Industrial Management Notes

Introduction
1. Define Organization
An organization is a group of individuals working together in a structured
and coordinated way to achieve common objectives. It involves allocating
tasks, defining roles, and establishing hierarchies to ensure efficient
operations and goal achievement.

2. Difference Between Industrial Management and Product

Management
Aspect Industrial Management Product Management
Definit Focuses on the overall Focuses on the lifecycle of a
ion management of industrial product, including
processes, resources, and development, launch,
operations to ensure efficiency marketing, and
and productivity. improvement.
Scope Broad, encompassing production, Narrower, dealing
inventory, supply chain, quality specifically with one or more
control, and workforce products and their market
management. success.
Key Optimizing industrial processes, Delivering a successful
Object reducing costs, and ensuring product that meets customer
ives smooth operation. needs and achieves business
goals.
Tools Techniques like Six Sigma, Lean Agile methodologies,
Used Manufacturing, and Total Quality product roadmaps, and
Management (TQM). customer feedback tools.
Focus Internal operations of a business External customer needs
Area or factory. and product-market fit.

3. Difference Between "Strike" and "Lockout"

Aspe Strike Lockout
ct
Defin A work stoppage initiated by A work stoppage initiated by
ition employees to demand better the employer to enforce terms
wages, working conditions, or or conditions of employment.
other rights.
Initia Employees (or their unions). Employers or management.
tor
Purp To pressure employers to meet To pressure employees to
ose specific demands. accept specific terms.
Legal Requires following legal Subject to legal regulations but
ity procedures in most countries. initiated by management.
Effec Disrupts production and Suspends production by
t operations due to workforce preventing employees from
absence. working.

4. Difference Between Line Organization and Functional

Organization
Aspect Line Organization Functional Organization
Definitio A structure where authority A structure where authority is
n flows vertically from top to divided based on specialization,
bottom in a clear chain of and employees report to
command. multiple managers.
Chain of Single, clear, and direct Multiple lines of authority based
Comman chain of command. on functions.
d
Specializ Generalized roles with High specialization with specific
ation broader responsibilities. functional expertise.
Decision- Centralized at higher levels Decentralized, involving
Making of management. functional managers.
Suitabilit Smaller organizations or Larger organizations with
y those with simple processes. complex and diverse activities.
Advanta Simplicity, clarity, and faster Better expertise, flexibility, and
ges decision-making. utilization of specialists.
Disadvan Overburdening of managers, Confusion due to multiple
tages lack of specialization. reporting lines, potential
conflicts.

1. Organizational Culture and Climate

Organizational Culture:
 Refers to the shared values, beliefs, customs, practices, and behaviors
that define the social and psychological environment of an
organization.
 It shapes how employees interact, how decisions are made, and the
overall work environment.
  Components include:
o Artifacts: Visible aspects like dress code, office layout, and
rituals.
o Values: Shared principles or standards.
o Assumptions: Unspoken, deeply ingrained behaviors.
Organizational Climate:
 Refers to the perception of the work environment as experienced by
employees.
 It is influenced by the culture but focuses on how employees feel about
their roles, relationships, and organizational processes.
 Key aspects include:
o Job satisfaction.
o Interpersonal relationships.
o Leadership and communication styles.
Difference:
 Culture is more deep-rooted and stable, while climate is dynamic and
reflects the current mood or feelings within the organization.

2. What is a System? Explain its Classification

Definition of System: A system is a set of interrelated components or
elements that work together to achieve a specific goal. It operates within an
environment, accepts inputs, processes them, and generates outputs.
Classification of Systems:
1. Based on Nature:
o Physical Systems: Tangible, like machines or computers.
o Abstract Systems: Intangible, like software or theoretical
models.
2. Based on Purpose:
o Open Systems: Interact with the environment (e.g., businesses).
o Closed Systems: Do not interact with the environment (e.g.,
mechanical clocks).
 3. Based on Complexity:
o Simple Systems: Few components, easy to manage.
o Complex Systems: Many interdependent parts (e.g.,
ecosystems).
4. Based on Behavior:
o Static Systems: No change over time (e.g., bridges).
o Dynamic Systems: Change over time (e.g., economic systems).

