themselves on one team with a project manager that creates and
manages schedules a particular way and on another team with a project manager with a different approach.

Scheduling in project management is the listing of activities, deliverables, and milestones within a project. A
schedule also usually includes the planned start and finish date, duration, and resources assigned to each
activity. Effective project scheduling is a critical component of successful time management.

1.1.1: Definition of Time Schedule:

➢ “Project scheduling is a mechanism to communicate what tasks need to get done and which
organizational resources will be allocated to complete those tasks in what timeframe.”
➢ “A schedule is a timetable showing the forecast start and finish dates for activities or events within a
project, programme or portfolio.”

1.1.2: Characteristics of Time Schedule:

1. It’s easily communicated. Those who are doing the work must understand what the schedule is all
about. If none of your team has ever seen a Critical Path Method Diagram (CPM), the last thing you
want to do is use a CPM as your scheduling method. In general, schedules that are in a graphic format
are most easily communicated.
2. It’s flexible. Schedules change. It’s a fact of project life. No matter what you say or do, a high
percentage of your schedules are going to change. Hopefully, these schedules will not change as a
result of mistakes that you make, but they will change, nonetheless.

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 3. It has the commitment of the project team. If you tell a team member that he or she must have a
task finished by Wednesday, that team member must agree to get it done and believe that the task can
be done under that time constraint. Otherwise, the team member won’t feel committed to the schedule
and may not feel compelled to meet it.
4. It shows interrelationships among tasks very clearly. Tasks are never done in isolation, and most
rely on information or results from a previous or concurrent task or group of tasks. Your schedule
must show how these tasks interrelate.
5. It’s prepared in calendar time, not in number of work days. To illustrate this point, try to
determine the date, within a day or two, that is 60 work days from today. Now, see how much easier it
is to determine the date that is 60 calendar days from today. Everyone thinks in terms of calendar time,
so use it when preparing your schedules.
6. It allows for revision time following each review. Revisions follow reviews like night follows day;
however, most project managers schedule time only for the reviews, not the revisions.
7. It has correlation with other projects assigned to the team. The single biggest influence on the
schedule of your project is the workload from other projects that are currently in your unit/team. If you
prepare your schedule in isolation from other projects of the unit/team, it is, most likely, going to fail.
8. Plan and Prioritize. Set aside time at the beginning and end of each day to plan, prioritizing tasks
based on your ultimate goals. Break large projects into small tasks to prevent becoming overwhelmed.
Keep a calendar, schedule and to-do list with you at all times to remain focused. Check off
accomplishments. At the end of the day, do not panic if something has not been completed. Move
unfinished business to the next day’s list.

1.1.3: Types of Time Schedule

1- Tender schedule:

This is a schedule prepared by the contractor to the client in the very beginning stages of the project, even
before the project awarded to the contractor and usually it is a summary schedule clarifying how the
contractor intend to execute the project (sequence and duration). This time schedule does not contains lot of
details and issued as a part of the tender documents for future reference.

2- Master Time Schedule:

The master time schedule is the first schedule to be issued by the contractor after project is awarded from the
client and most contracts allow for a short duration (2 weeks approximate) to submit this schedule after the
letter of award, However the master schedule should contains more details to the project rather than the tender
schedule and could include budget cost, project cash flow and resources histograms.

3- Detailed Time Schedule:

The detailed time schedule is very important document and should be created carefully as per the client
requirements, detailed schedule should have the budget cost, resources and equipments assigned to each

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activity. After issuing the master schedule, the planning engineer should proceed with the detailed schedule
which contains more details and breakdown such as (floor , area , zone , discipline of works …. etc). Once the
detailed time schedule approved from the client or the client representative (Project or Program Manager) then
it called BASELINE SCHEDULE.

4- Baseline Time Schedule:

The baseline schedule is the client approved version of the detailed schedule (or sometimes the master time
schedule) which the progress of works will be monitored against it. The dates and the values in this schedule
are fixed and cannot be changed.

5- Updated Time schedule:

The updated time schedule is a copy of the baseline schedule with actual dates and percentage which represent
the progress of work at certain date (Data Date). Once actual values applied to a baseline schedule it became
an updated schedule with forecast completion dates for each activity could be earlier than the baseline
schedule which mean (Ahead of schedule) or after the baseline schedule dates which mean (Behind the
Schedule).

6- Revised Time Schedule:

The revised time schedule is a recovery schedule to recover schedule delays due to any reason, revised time
schedule could recover 100 % of the delays in the project and shorten the durations to complete the project as
planned or it could not recover any durations if it is not possible and just represent a new completion date of
the project.

1.1.4: Benefits / Advantages / Importance of Time Schedule

• Assists with tracking, reporting on, and communicating progress.
• Ensures everyone is on the same page as far as tasks, dependencies, and deadlines.
• Helps highlight issues and concerns, such as a lack of resources.
• Helps identify task relationships.
• Can be used to monitor progress and identify issues early.
• Improving safety performance by sequencing the activities to ensure maximum protection for workers.
• It enables construction team to see their goals and when they need to be achieved.
• It is possible to change the sequencing of activities and extend or shorten the durations in such a
manner that the use of resources is smoothed and optimized.
• It can help compare actual work performed with the schedule to determine if construction is
proceeding satisfactorily.
• The schedule is useful for formulating tender or bid estimates.
• Based on construction project scheduling, the preliminary costs can be estimated.

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1.1.5 Process of Time Schedule

Step 1: Plan Schedule Management

The first step is to define the policies, procedures, and documentation which will govern the production of the
project schedule. Although optional for small projects, the PMBOK specifies the production of a Schedule
Management Plan, which is a component of the overall Project Management Plan. The following items could
be addressed in this plan:
• Contingencies. How big will they be, and how will they be calculated?
• Resources. Are there any resources who’s availability has a major effect on the schedule?
• Task Dependencies. Are there any major task dependencies the project depends on, such as
completing the foundation before the framing can start?
• Organizational Procedures. Maybe there is a certain software that must be used or standard
procedures for updating the schedule.
• Stakeholders. Who must approve the schedule, or to whom must it be distributed?

Step 2: Define Activities

Define Activities is the process of identifying and documenting the specific actions to be performed to
produce the project deliverables. The key benefit of this process is to break down work packages into
activities that provide a basis for estimating, scheduling, executing, monitoring and controlling the project
work. In the field, the activity list is also known as a Work Breakdown Structure (WBS)

Step 3: Sequence Activities

After the project has been divided into tasks the relationships between them must be determined. Most of the
time a task starts when the previous one finishes, but not all the time. Sequence Activities is the process of
identifying and documenting relationships among the project activities. The key benefit of this process is that
it defines the logical sequence of work to obtain the greatest efficiency given all project constraints.
Task Dependencies
There are, in fact, four types of dependencies:
• Finish to Start (FS): This is the most common dependency. When tasks A and B have an “FS
relationship,” task B cannot start until task A finishes.
• Finish to Finish (FF): When tasks A and B have an FF relationship, task B cannot finish until task A
finishes.
• Start to Start (SS): When tasks A and B have an SS relationship, task B cannot start until task A
starts.
• Start to Finish (SF): When tasks A and B have an SF relationship, task B cannot finish until task A
starts.

