Network Analysis -

Project Management
 Project Management
 Used to manage large complex projects

 Has three phases:

1. Project planning
2. Project scheduling
3. Project controlling
 Phase 1: Project Planning
1. What is the project goal or objective?
2. What are the activities (or tasks) involved?
3. How are activities linked?
4. How much time required for each activity?
5. What resources are required for each
activity?
 Phase 2: Project Scheduling
1. When will the entire project be completed?
2. What is the scheduled start and end time for
each activity?
3. Which are the “critical” activities?
4. Which are the noncritical activities?
5. How late can noncritical activities be without
delaying the project?
6. After accounting for uncertainty, what is the
probability of completing the project by a
specific deadline?
 Project Controlling
 Control of large projects involves close
monitoring of schedules, resources, and budgets.
 Questions to be answered:
 At any particular date or time, is project on schedule,
behind schedule, or ahead of schedule?
 At any particular date or time, is money spent on
project equal to, less than, or greater than budgeted
amount?
 Are there enough resources available to finish project
on time?
 If project is to be finished in shorter amount of time,
what is the best way to accomplish this at least cost?
 Project Networks
 Once project mission or goal has been clearly
specified, the first issues to address is the project
planning.

 Identify activities that constitute the project,

precedence relationships between these activities, and
time and other resources required for each activity.

 These activities and precedence relationships are

demonstrated graphically in an activity network
Work Breakdown Structure (WBS)
Divides the project into its various
subcomponents and defines hierarchical
levels of detail

Level
1 Project
2 Major tasks in project
3 Subtasks in major tasks
4 Activities to be completed
 Project Scheduling Phase
Commonly used techniques:

 Programme Evaluation and Review

Technique (PERT)

 Critical Path Method (CPM)

Example

What is the sum of activity times?

 Drawing the Project Network

 AON – Activity on Node networks show

each activity as a node and arcs show the
immediate predecessor activities
 AOA – Activity on Arc networks show
each activity as an arc, and the nodes
represent the starting and ending points
We will use the AON method
AON Diagram
 Determining The Project Schedule
 Once project network has been drawn to show all
activities and precedence relationships, determine
project schedule.
 This includes the earliest time an activity can start
(ES) and finish (EF) without violating the precedence
relationships. All precedence relationships must be
honoured.
 After we have determined ALL the ES and EF, we
must now determine the latest time an activity can
start (LS), and finish (LF), without delaying the
project beyond its earliest possible finish.
 We then determine the slack for each activity
 Critical Path Time Computations
 To find the critical path, calculate two distinct starting and
ending times for each activity:
 ES = Earliest time at which an activity can start,
assuming all predecessors have been
completed.
 EF = Earliest time at which an activity can be
finished.
 LS = Latest time at which an activity can start so as
to not delay completion time of the entire project.
 LF = Latest time by which an activity has to finish
so as to not delay the completion time of the
entire project.
Forward Pass: Earliest Start & Finish Times

Backward Pass: Latest Start & Finish Times

ES EF

Activity Time

LS LF
Forward Pass: Earliest Start and Finish Times
Forward Pass: Earliest Start and Finish Times
Backward Pass: Latest Start and Finish Times
Backward Pass: Latest Start and Finish Times
 Slack Time and Critical Path(s)
 Slack is the length of time an activity can
be delayed without delaying the project
Slack = LS – ES or LF – EF

 Activitieswith 0 slack are Critical Activities

 The Critical Path is a continuous path
through the network from start to finish that
include only critical activities. There are NO
gaps or breaks between activities.
Project Schedule and Slack Times

Slack = LS – ES or LF – EF
 Critical Path and Slack Times
Critical Path: A→ C → E → G → H: ECT = 15 Weeks
 Variability in Activity Times

 Activity times are usually estimates that

are subject to uncertainty
 Approaches to variability:
1. Build “buffers” into activity times
2. PERT – probability based
3. Computer simulation
 PERT Analysis
 Uses3 time estimates for each activity
Optimistic time (a)
Pessimistic time (b)
Most likely time (m)