3. Basic Elements of Management

1. Planning: Setting objectives and determining the best course of
action to achieve them.
2. Organizing: Allocating resources, assigning tasks, and establishing
procedures.
3. Staffing: Recruiting, training, and maintaining a competent workforce.
4. Directing: Leading, motivating, and influencing employees to achieve
goals.
5. Controlling: Monitoring performance, comparing it with goals, and
making adjustments as needed.

4. What is Management? Main Functions of Management

Definition of Management: Management is the process of planning,
organizing, directing, and controlling resources (human, financial, material)
to achieve organizational goals efficiently and effectively.
Main Functions of Management:
1. Planning:
o Defining goals and deciding the actions required to achieve them.
o Examples: Setting a production target or budgeting.
2. Organizing:
o Structuring resources and activities to accomplish objectives.
o Examples: Creating departments, defining roles.
 3. Staffing:
o Ensuring the organization is adequately staffed with the right
people.
o Examples: Hiring, training, and retaining talent.
4. Directing:
o Guiding and supervising employees to achieve objectives.
o Examples: Leadership, communication, and motivation.
5. Controlling:
o Ensuring that organizational goals are met by monitoring
performance.
o Examples: Quality control, performance reviews.
7. What is Organization Structure?
Definition: An organization structure is a framework that defines the
hierarchy, roles, responsibilities, and communication flow within an
organization. It determines how activities such as task allocation,
coordination, and supervision are directed to achieve organizational goals.

Types of Organization Structure:

1. Line Organization:
o Simple structure with a clear chain of command.
o Advantages: Simplicity, clear authority, and quick decision-
making.
o Disadvantages: Overburdened managers, lack of specialization.
2. Functional Organization:
o Groups employees based on specialized functions (e.g., HR,
Marketing).
o Advantages: Specialization, efficient resource utilization.
o Disadvantages: Lack of coordination, potential conflicts between
departments.
3. Matrix Organization:
 o Combines functional and project-based structures, with dual
reporting lines.
o Advantages: Flexibility, improved communication.
o Disadvantages: Complex authority structure, potential
confusion.
4. Divisional Organization:
o Divides the organization based on products, regions, or markets.
o Advantages: Focus on specific markets/products, better
accountability.
o Disadvantages: Duplication of resources, higher costs.
5. Flat Organization:
o Fewer levels of management with wide spans of control.
o Advantages: Faster decision-making, better employee
involvement.
o Disadvantages: Overwhelmed managers, less supervision.

8. Concept of Delegation of Authority

Definition: Delegation of authority is the process of assigning decision-
making power from higher levels of management to lower levels. It involves
transferring responsibility for tasks while retaining accountability for
outcomes.
Key Elements:
1. Authority: The power to make decisions and allocate resources.
2. Responsibility: Obligation to complete the assigned task.
3. Accountability: The subordinate's duty to report task progress and
outcomes to the superior.
Importance:
 Enhances efficiency.
 Develops managerial skills.
 Promotes employee motivation and trust.
a) Difference Between Authority and Responsibility
Aspect Authority Responsibility
DefinitiThe power to give orders and The obligation to perform
on make decisions. assigned tasks.
Flow Flows downward from superior to Flows upward from
subordinate. subordinate to superior.
Scope Includes decision-making and Focuses on task execution.
resource allocation.
Delegat Can be delegated to others. Cannot be delegated; it
ion must be fulfilled.
Account Requires justification for the use Requires reporting task
ability of authority. outcomes.

b) Process of Creating an Organization

1. Identifying Objectives:
o Define the purpose, goals, and vision of the organization.
2. Designing Roles and Responsibilities:
o Identify tasks and assign responsibilities to achieve objectives.
3. Grouping Tasks:
o Form departments or teams based on functions, products, or
geography.
4. Establishing Hierarchy:
o Define authority relationships and reporting structures.
5. Delegating Authority:
o Allocate decision-making power to appropriate levels.
6. Defining Communication Channels:
o Establish clear lines of communication for coordination.
7. Implementing the Structure:
o Put the organizational framework into practice and start
operations.
8. Monitoring and Adjusting:
o Regularly evaluate the structure's effectiveness and make
necessary adjustments.
2. a) Types of Formal Organization
A formal organization is a structured framework created by management
to achieve specific goals and objectives. It operates based on clearly
defined roles, responsibilities, and authority. The main types are:
1. Line Organization:
o Authority flows directly from top to bottom in a hierarchical
manner.
o Example: Military or small businesses.
o Advantages: Simplicity, clarity, quick decision-making.
o Disadvantages: Overburdened managers, lack of specialization.
2. Functional Organization:
o Activities are grouped based on specialized functions (e.g.,
marketing, production, finance).
o Example: Large corporations like Google.
o Advantages: Specialization, efficiency.
o Disadvantages: Conflicts among departments, coordination
challenges.
3. Line and Staff Organization:
o Combines the simplicity of line organization with staff experts
who provide advice.
o Example: Large manufacturing firms.
o Advantages: Expert guidance, balanced structure.
o Disadvantages: Potential authority conflicts between line and
staff.
4. Project or Matrix Organization:
o Combines functional and project structures, allowing employees
to report to multiple managers.
o Example: IT companies handling multiple projects
simultaneously.
o Advantages: Flexibility, improved resource utilization.
 o Disadvantages: Complex authority structure, potential
confusion.