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Step 4: Estimate Activity Resources
Estimate Activity Resources is the process of estimating the type and quantities of material, human resources,
equipment, or supplies required to perform each activity. The key benefit of this process is that it identifies
the type, quantity, and characteristics of resources required to complete the activity which allows more
accurate cost and duration estimates.
There are four major types of resources:
1. Labor
2. Tools and equipment
3. Facilities
4. Fixed cost items like subcontractors, etc.
Other resources include financing costs, contingencies, overtime pay, and so forth.

Step 5: Estimate Activity Durations

Estimate Activity Durations is the process of estimating the number of work periods needed to complete
individual activities with estimated resources. The key benefit of this process is that it provides the amount of
time each activity will take to complete, which is a major input into the Develop Schedule process.
• Analogous Estimating: In this method you consult the actual data from a previous or related
project. Even if it has some differences to the current project, you can analyze those differences and
apply a correction factor.
• Parametric Estimating: In this method you break down the project into its fundamental units that
have well known and understood unit rates. For example, the square footage of a house.
• Three Point Estimating: When you have no real good data to go from, you can estimate the highest
possible number (optimistic), and the lowest (pessimistic) as well as the most likely. Then you can use
a triangular distribution (average them), or use a beta distribution.
• Normal Distribution: Estimate = (Optimistic + Most Likely + Pessimistic) / 3
• Beta Distribution: Estimate = (Optimistic + 4 x Most Likely + Pessimistic) / 6

Step 6: Develop Schedule

In this step we will develop the most efficient schedule for the project. This is defined as producing the
official start and end dates for each task. This can be used to direct subcontractors as to when to schedule the
work, order equipment, and to prioritize internal resources. It also uses the critical path method to determine
the shortest possible project completion date and which tasks directly affect it. Issues that arise within those
tasks can then be dealt with on a priority basis.

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 1.2 Gantt Chart
1.2.1: Introduction
A Gantt chart is a horizontal bar chart developed as a production control tool in 1917 by Henry L. Gantt, an
American engineer and social scientist. Frequently used in project management, a Gantt chart provides a
graphical illustration of a schedule that helps to plan, coordinate, and track specific tasks in a project.
A Gantt chart is constructed with a horizontal axis representing the total time span of the project, broken down
into increments (for example, days, weeks, or months) and a vertical axis representing the tasks that make up
the project (for example, if the project is outfitting your computer with new software, the major tasks involved
might be: conduct research, choose software, install software). Horizontal bars of varying lengths represent
the sequences, timing, and time span for each task. Using the same example, you would put "conduct
research" at the top of the vertical axis and draw a bar on the graph that represents the amount of time you
expect to spend on the research, and then enter the other tasks below the first one and representative bars at
the points in time when you expect to undertake them.
1.2.2: Definition:
➢ “A Gantt chart is a useful graphical tool which shows activities or tasks performed against time.”

➢ “A Gantt chart is a chart that shows all of the different sub-tasks of a project and how they relate to
each other over time.”

1.2.3: Components of Gantt Chart:

1. Dates: One of the main components of a Gantt chart, the dates allows project managers to see not only
when the entire project will begin and end, but also when each task will take place. These are
displayed along the top of the chart.
2. Tasks: Large projects always consist of a large number of sub-tasks. A Gantt chart helps project
managers keep track of all of the sub-tasks in a project, so nothing is forgotten or delayed. Tasks are
listed down the left side.
3. Bars: Once the sub-tasks have been listed, bars are used to show the time frame in which each task
should be completed. This helps ensure that every sub-task is done on schedule so the entire project
will be completed on time.
4. Milestones: Milestones are those tasks that are instrumental to a project's completion and success.
Unlike the minor details, which also have to be done, completing a milestone offers a sense of
satisfaction and forward motion. On a Gantt chart, milestones are displayed as diamonds (or,
sometimes, a different shape) at the end of a particular taskbar.
5. Arrows: While some of your tasks can be done at any time, others must be completed before or after
another sub-task can begin or end. These dependencies are indicated by small arrows between the
taskbars on a Gantt chart.

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 6. Taskbars: While many sub-tasks can be completed fairly quickly, there will be plenty of times when
you will want to see at a glance exactly how your project is coming along. Progress is shown by
shading the taskbars to represent the portion of each task that has already been completed.
7. Vertical Line Marker: Another way to monitor your project's progress, a vertical line marker
indicates the current date on the chart. It helps you manage your time effectively as you can see at a
glance how much you have left to do and if you are on track to complete the project on time.
8. Task ID: In today's fast-paced business world, you likely have several tasks going on at the same
time. Including the task ID on the Gantt chart helps everyone involved to quickly identify the task you
are talking about.
9. Resources: While not every Gantt chart lists the names of the people who will be working on it, if
your project will be completed by a number of individuals, listing names and the tasks that are
assigned to them can be incredibly helpful. Identifying and assigning resources to each task helps you
effectively manage people, tools, and skills to complete each project on time.
: Examples of Gantt chart:

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1.2.4: Benefits of a Gantt Chart:
1. Clarity
One of the biggest benefits of a Gantt chart is the tool's ability to boil down multiple tasks and timelines into a
single document. Stakeholders throughout an organization can easily understand where teams are in a process
while grasping the ways in which independent elements come together toward project completion.
2. Communication
Teams can use Gantt charts to replace meetings and enhance other status updates. Simply clarifying chart
positions offers an easy, visual method to help team members understand task progress.
3. Motivation
Some teams or team members become more effective when faced with a form of external motivation. Gantt
charts offer teams the ability to focus work at the front of a task timeline, or at the tail end of a chart segment.
Both types of team members can find Gantt charts meaningful as they plug their own work habits into the
overall project schedule.
4. Coordination
For project managers and resource schedulers, the benefits of a Gantt chart include the ability to sequence
events and reduce the potential for overburdening team members. Some project managers even use
combinations of charts to break down projects into more manageable sets of tasks.
5. Creativity
Sometimes, a lack of time or resources forces project managers and teams to find creative solutions. Seeing
how individual tasks intertwine on Gantt charts often encourages new partnerships and collaborations that
might not have evolved under traditional task assignment systems.

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6. Time Management
Most managers regard scheduling as one of the major benefits of Gantt charts in a creative environment.
Helping teams understand the overall impact of project delays can foster stronger collaboration while
encouraging better task organization.
7. Flexibility
Whether you use Excel to generate Gantt charts or you load tasks into a more precise chart generator, the
ability to issue new charts as your project evolves lets you react to unexpected changes in project scope or
timeline. While revising your project schedule too frequently can eliminate some of the other benefits of Gantt
charts, offering a realistic view of a project can help team members recover from setbacks or adjust to other
changes.
8. Manageability
For project managers handling complex assignments, like software publishing or event planning, the benefits
of Gantt charts include externalizing assignments. By visualizing all of the pieces of a project puzzle,
managers can make more focused, effective decisions about resources and timetables.
9. Efficiency
Another one of the benefits of Gantt charts is the ability for teams members to leverage each other’s deadlines
for maximum efficiency. For instance, while one team member waits on the outcome of three other tasks
before starting a crucial piece of the assignment, he or she can perform other project tasks. Visualizing
resource usage during projects allows managers to make better use of people, places, and things.
10. Accountability
When project teams face major organizational change, documenting effort and outcomes becomes crucial to
career success. Using Gantt charts during critical projects allows both project managers and participants to
track team progress, highlighting both big wins and major failures. During professional review periods, team
members who frequently exceed expectations can leverage this documentation into larger raises or bonuses.