 These estimates are used to calculate an

expected value and variance for each
activity (based on the Beta distribution)
 Expected Time E[T] and Variance V[T]

a  4m  b (b  a) 2
E[T ]  V [T ]   
2
6 36
Project Variance and Standard Deviation
 Project variance (σp2) is the sum of the
variances of the CRITICAL activities only
= ∑ (variances of all critical path activities)
σp2 = 0.11 + 0.11 + 1.0 + 1.78 + 0.11
= 3.11
 Project standard deviation (σp)
= SQRT (Project variance)
σp = SQRT ( 3.11) = 1.76
 Probability of Project Completion
 What is the probability of finishing the
project within 16 weeks?
 Assumptions:
 Project duration is normally distributed
 Activity times are independent
 Normal distribution parameters:
μp = expected completion time= 15 weeks
σp = proj standard deviation = 1.76 weeks
 Normal Probability Calculations
x 16  15 1
Z    0.57
 1.76 1.76
This means 16 weeks is 0.57 standard
deviations above the mean of 15 weeks.
Z(0.57) = 0.2157. Add 0.5 to get 0.7157
Prob (proj completion < 16 weeks) = 0.7157
Acti Immediate
vity Predecessors a m b
A -- 2 4 7
Required
B A 3 6 10
C A 1 2 3 1. Draw The Project Networks

D B 2 4 6 2. Determine the Expected Times and

Variances
E B 2 3 5
3. Determine the activity schedule (ES, EF,
F B, C 3 4 6
LS, LF, Slack) – On the Network or Table
G B 1 2 4
4. Identify the critical activities & State the
H F 2 3 4 critical paths
I F, H 1 1.5 2 5. What times must be set such that there is
J I 2 3 4 a guaranteed 90% time of completion?
K D, E 4 7 10 6. Find the probability that the project will
be completed 2 days earlier than the
expected duration?
 Project Duration for a Given Probability
• What time must be set to ensure a 99%
chance of completion within that time?
• This is the inverse transformation.
• The Z value that corresponds to an area of
0.49 is 2.33
• Project duration = σZ + μ ;(σ = 1.76; Μ = 15)
• Time = 1.76*2.33 + 15
• Time = 19.1008 weeks
 Consider The Following Projects
 Draw The Project Networks
 Determine the Expected Times and Variances
 Determine the activity schedule (ES, EF, LS, LF, Slack)
 Identify the critical activities
 State the critical paths
 What times must be set such that there is a guaranteed
90% (and 99%) time of completion?
 What is the probability that project 1 will be completed
within 20 (and also 24) days?
 What is the probability that project 2 will be done
within 70 (and also between 72 and 80; also between 60
and 75) days?
 Immediate
Activity Predecessors a m b
A -- 2 4 7
B A 3 6 10
PROJECT 1

C A 1 2 3
D B 2 4 6
E B 2 3 5
F B, C 3 4 6
G B 1 2 4
H F 2 3 4
I F, H 1 1.5 2
J I 2 3 4
K D, E 4 7 10
 Immediate
Activity Predecessors a m b
A – 8 10 12
PROJECT 2

B – 6 7 9
C – 3 3 4
D A 10 20 30
E C 6 7 8
F B, D, E 9 10 11
G B, D, E 6 7 10
H F 14 15 16
I F 10 11 13
J G, H 6 7 8
K I, J 4 7 8
L G, H 1 2 4
 Activity Immediate Predecessors
A –
B –
PROJECT 3

C A
D B
E B
F B, C
G B
H F
I F, H
J I
K D, E
 Activity Immediate
Predecessors
(a) (m) (b)
–
PROJECT 4

A 3 6 8
B A 5 8 10
C A 5 6 8
D B, C 1 2 4
E D 7 11 17
F D 7 9 12
G D 6 8 9
H F, G 3 4 7
I E, F, H 3 5 7
 Activity Predecessors Normal Time
A 5
B 6
PROJECT 5

C A 4
D A, B 3
E B 5
F C, D 2
G E 4
H E, G 2
I F, H 3
J G 2
K I, J 5
 Activity on Node (AON) Network Project 1

• All activities have been drawn, but we must clearly

identify the finish of the project. Notice that activities
G, J and K have no successor activities, therefore they
are all terminal (finish) activities. All these must be
represented at the finish (dummy)
Finish
K
B D
A J
C E

G
H

F
I