2. b) Short Note on Informal Organization

An informal organization is a network of personal and social relationships
that arise spontaneously among employees within the formal organization.
It is not officially planned or documented but significantly influences the
organization's functioning.
Characteristics:
 Unstructured and evolves naturally.
 Based on shared interests, values, and friendships.
 Lacks a defined hierarchy or rules.
Importance:
 Enhances communication and collaboration.
 Builds a sense of belonging and trust.
 Helps in resolving conflicts informally.
Limitations:
 Can create resistance to formal decisions.
 Might lead to favoritism or cliques.
 Difficult to control or manage by authorities.

3. a) What is Job Evaluation?

Definition:
Job evaluation is a systematic process of assessing the relative worth of jobs
within an organization. It helps determine fair and equitable pay by
comparing job roles based on factors like skill, effort, responsibility, and
working conditions.
Methods of Job Evaluation:
1. Ranking Method: Jobs are ranked in order of importance.
2. Point System: Points are assigned to various job factors, and total
points determine the job's value.
 3. Factor Comparison: Jobs are compared based on key factors and
assigned monetary values.
4. Classification Method: Jobs are grouped into predefined grades or
categories.

3. b) Importance of Job Evaluation

1. Equity in Pay: Ensures employees are paid fairly based on their job's
value.
2. Attracting Talent: Helps in offering competitive salaries to attract
skilled professionals.
3. Employee Satisfaction: Reduces grievances related to salary
discrepancies.
4. Budget Control: Provides a systematic basis for determining payroll.
5. Legal Compliance: Assists in meeting labor laws and avoiding wage
discrimination.

3. c) Advantages and Limitations of Job Evaluation

Advantages:
1. Fair Compensation: Establishes a logical and just pay structure.
2. Improved Morale: Reduces wage-related disputes and builds trust.
3. Systematic Process: Provides a standardized approach to salary
decisions.
4. Career Planning: Helps employees understand growth opportunities
within the organization.
5. Focus on Objectivity: Minimizes bias in salary determination.
Limitations:
1. Time-Consuming: Requires significant time and resources to
implement.
2. Subjectivity in Judgments: Human bias may influence the
evaluation process.
3. Resistance to Change: Employees may resist changes in pay
structure.
 4. Costly Implementation: Involves expenses for external consultants
or training internal teams.
5. Not Suitable for All Jobs: Complex jobs may not fit into standard
evaluation frameworks.
4. Concept of Job Satisfaction
Definition:
Job satisfaction refers to the level of contentment employees feel about
their work, which is influenced by their job roles, work environment,
compensation, and interpersonal relationships. It reflects how employees
perceive and evaluate their job experience.

Importance of Job Satisfaction in an Organization:

1. Higher Productivity: Satisfied employees are more motivated and
efficient, leading to better performance.
2. Employee Retention: Reduces turnover rates, saving recruitment
and training costs.
3. Improved Morale: Creates a positive work environment, fostering
teamwork and collaboration.
4. Better Customer Satisfaction: Happy employees deliver superior
customer service.
5. Innovation and Creativity: Satisfied employees are more likely to
contribute new ideas and solutions.

Factors Affecting Job Satisfaction:

1. Work Environment: Clean, safe, and comfortable workplace
conditions.
2. Compensation: Fair and competitive salary, along with benefits and
incentives.
3. Job Security: Assurance of stable employment.
4. Work-Life Balance: Flexible working hours and supportive policies.
5. Recognition and Rewards: Appreciation for efforts and
achievements.
 6. Relationship with Management: Supportive and approachable
leaders.
7. Career Growth: Opportunities for promotion, training, and skill
development.
8. Nature of Work: Alignment of tasks with employee interests and
skills.