1.2.5: Disadvantages of a Gantt chart:

➢ They can become extraordinarily complex.
➢ The size of the bar does not indicate the amount of work.
➢ They need to be constantly updated.
➢ Difficult to see on one sheet of paper.
➢ Require more efforts
➢ Time Consuming

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 1.3 Line of Balance:
1.3.1: Introduction
The Line of Balance (LOB) Scheduling Technique was originated by the Goodyear Company in the early
1940's and was developed by the U.S. Navy in the early 1950's for the programming and control of both
repetitive and non‐repetitive projects. It was developed for industrial manufacturing and production control.
The basic concepts of LOB have been applied in the construction industry as planning and scheduling method.
A line of balance diagram comprises a series of inclined lines which represent the rate of working between
repetitive operations in a construction sequence. The Line‐of‐Balance also known as the Repetitive
Scheduling Method (RSM), Location Based Scheduling, Vertical Production Method or Vertical Scheduling
Method. It's the best planning method for a repetitive work such as High-rise building, highways, pipeline,
tunnels, railway, however it may be adapted for non-repetitive projects as well.

Line of Balance (LOB) is a method of showing the repetitive work that may exist in a project as a single line
on a graph. Unlike a Bar Chart, which shows the duration of a particular activity, a LOB Chart shows
the rate at which the work that makes up all of the activities has to be undertaken to stay on schedule,
the relationship of one trade or process to the subsequent trade or process is defined by the space
between the lines.

1.3.2: Definition:
➢ “Line of Balance (LOB) is a management control process for collecting, measuring and presenting
facts relating to time, cost and accomplishment.”

➢ “A time scheduling technique that is typically used in situations where skilled resources are
performing the same activity on multiple products within a project.”

1.3.3: Objectives of Line of Balance:

➢ To equalize the work load among the operators.
➢ To identify the bottleneck operations.
➢ To establish the speed of the production line.
➢ To determine the number of workstations.
➢ To determine the labor cost of production.
➢ To establish the percentage workload of each operators.
➢ To assist in plant layout.
➢ To reduce production cost.
➢ To minimize the cycle time.

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 Examples of Line of Balance
Example: 1:

Example: 2:

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Example: 3:

The solid lines make it clearer how each trade progresses at a different rate. The steeper the line the faster the
trade moved between the units. The start of each trade is scheduled so that the work is completed as soon as
possible with each trade having continuity of work. Natural buffers occur at the beginning or end of the trades
work and these can be used in a similar way to float in a schedule based on critical path analysis. Line of
balance charts are sometimes combined with physical layouts of the work on the vertical axis, and may be
referred to as a time chain age chart.

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1.3.4: Advantages of Line of Balance:
1. Clearly shows the amount of work taking place in a certain area at a specific time of the project.

2. Has the ability to show and optimize the resources used for large number of repeated activities,
executed in several zones or locations.

3. Easier cost and time optimization analysis because of all the information available for each activity in
the project.

4. Ease of setup and its superior presentation and visualization.

5. Easier to modify, update and change the schedule.

6. Better managing of all the various sub-contractors in the project.

7. Allows for simpler and clearer resource management and resource optimization functions.

8. Visualization of productivity and location of crews.

9. It allows project managers to see, in the middle of a project, whether they can meet the schedule if
they continue working as they have been.

1.3.5: Disadvantages of Line of Balance:

1. It does not show the critical activities.
2. It is limited to production and assembly type process.
3. It could be divided only by location.
4. It shows only where the problem is, it does not show what actual problem is.
5. It is a monitoring device, not working as planning device.
6. Inability to generate a clear critical path of a project.
7. Non linear tasks are not usually shown in detail in the LOB diagram.

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 1.4 Network Techniques / Project Network:

1.4.1: Introduction / Concept of Project Network:

Network technique is a technique for planning, scheduling (programming) and controlling the progress
of projects. This is very useful for projects which are complex in nature or where activities are subject to
considerable degree of uncertainty in performance time.

This technique provides an effective management, determines the project duration more accurately,
identifies the activities which are critical at different stages of project completion to enable to pay more
attention on these activities, analyze the scheduling at regular interval for taking corrective action well in
advance, facilitates in optimistic resources utilization, helps management for taking timely and better
decisions for effective monitoring and control during execution of the project.

The network is the framework that will be used by the project managers to make decisions concerning
project time, cost and performance. Once the network is developed, it is very easy to modify or change
when unexpected events occur as the project progresses. Developing the project networks takes time for
someone or some group to develop.

1.4.2: Definition:

➢ “The project network diagram displays the duration of activities in the project, their chronological
order and logical dependencies between the activities graphically or in tabular form.”

➢ “A project network is a graph (weighted directed graph) depicting the sequence in which a project's
terminal elements are to be completed by showing terminal elements and their dependencies. It is
always drawn from left to right to reflect project chronology”

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1.4.3: Objectives of Project Network:

❖ To minimize idle resources: Allowing for large variations in the use of limited resources may disturb
the whole plan. Thus, efforts should be made to avoid the cost incurred due to idle resources.
❖ To minimize the total project cost: The total cost of the project can be calculated and then efforts
can be made to minimize the total cost by calculating the cost of delay in the completion of an activity
of the project in addition to the cost of the resources required to carry out the jobs at various speeds
(i.e. normal or over time rates of pay).
❖ To trade off between time and cost of project: The idea of trade off between time and cost of project
is centered on the idea that duration of same activities can be cut down if additional resources are
allocated to them. For technical reasons, the durations may not be reduced indefinitely. Similarly,
there is also a most cost efficient duration called ‘normal point’ & stretching the activity beyond it
may lead to a rise in direct costs.
❖ To minimize production delays, interruption and conflict: This is achieved by identifying all
activities involved in the project, their precedence constraints, etc.
❖ Aid in planning, organizing and controlling: Since all project activities are shown in sequence with
relevant interrelationships, the network diagram of a project will help the project manager and team
during planning and organizing. Network diagram will be useful during project execution as well since
it is a snapshot of the project activities tied with the dependencies.
❖ Show interdependencies of activities: Since interdependencies of activities are visible in the network
diagram, it will be easier to see which activity can start after which one, which activity depends on
each other, predecessors and successors of each activity etc.
❖ Show workflow of the project activities: So the project team will know the sequence of activities. At
a certain point in the project, it will be easier to see in the network diagram what has been
accomplished and the remaining activities and their interdependencies with each other.
❖ Identify opportunities to compress the schedule: You may need to shorten the duration of the
remaining activities in a project. This can be because your project is behind schedule and in order to
complete the project on time, you need to compress the schedule. In this case, since network diagrams
show the order of the activities and durations, it will be easier to focus on how to compress the
remaining activities in the project.
❖ Show project progress. Since it shows the order of activities in a project and total path from the
beginning of the project till the end, it is a good instrument for showing the project progress.

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1.4.4: Applications of Project Network:
✓ Planning,
✓ Construction of buildings, bridges, highways, railways, stadiums, irrigation projects, factories, power
projects etc.
✓ Assembly line scheduling,
✓ Development and launching of new products,
✓ Strategic and tactical military planning,
✓ Research and development,
✓ Market penetration programmes,
✓ Planning of political campaigns,
✓ Maintenance and overhauling of complicated or large machineries,
✓ Organizing big conferences etc.

1.4.5: Advantages of Project Network:

1. Detailed and thoughtful planning provides better analysis and logical thinking.

2. Identifies the critical activities and focus them to provide greater managerial attention.

3. Network technique enables to forecast project duration more accurately.

4. It is a powerful tool for optimization of resources by using the concept of slack.

5. It provides a scientific basis for monitoring, review and control, to evaluate effect of slippages.

6. It helps in taking decision;

✓ To over-come delays,
✓ To crashing programme,
✓ Optimizing resources, and
✓ On other corrective actions.

7. It helps in getting better co-ordination amongst related fields.

8. It is an effective management tool through a common and simple language, providing common
understanding.

1.4.6: Components of Project Network:

1. Activity

Any individual operation which makes use of resources and has an end and a starting is called as activity. An
arrow is generally used to characterize an activity with its head representing the direction of progress in the
project. These are divided into four classes

1. Predecessor activity - Activities that ought to be completed immediately previous to the start of
another activity are known as predecessor activities.

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 2. Successor activity - These are those activities that cannot be started until one or more of other
activities are finished but immediately succeed them.

3. Concurrent activity - These are activities which can be achieved concurrently. It may be noted that
an activity can be a successor or a predecessor for an event or it may be concurrent with one or more
activities.

4. Dummy activity - An activity which does not use any type of resource but simply depicts the
technological dependence is known as dummy activity.

The dummy activity is included in the network to clear the activity pattern in the next two situations

• To prepare activities with common starting and ending points noticeable

• To discover and maintain the correct precedence relationship between activities that is not linked by
events.

For instance, take a situation where A and B are concurrent activities. C is reliant on A and D is reliant on A
and B both. This type of situation can be handled with the use of dummy activity as shown in the figure.

2. Event

An event signifies a point in time representing the completion of several activities and the starting of new
ones. This is typically symbolizes by a circle in a network which is also known as node or connector.

The events are divided into three categories

1. Merge event - Event in which more than one activity comes and connects an event is called as merge
event.

2. Burst event - It is event in which more than one activity leaves an event.

3. Merge and Burst event - An activity can be merge and burst event simultaneously, as regard some
activities it can be a merge event and with some other activities it may be a burst event.

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3. Sequencing

The first requirement in the development of network is to keep the precedence relationships. In order to
prepare a network, the subsequent points must be taken into considerations

• What job or jobs follow it?

• What job or jobs could run concurrently?

• What job or jobs precede it?

• What controls the start and finish of a job?

1.4.7: Construction of Project Network:

A) Basic Rules in Developing Project Networks

1. Networks flow typically from left to right.

2. An activity cannot begin until all preceding connected activities have been completed.

3. Arrows on networks indicate precedence and flow. Arrows can cross over each other.

4. Each activity should have a unique identification number.

5. An activity identification number must be larger than that of any activities that precede it.

6. Looping is not allowed

7. Conditional statements are not allowed (that is, this type of statement should not appear: If successful, do
something; if not, do nothing).

B) Approaches

The two approaches used to develop project networks are known as Activity-On-Node (AON) and Activity-
On-Arrow (AOA). Both methods use two building blocks—the arrow and the node. Their names derive from
the fact that the former uses anode to depict an activity, while the second uses an arrow to depict an activity.

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1. Activity-on-Node

Activity-on-node is a project management term that refers to a precedence diagramming method which uses
boxes to denote schedule activities. These various boxes or “nodes” are connected from beginning to end with
arrows to depict a logical progression of the dependencies between the schedule activities. Each node is
coded with a letter or number that correlates to an activity on the project schedule. Typically, an activity-
on-node diagram will be designed to show which activities must be completed in order for other activities to
commence. This is referred to as “finish-to-start” precedence – meaning one activity must be finished before
the next one can start.

2. Activity-On-Arrow or Arrow Diagramming Method

In an activity-on-arrow network, activities are represented by a line between two circles. The first circle
represents the start of the activity and is known as the start event (sometimes called the i-node). The second
circle represents the finish of the activity and is known as the finish event (sometimes called the j-node).

The arrow diagramming method (ADM) or Activity-On-Arrow (AOA) refers to a schedule network
diagramming technique in which the schedule activities within a given project are represented by the use of
arrows. The beginning of the schedule activity is represented by the tail, or base, of the arrow. The pointed
end of the arrow represents the endpoint of a specific schedule activity, and the length of the arrow can
loosely represent the time in between.

C) Process of Network Construction

Step 1: The first step in network construction is to split the work contents involved in the implementation of
the project to the level of activities which represent, individually, category of works, e.g. Preparation of
Quantity Survey involving drawings and specifications; Floating of Tender enquiries, Analysis of Tender and
further negotiation with the possible contractor; issue of purchase orders and finalising the contract etc.

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Step 2: Arrange the activities in sequential order of operation. Establish the inter-relationship of the
activities. We will note that some of the activities are preceded by completion of other activities except the
first one when there is no other preceding activity and, hence, can be designated START.

One activity can then be started on completion of other preceding activity or activities, depending upon the
inter-relationship, e.g. the concretes can be poured for roofing only on completion of (1) construction of the
walls and (2) construction in concrete of the stairs, when required as per plan.

In order to minimize the project schedule, which is of utmost necessity to economize the project cost, some of
the activities can be started concurrently e.g. construction of the staircase and the construction for the brick-
walls can be carried out simultaneously.

Step 3: Identify Event: We know that an ‘event’ is happening a particular point of time representing
completion of one or more activities and, at the same time, some other activity or activities emerge out of it,
i.e. the starting time of such other activity.

We also know the ‘tail event’ from where the activity emerges and then terminates to another event the ‘head
event’ and the head event is the tail event of another succeeding activity till we reach the END of the project
schedule. We also know that, while an activity is represented by a straight line arrow from left to right with
one arrow for each activity the event is represented by a ‘circle’. The arrow showing an activity need not be
drawn to scale. In other words, the lengths of the arrows need not be proportionate with the duration of the
activities. The arrows may be also bent (by straight lines and not curves).

Step 4: Now that we have arranged the activities in a logical sequence we can establish their interrelationship
and show the schedule of works by diagram as shown below along with numbering the events and, in most
cases, the head event having a greater number than the tail event.

When one activity, i.e. from (2) to (3), as shown in the diagram below, is preceded by the completion of
another activity i.e. (1) to (2), Event (2) is the tail event of activity (2) to (3) and is the head event of activity
(1) to (2).