5. Basic Steps in the Formation of an Organization

1. Identifying Objectives:
o Define the purpose, vision, and mission of the organization.
o Example: Providing high-quality IT services or manufacturing eco-
friendly products.
2. Determining Activities:
o List tasks and operations required to achieve the objectives.
o Example: Marketing, production, finance, and human resources.
3. Grouping Activities:
o Organize related tasks into departments or teams.
o Example: Combining sales and customer service into a marketing
department.
4. Establishing Authority Relationships:
o Create a hierarchy defining authority, roles, and responsibilities.
o Example: CEO, managers, and team leads.
5. Allocating Resources:
o Assign necessary resources (human, financial, and material) to
each unit.
o Example: Budget allocation for projects or hiring skilled staff.
6. Designing Communication Channels:
o Establish clear lines of communication for effective coordination.
o Example: Weekly meetings, reporting systems.
7. Implementing the Structure:
 o Put the designed framework into action and start operations.
o Example: Launching departments and assigning tasks.
8. Monitoring and Adjusting:
o Regularly evaluate the structure's effectiveness and make
necessary changes.
o Example: Modifying roles or merging departments based on
organizational needs.
6. a) Concept of Industrial Relations
Definition:
Industrial relations refer to the relationship between employers, employees,
and the government in an industrial setting. It involves the interactions,
rules, and practices that govern workplace dynamics, aiming to ensure
harmony, productivity, and fairness.
Key Components:
1. Employer-Employee Relationship: Includes hiring, wages, working
conditions, and dispute resolution.
2. Role of Trade Unions: Employee representation and collective
bargaining.
3. Government Involvement: Laws and regulations ensuring
compliance and resolving conflicts.
Objective:
To foster a cooperative and productive work environment, resolve disputes
amicably, and maintain industrial peace.

6. b) Factors Affecting Industrial Relations

1. Economic Factors:
o Wage levels, working conditions, and cost of living.
o Financial stability of the organization impacts employer-employee
relations.
2. Legal and Political Factors:
o Labor laws, government policies, and regulations.
 o Political stability and governance directly influence industrial
relations.
3. Social and Cultural Factors:
o Employee expectations, social norms, and cultural diversity.
o Discrimination or lack of inclusivity can affect relations.
4. Technological Factors:
o Introduction of new technology can lead to resistance or
retraining needs.
o Automation may result in job insecurity among workers.
5. Psychological Factors:
o Employee morale, motivation, and job satisfaction.
o Leadership style and communication play a critical role.
6. Organizational Factors:
o Policies on promotions, transfers, and grievance handling.
o Transparency and trust in management decisions.
7. Role of Trade Unions:
o Their approach to negotiations and collective bargaining.
o Strong unions can impact workplace dynamics positively or
negatively.
8. Globalization and Competition:
o Exposure to global markets increases pressure on maintaining
efficient relations.
o Competitive industries often face higher labor disputes.
Conclusion:
Effective management of these factors ensures harmonious industrial
relations, contributing to the organization's success and employee well-
being.
1. a) Difference Between Authority and Responsibility
Aspect Authority Responsibility
Definiti The power to give orders and The obligation to perform
on make decisions. assigned tasks.
Flow Flows downward from Flows upward from
superior to subordinate. subordinate to superior.
Delegat Can be delegated to others. Cannot be delegated; it
ion must be fulfilled.
Account Requires justification for the Requires reporting task
ability use of authority. outcomes.

1. b) Process of Creating an Organization

1. Identifying Objectives:
o Define the purpose, vision, and mission of the organization.
o Example: Delivering high-quality products or services.
2. Determining Activities:
o List essential tasks and operations needed to achieve objectives.
o Example: Marketing, production, and financial planning.
3. Grouping Activities:
o Group similar tasks into departments or units.
o Example: Sales and customer service combined under marketing.
4. Defining Roles and Responsibilities:
o Assign clear responsibilities and authority to individuals or teams.
o Example: Managers and team leaders.
5. Establishing Hierarchy:
o Create a structure with defined authority and reporting
relationships.
o Example: CEO at the top, followed by managers and employees.
6. Allocating Resources:
o Assign resources such as manpower, budget, and tools to
departments.
o Example: Providing funds for marketing campaigns.
7. Designing Communication Channels:
 o Establish efficient communication systems for coordination.
o Example: Email, meetings, and reporting systems.
8. Implementation:
o Start operations based on the designed structure.
o Example: Launching the organization with defined roles.
9. Monitoring and Evaluation:
o Regularly review the structure for effectiveness and make
adjustments if needed.
o Example: Restructuring teams based on performance.