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In the above diagram, activity (2) to (3) and also (2) to (4) can be started, simultaneously, on completion of
the activity (1) to (2).

Step 5: Two cases are wrong and must be avoided:

1. Loops: We have mentioned that the directions of arrows are from left to right. Care should be taken that the
arrows do not traverse right to left and form a loop as depicted below:

In the diagram shown above, the arrow from (7) comes back to (6) and thus forms a loop, which is illogical,
as it will indicate a never-ending situation—as the path will indicate an infinite circle between (6) to (7) and
back to (6).

2. Dangling: A dangling of an activity in the network will indicate an activity left over as shown, below:

Activity (4) to (7) left at event (7) represents a ‘dangling’ and is wrong.

Example: We are by now ready to construct a network for a project. The entire span of the project work has
been broken to, say, ten different activities.

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The network diagram of the schedule of activities detailed in the above table will appear as below:

Note:

1. The event numbers are indicated in an ascending order; with a logic that the head event is with a serial
number higher than the tail event. However, as three activities start from the event (1) leading to head events
(2), (3) and (4), it really does not matter which event should be (2) or (3) or (4).

2. The activity duration (time units) are also shown against the respective activities.

3. The lengths of the arrows do not have any direct relation with the duration it is stretched as much to
develop the network diagram as smart, clean and well-balanced. The length of G with only two weeks’
duration is stretched longer than that of activity A of 15 weeks, so that the entire drawing appears well-
balanced.

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 1.5 Slack (Float or Total Float) and Free Float:

Total Float:

This is the type of Float that is commonly referred to as “Float”. Total float is the amount of time an activity
can be delayed without delaying the project completion date. So, Total Float is about flexibility at the
project level. It is about the flexibility that an activity has in its execution without delaying the Project finish
date.

Total float is calculated by subtracting the Early Start date of an activity from its Late Start date (Late Start
date – Early Start date), or Early Finish date from its Late Finish date (Late Finish date – Early Finish date).

Total Float or Float = LS – ES or LF – EF

PMBOK defines Total Float as: “The amount of time that a schedule activity can be delayed or extended
from its early start date without delaying the project finish date or violating a schedule constraint.”

Example:

In the above network diagram, you can see two paths:

1. The first path is A->B->D with a 20-day duration.

2. The second path is A->C->D with a 12-day duration.

The first method of finding the total float

Total float = duration of the critical path – duration of the non-critical path

= (duration of the path A->B->D) – (duration of the path A->C->D)

= 20 – 12

=8

Hence, the total float is eight days.

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The second method of finding the total float

On the path A->C->D, Activity A and D lie on the critical path; therefore, they will not have a total float.
Only Activity C can have a total float. We can calculate the total float by using either the finish dates or start
dates.
First, we will go with the Late Finish and Early Finish dates:
Total float for Activity C = (LF of Activity C – EF of Activity C)
= 15 – 7
=8
Now, the second formula:
Total float for Activity C = (LS of Activity C – ES of Activity C)
= 14 – 6
=8
The durations are the same. This means that both formulas will give you the same result.

Total float, also called float or slack, is the amount of time an activity can be delayed without delaying the
overall project duration. Total float is shared between activities in a sequence.

Free Float
In the context of project management, the term “free float” is used to describe amount of time that spans from
the completion of one previously scheduled activity and extends to the point at which the next scheduled
activity is set to begin. Free float can be calculated by determining the amount of the time between the earliest
start date of the initial activity and the earliest start date of the succeeding activity, and then subtracting from
that total the amount of time that it is expected the first activity will take to complete.

So, Free Float is about flexibility at the activity level. It is about the flexibility that an activity has in its
execution without delaying its successor activity.

Free Float = ES (of successor) – EF (of current) - 1

PMBOK Defines Free Float as: “The amount of time that a schedule activity can be delayed without delaying
the early start date of any successor or violating a schedule constraint”

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We know that: Free float = ES of next activity – EF of current activity – 1

In the above diagram, Activity G can have the free float because Activity D and G converge on one common
activity. Activity D will not have a free float because its successor, Activity E, is starting the day after the
completion of Activity D.

Free float of Activity G = Early Start of Activity E – Early Finish of Activity G – 1

=6–3–1
=2
Free float is the amount of time an activity can be delayed without delaying the early start of any immediate
successor activity.

Total Float Free Float

Calculated at path level of activities Calculated at the activity level

Defines flexibility of a path w.r.t project end Define flexibility of activity w.r.t its successor
date start

Free Float Formula ES (of successors) – EF of

Total Float Formula LS-ES or LF-EF
current activity -1

Can come into existence if network diagram has Can come into existence if successor is having
multiple path and there are activities which are more than one activity converging on it or the
not there on Critical Path successor activity is having a constraint applied

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 1.6 PERT (PROGRAM EVALUATION REVIEW TECHNIQUE):

1.6.1: Introduction:
PERT is a project management planning tool used to calculate the amount of time it will take to realistically
finish a project. PERT stands for Program Evaluation Review Technique. PERT charts are tools used to
plan tasks within a project - making it easier to schedule and coordinate team members accomplishing the
work. PERT charts were created in the 1950s to help manage the creation of weapons and defense projects for
the US Navy. While PERT was being introduced in the Navy, the private sector simultaneously gave rise to a
similar method called Critical Path.

PERT is similar to critical path in that they are both used to visualize the timeline and the work that must be
done for a project. However with PERT, you create three different time estimates for the project: you
estimate the shortest possible amount time each task will take, the most probable amount of time, and the
longest amount of time tasks might take if things don't go as planned.

For every activity in PERT, three different time estimates are obtained.

➢ Optimistic time (to) – It is the time taken to perform an activity if everything goes smoothly while
performing the activity. It is the shortest possible time estimate for an activity.
➢ Pessimistic time (tp) – It is the time taken to perform an activity if everything goes wrong, while
performing the activity. It is the longest possible time estimate of an activity.
➢ Most likely time (tm) – It is the time which is most likely to be taken, under the given circumstances.
This is often based on the gut feeling or hunch of the project manager.
➢ expected time:(te) the best estimate of the time required to accomplish an activity

1.6.2: Definition:

“The program evaluation and review technique is a statistical tool used in project management, which was
designed to analyze and represent the tasks involved in completing a given project.”

1.6.3: Steps in the PERT Planning Process:

1. Identify the specific activities and milestones: The activities are the tasks required to complete the
project. The milestones are the events marking the beginning and end of one or more activities. It is
helpful to list the tasks in a table that in later steps can be expanded to include information on sequence
and duration.
2. Determine the proper sequence of the activities: This step may be combined with the activity
identification step since the activity sequence is evident for some tasks. Other tasks may require more
analysis to determine the exact order in which they must be performed.
3. Construct a network diagram: Using the activity sequence information, a network diagram can be
drawn showing the sequence of the serial and parallel activities. For the original activity-on-arc model, the

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 activities are depicted by arrowed lines and milestones are depicted by circles or "bubbles". If done
manually, several drafts may be required to correctly portray the relationships among activities. Software
packages simplify this step by automatically converting tabular activity information into a network
diagram.
4. Estimate the time required for each activity: Weeks are a commonly used unit of time for activity
completion, but any consistent unit of time can be used. A distinguishing feature of PERT is its ability to
deal with uncertainty in activity completion times. For each activity, the model usually includes three time
estimates:
➢ Optimistic time: generally the shortest time in which the activity can be completed. It is
common practice to specify optimistic times to be three standard deviations from the mean so
that there is approximately a 1% chance that the activity will be completed within the optimistic
time.
➢ Pessimistic time: the longest time that an activity might require. Three standard deviations from
the mean is commonly used for the pessimistic time.
➢ Most likely time: the completion time having the highest probability. Note that this time is
different from the expected time

PERT assumes a beta probability distribution for the time estimates. For a beta distribution, the expected time
for each activity can be approximated using the following weighted average:

Expected Time = (Optimistic + 4 x Most Likely + Pessimistic) / 6

5. Determine the critical path: The critical path is determined by adding the times for the activities in each
sequence and determining the longest path in the project. The critical path determines the total calendar
time required for the project. If activities outside the critical path speed up or slow down (within limits),
the total project time does not change. The amount of time that a non-critical path activity can be delayed
without delaying the project is referred to as slack time. If the critical path is not immediately obvious, it
may be helpful to determine the following four quantities for each activity:
➢ ES - Earliest Start time
➢ EF - Earliest Finish time
➢ LS - Latest Start time
➢ LF - Latest Finish time
6. Update the PERT chart as the project progresses: Make adjustments in the PERT chart as the project
progresses. As the project unfolds, the estimated times can be replaced with actual times. In cases where
there are delays, additional resources may be needed to stay on schedule and the PERT chart may be
modified to reflect the new situation.

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1.6.4: Advantages of PERT Technique:

1. PERT forces the management to plan carefully and study how the various parts fit into the whole
project.

2. PERT enables the business managers to predict time and cost of the project in advance.

3. PERT is a forward-looking control device for management. PERT calls attention on the timely
completion of the project and avoids delay.

4. PERT enables the determination of the probabilities concerning the time by which activity and
project would be completed.

5. PERT suggests areas for increasing efficiency and reducing cost.

6. It provides up-to-date information of the project programme so that the necessary steps may be taken
to minimize the delays and interruptions.

7. PERT assists in coordinating the different parts of the total projects.

8. It provides a graphical display of project activities that helps the users understand the relationships
among the activities.

9. It is the ideal technique for tactical level planning and operational level control of projects.

10. It is effective in planning single project activities in any type of industry.

11. It allows project managers to do 'what if analysis’ on project activities.

1.6.5: Limitations of PERT Technique:

1. In PERT, it is assumed that all the activities involved in the project are known in advance. In
projects like research and development (R and D), it is not possible to list out all the activities in
advance.

2. The assumption that a project can be sub-divided into a set of predictable and independent, activities
may not hold true always.

3. PERT emphasizes only on time and not the costs. PERT is based on time estimates and there may be
error in estimating time.

4. For active control of a project, PERT requires frequent updating and revising of calculations. It is time
consuming exercise, which requires highly trained personnel.

5. It cannot effectively handle situations in which two or more projects share available resources.

6. It fails when there is a change in the precedence and sequential relationships of project activities.

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 7. It requires a lot of information as input to generate an effective plan. This may prove too expensive.

1.6.6: Probability of Completion Project on Time:

1. Estimated Duration: The duration which is supposedly required to accomplish a specific task is
termed as an estimated duration. It is calculated through the following formula:

2. Variance: The level of volatility of the time required to carry an activity from the average time is
termed as variance in PERT analysis.

3. Earliest Start Time: It is a forward pass which begins with event

Where,

• ESj is the Earliest Start Time of Ending Node;

• ESi is the Earliest Start Time of Starting Node and;
• Dij is the Estimated Duration of Concerned Activity.
• Also, max_i denotes that when an ending node consists of more than one starting nodes, the highest
ESj out of all the values is considered.
4. Latest Completion Time: It is a backward pass which starts in the reverse order from
the last node or event.

Where,

• LCi is the Latest Completion Time of Starting Node;

• LCj is the Latest Completion Time of Ending Node and;
• Dij is the Estimated Duration of Concerned Activity.
• Also, min_j signifies that in case of two or more ending nodes for a particular starting node, the least
LCi value is taken into consideration.

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PERT Example

IMMEDIAT MOST LIKELY PESSIMISTI

OPTIMISTIC
ACTIV E TIME C TIME
ACTIVITY DESCRIPTION TIME ESTIMATE
ITY PREDECESS ESTIMATE ESTIMATE
(T_O)
OR (T_M) (T_P)

A Market Research and Analysis 10 50 90

B Customer Need Identification A 10 20 30

C Product's Proposed Features A 15 20 25

and Specifications

D Competitive Analysis A 40 60 80

E Sample Study B 30 40 50

F Product Development C 40 50 120

G Potential Market Analysis D 10 30 50

H Product Differentiation D 10 20 30

I Cost Estimation E 5 10 15

J Product Testing and Approval F,G 30 35 70

K Product Pricing H,J 6 10 14

L Product Launch I,K 15 30

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Considering the above table, determine the following:

1. Project network;

2. Expected duration and variance of every activity;

3. Critical path and expected project completion time; and

4. Probability of project completion on or before 225 days.

Solution

1. Project network:

2. Expected duration and variance of every activity:

Calculation of Expected Duration:

For Activity A:

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Finding the Variance of each Activity:

For Activity A:

Likewise, we have calculated the expected duration and variance of all the activities in the table given below:

ACTIVITY ACTIVITY DESCRIPTION ESTIMATED DURATION (T_E) VARIANCE

A Market Research and Analysis 50 2.56

B Customer Need Identification 20 1.00

C Product's Proposed Features and Specifications 20 0.25

D Competitive Analysis 60 0.44

E Sample Study 40 0.25

F Product Development 60 2.56

G Potential Market Analysis 30 1.78

H Product Differentiation 20 1.00

I Cost Estimation 10 1.00

J Product Testing and Approval 40 1.31

K Product Pricing 10 0.64

L Product Launch 30 1.00

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 3. Evaluating the critical path and the expected project completion time:

For the critical path, we need to calculate:

Earliest Start Time:

The earliest start time for the first event will always be 0.

With the help of given formula, the earliest start time is computed as follows:

For Event 3:

Events 7 and 8 have the maximum value selection concept, therefore:

Latest Completion Time:

The latest completion time for event 10 is equivalent to the earliest start time of event 10.

Let us find out the LCi with the help of the given equation:

For Event 6:

Event 5 is the minimum value selection concept; hence:

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Similarly, we can determine the earliest start time and latest completion time for all the events or nodes. The
ESj and LCi for all the ten events are as follows:

EVENT EARLIEST START TIME (ESJ) LATEST COMPLETION TIME (LCJ)

1 0 0

2 50 50

3 70 140

4 70 80

5 110 110

6 110 180

7 140 140

8 180 180

9 190 190

10 220 220

As we know that the critical path is the longest path of the PERT Chart connecting the nodes which fulfil all
the four conditions mentioned above.

The critical path is:

And the expected project completion duration is:

50+60+30+40+10+30=220 days

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4. Probability of project completion on or before 225 days:

For this computation, we will require the summation of estimated duration and total variance of the activities
lying in the critical path. The following table will provide the required data:

ACTIVITY ESTIMATED DURATION (T_E IN DAYS) VARIANCE

A 50 2.56

D 60 0.44

G 30 1.78

J 40 1.31

K 10 0.64

L 30 1.00

Total 220 7.73

Let us first determine the value of z:

Thus, to find out the probability, we have to use the Standard Normal Distribution Table, where the value of
1.80 is 0.9641. To convert this value in percentage, we have to multiply it with 100; hence we get:
Probability of project completion on or before 225 days = 96.41%

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 1.7 CPM (CRITICAL PATH METHOD):

1.7.1: Introduction:

The term critical path method refers to a specific technique of schedule network analysis that is used to
determine the amount of flexibility that exists in regards to the scheduling of a particular and specific logical
network path with the network of the project schedule. The amount of flexibility within the scheduling here
can also be referred to by the term “float“. Another important element of the technique of critical path method
involves the determination of minimum total project duration. A forward pass is used to determine and
calculate the early start and finish dates, through utilization of a previously specified start date. A backward
pass is used to determine and calculate the late start and finish dates, again, through use of a previously
determined date, this time a previously determined finishing date. In some cases the previously determined
finish date is also the early finish date determined through the calculating done though the forward pass.

The Critical Path Method (CPM) was first developed in USA by the E.I DuPont Nemours & Co. in 1956 for
doing periodic overhauling and maintenance of a chemical plant.

1.7.2: Definition:

➢ “The term critical path method refers to a specific technique of schedule network analysis that is used
to determine the amount of flexibility that exists in regards to the scheduling of a particular and
specific logical network path with the network of the project schedule.”

1.7.3: Forward Pass and Backward Pass in Project Scheduling

❖ Forward Pass:

Forward pass is a technique to move forward through network diagram to determining project duration and
finding the critical path or Free Float of the project. In order to calculate Early Finish, we use forward pass.
Means moving from Early Start towards right to come up with Early Finish of the project.

Early Finish (EF) = ES + Duration

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 ❖ Backward Pass:

Backward pass represents moving backward to the end result to calculate late start or to find if there is any
slack in the activity. In order to calculate Late Start (LS), we apply backward Pass moving from Late Finish
and deducting from activity duration.

LS = LF – Duration

❖ Early Start (ES), Early Finish (EF), Late Start (LS) and Late Finish (LF) in a network diagram

Critical Path is the longest sequence of activity on a project that carry zero free float / slack.

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1.7.4: Example:

The critical path is the sequence of activities with the longest duration. A delay in any of these activities will
result in a delay for the whole project. Below are some critical path examples to help you understand the key
elements...

The duration of each activity is listed above each node in the diagram. For each path, add the duration of each
node to determine its total duration. The critical path is the one with the longest duration.

There are three paths through this project...

1.7.5: Advantages of Critical Path Method (CPM):

1. It figures out the activities which can run parallel to each other.

2. It helps the project manager in identifying the most critical elements of the project.

3. It gives a practical and disciplined base which helps in determining how to reach the objectives.

4. CPM is effective in new project management.

5. CPM can strengthen a team perception if it is applied properly.

6. CPM provides demonstration of dependencies which helps in the scheduling of individual activities.

7. It shows the activities and their outcomes as a network diagram.

8. It gives a fair and concise procedure of documenting of project.

9. It helps in determining the slack time.

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 10. An explicit and clear approach of communicating project plans, schedules, time and cost performance
is developed.

11. It is extensively used in industry.

12. It helps in optimization by determining the project duration.

1.7.6: Disadvantages of Critical Path Method (CPM):

1. The scheduling of personnel is not handled by the CPM.

2. In CPM, it is difficult to estimate the completion time of an activity.

3. The critical path is not always clear in CPM.

4. For bigger projects, CPM networks can be complicated too.

5. It also does not handle the scheduling of the resource allocation.

6. In CPM, critical path needs to be calculated precisely.

The Difference Between PERT and CPM

Points PERT CPM

Type Of Tool PERT is a probabilistic project The CPM is a deterministic project

management tool. management tool.

Focus PERT is an event oriented tool, whereby CPM is an activity oriented tool, the
the network interest is focused upon start or network interest is focused upon the start
completion of events and not on activities and completion of activities and not
themselves. events themselves.

Usefulness PERT is useful for research and CPM is useful for the construction
development project as they comprise of projects because it comprises of the
the unpredictable tasks and activities. predictable tasks and activities.

Terminology CPM technique involves use of

PERT technique involves use of words like
terminology like arrow diagram, nodes
events, network diagram and slacks.
and float.

Grouping of PERT does not categories activities into CPM categorizes activities into critical
Activities critical and non-critical activities. and non-critical activities.

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Duration of In PERT, duration of activities are not
In CPM, duration of activity is estimated
Activity estimated with a fair degree of accuracy
with a fair degree of accuracy.
(activities are not so accurate and definite).

Room For In PERT, allowance is made for In CPM, no allowance is made for
Uncertainty uncertainties in the duration of time uncertainties in the duration of time
involved. involved.

Time-Cost In CPM, the objective is developing an

In PERT, time is not related to cost.
Relationship optimum time-cost relationship.

Application PERT is suitable in defense projects and CPM is suitable for problems in industrial
R&D where activity time cannot be reliably setting, plant maintenance, civil
predicted. construction projects etc.

1.8 Project Crashing:

1.8.1: Introduction:

The project manager is frequently confronted with having to reduce the scheduled completion time of a
project to meet a deadline. In other words, the manager must finish the project sooner than indicated by the
CPM/PERT network analysis. Project duration can often be reduced by assigning more labor to project
activities, in the form of overtime, and by assigning more resources (material, equipment, and so on).
However, additional labor and resources increase the project cost. Thus, the decision to reduce the project
duration must be based on an analysis of the trade-off between time and cost. Project crashing is a method for
shortening the project duration by reducing the time of one (or more) of the critical project activities to less
than its normal activity time. This reduction in the normal activity time is referred to as crashing. Crashing is
achieved by devoting more resources, usually measured in terms of dollars, to the activities to be crashed.

1.8.2: Definition:

➢ “Crashing is a schedule compression technique used to reduce or shorten the project schedule.”

➢ “Crashing refers to a particular variety of project schedule compression which is performed for the
purposes of decreasing total period of time (also known as the total project schedule duration).”

Example: The initial direct cost was 50 man days (5 men x 10 days) and now it is 60 man days (10 men x 6
days). Therefore, the direct cost has increased by 10 men- days. At the same time, because of the decrease in
duration of the activity by four days, the indirect cost (cost of supervision) decreases. Hence, we can conclude

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that the direct and indirect costs are inversely proportional to each other, i.e. when one increases, the other
decreases.

1.8.3: Terminology:

❖ Crash time: It is the shortest time that could be achieved if all effort (at any reasonable cost) were
made to reduce the activity time. The limit beyond which the duration of the activity does not decrease
by adding any amount of resources is called the crash time. It is the shortest possible activity time.
❖ Crash cost: The direct cost associated with each crash time is called the crash cost.
❖ The normal time (10 days in our example) can be defined as the duration of an activity when the
minimum possible resources required for its performance are deployed.
❖ Normal cost: The lowest expected activity costs are called the normal costs.
❖ Project direct cost: It is the direct cost involved in all the activities of the project.
❖ Project indirect cost: It is the costs associated with sustaining a project. They include the cost of
supervision during the implementation of the project, overheads, facilities, penalty costs and lost
incentive payments.

1.8.4: Need / Importance / Reasons of Project Crashing:

1. To get the greatest schedule compression: The main reason for crashing your schedule is to get the
project done faster. If you need to bring your project’s end date forward then crashing gives you the most
schedule compression for the least impact and the smallest cost.

2. When part of the project jeopardizes progress: You could also look at crashing when you are facing one
part of the project putting the rest of the project at risk. If a particular work stream isn’t going well it could
suddenly become the route of the critical path. That might be OK, but equally you might feel that this difficult
strand of work is going to hold the rest of the project to ransom. Crashing the schedule around those tricky
tasks is one way to get you out of difficulty.

3. When meeting a fixed deadline: Projects require change and changes (however formal and appropriate
your change control processes) have a habit of adding more time into the plan. When you are dealing with
fixed date projects that’s not a good thing. So what happens when your necessary and obligatory changes start
adding more time to your fixed date project? You have two choices: tell the project sponsor that you can’t do
it and that your end date has to change or try crashing and see if you can claw back some time

4. When you are delayed: Delays early in the project necessarily have an impact on later work. You might
consider crashing your schedule as a way to make up for some of the lost time.

5. When the team is needed on other work: And now we reach the reasons that are to do with resources.
Your project simply might not be the most important thing happening in the business right now. Your team
might be needed on other projects – or at least a particular subject matter expert might be.Crashing your

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schedule is one way to free up certain resources more quickly. You could look at crashing a workstream so
that your critical resources are available for other tasks or projects. The alternative to this is that you let them
go (or are asked to let them go and can’t say no) and then find someone else to do the work. That’s a valid
route too but depending on how far you are through the project you might find it easier to simply crash and
deliver what you can with the original resources earlier.

6. When another resource is free: Sometimes the opposite happens – more resources suddenly become
available. More people for your project. The impact this can have on your schedule can go one of two ways:

• You add an additional resource, refocus the resource allocation and deliver on certain tasks faster
• You add an additional resource and it takes them ages to get up to speed so actually you don’t make
any time saving at all.
Only you will know which of these scenarios is most likely on your project, and who the extra resource is
matters hugely. A junior programmer who has no experience on your project is not likely to gain you much
time. But an experienced technical architect who has always kept half an eye on the project and now is
available to complete some solution design work alongside your existing resources should speed things up for
you dramatically.

7. When another resource needs training: Finally, you may face a situation where you have a resource who
is not contributing effectively to the project because they simply don’t have the skills. This hopefully doesn’t
happen to you too often – ideally as project managers we would select people for the project team who have
the skills we need to get the job done. However, I’m sure you are aware of situations where either ‘the skills
we need to get the job done’ were not defined or changed halfway through the project or we couldn’t get a
resource with the appropriate experience allocated to the project.

1.9 PERT Cost:

1.9.1: Introduction:

PERT cost is a managerial system for the planning and control of specific projects. It is a model thet enables
the managers to determine what must be done, how to schedule activities, what the best allocation of
resources will be, how much of the project will cost, and how to minimize the total costs. When planning is
completed, the plan becomes a standard against which to measure progress and deviation. Management by
exception is taken on those activities that exceed their allowed margin of error. This system is applicable to
any project that has specific beginning and ending point. In PERT COST, both cost and schedule are planned
and controlled on a common basis. This interrelation not only permits more accurate measurement of progress
but also enables managers to appraise more realistically the consequences of alternative course of action.

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1.9.2: Definition:

➢ “PERT cost is a management tool used to optimize the mix of time, resources, and cost for activities
having a definite beginning and end.”

1.9.3: Terminology:

❖ Project cost: in order to include the cost aspects in project scheduling we must first define the cost
duration relationships for various activities in the project. The total cost of any project comprises
direct and indirect costs.
❖ Direct cost: this cost is directly depends upon the amount of resources in the execution of individual
activities manpower loading materials consumed etc. the direct cost increase if the activity duration is
to be reduced.
❖ Indirect cost: This cost is associated with overhead expenses such as managerial services, indirect
supplies, general administration etc.

1.9.4: Advantages of PERT Cost:

1. More Effective Planning: It provides a comprehensive planning discipline, which requires the
manager to do careful, detailed planning. By aiming at the end objective, all activities and decisions
are co-ordinate toward the most effective, efficient and economical way of completing the total project
under the given constraints.
2. Show Relationships: All activities are related to achieving to each other is identified. This
relationship determines whether a group of activities must be carried out in series or may be carried
out in parallel. One way of shortening the overall project time is to maximize the concurrency of
operations. Resources for each activity are constrained by the time and cost limitations for the project.
Within these outside constrains resources will be related to achieve the time, cost and performance
goals of the activity at the minimum cost.
3. Pinpoints Problem areas: As the above relationship is worked out many problems will be recognized
and solved before they become crisis. During execution, an imbalance in the interrelationships will
quickly pinpoint problem areas because time resources, or cost schedules will not be met.
4. Improves Communication: The manager learns of the critical areas by doing his homework on the
PERT COST model. This gives him the specific facts and figures he needs to properly explain the
situation to subordinates in order to work out the needed solution. He is also better prepared to justify
requests to higher authority for additional resources.
5. Better Resource allocation: Manpower, materials, equipments, money and time can all be related to
each other on this model. The optimum mix will be that which achieves the time and performance
objectives at the least total cost. The plan can be organized to best use scarce RESOURCES. The plan
may even have to be built around the use of scarce resources.

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 6. Provides simulation model: The use of the PERT COST model is in fact a simulation of what
management expects to happen. Changes and alternative courses of action may be worked out on the
model to determine their overall effect on the project, the effects of uncontrollable forces can be
analyzed and contingency plans prepared.
7. Management by exception: PERT Cost identifies the critical path of operations, and sets parameters
on other activities which limit their slippage to a specified amount. Management needs to watch the
critical path closely, but the other activities get attention only when they exceed their margins of slack.
8. More effective control: Management effort is concentrated on the sensitive areas which effect project
goals. The detailed planning and discussion, the reduction of the plan to writing, and the defining of
individual responsibilities, gets everyone on the right track to start with. The completed PERT Cost
model then becomes the standard against which to compare individual performance in the methods
and rate of project accomplishment.
9. Focuses on cost: This model gives management an effective tool for focusing on the cost of projects.
The common denominator of all decisions is cost, and the ultimate output of the model is the project
cost. During the planning and execution phases, projected and actual costs can be compared with the
value of the end item or the imposed budget constraints. This will allow management to take timely
corrective action or seek additional resources prior to crisis.

The PERT Cost model can also be used to develop a proposed project to determine its feasibility, cost
and time factor.

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