2. a) Types of Formal Organization

1. Line Organization:
o Authority flows directly from top to bottom in a hierarchical
manner.
o Advantages: Simplicity, clear authority, quick decisions.
o Disadvantages: Overburdened managers, lack of specialization.
2. Functional Organization:
o Groups employees based on specialized functions (e.g.,
marketing, HR).
o Advantages: Specialization, efficient resource use.
o Disadvantages: Potential conflicts among departments.
3. Line and Staff Organization:
o Combines line authority with staff advisors for expert guidance.
o Advantages: Balanced structure, better decisions.
o Disadvantages: Authority conflicts between line and staff.
4. Matrix Organization:
o Combines functional and project structures with dual reporting
lines.
o Advantages: Flexibility, better resource utilization.
 o Disadvantages: Complex authority structure, potential
confusion.

2. b) Short Note on Informal Organization

An informal organization is a network of personal and social relationships
that naturally form among employees within the workplace. Unlike formal
organizations, it is not officially planned or structured.
Characteristics:
 Evolves spontaneously based on friendships and common interests.
 Lacks defined rules, roles, and authority.
Importance:
 Promotes collaboration and teamwork.
 Improves communication and trust among employees.
 Serves as a support system during conflicts or stress.
Limitations:
 Can lead to favoritism or cliques.
 Might resist formal decisions or policies.
 Difficult for management to control or influence.

3. a) What is Job Evaluation?

Definition:
Job evaluation is a systematic process to determine the relative value of a
job in an organization. It assesses jobs based on factors like skills, effort,
responsibility, and working conditions to establish fair compensation.
Purpose:
To create an equitable pay structure by comparing roles within the
organization.

3. b) Importance of Job Evaluation

1. Equity in Pay: Ensures fair and just compensation across roles.
 2. Clarity in Job Hierarchy: Helps establish a clear job ranking
structure.
3. Motivates Employees: Encourages productivity by ensuring fair
rewards.
4. Attracts Talent: Provides competitive salaries to attract skilled
professionals.
5. Legal Compliance: Prevents wage discrimination and ensures
alignment with labor laws.
6. Effective Budgeting: Guides payroll management and resource
allocation.

3. c) Advantages and Limitations of Job Evaluation

Advantages:
1. Fair Compensation: Eliminates wage disparities by standardizing pay
structures.
2. Reduces Disputes: Minimizes conflicts related to salaries and
promotions.
3. Improves Morale: Builds trust by ensuring transparency in pay
decisions.
4. Career Planning: Helps employees understand growth opportunities.
5. Systematic Approach: Provides a structured method for evaluating
jobs.
Limitations:
1. Time-Consuming: Requires extensive analysis and planning.
2. Subjectivity: Personal bias may affect evaluation results.
3. Costly: Involves training, tools, and consultants.
4. Resistance to Change: Employees may resist pay adjustments or
changes in job ranks.
5. Complex Jobs: Difficult to evaluate roles with overlapping
responsibilities.

Concept of Job Satisfaction

Definition:
Job satisfaction is the degree of contentment employees feel about their job.
It reflects their attitude toward work, the workplace, and the overall
employment experience.

Importance of Employee Satisfaction

1. Enhanced Productivity: Satisfied employees are motivated to
perform better.
2. Reduced Turnover: Decreases resignation rates and associated costs.
3. Improved Workplace Morale: Promotes a positive organizational
culture.
4. Better Customer Service: Leads to happier customers through
better interactions.
5. Increased Innovation: Encourages creative problem-solving and
idea-sharing.
6. Organizational Loyalty: Builds long-term commitment to the
organization.

Factors Affecting Job Satisfaction

1. Work Environment: Clean, safe, and conducive workspaces.
2. Salary and Benefits: Competitive pay and attractive benefits
packages.
3. Job Security: Assurance of stable employment.
4. Work-Life Balance: Flexible schedules and manageable workloads.
5. Recognition and Rewards: Appreciation for efforts and
achievements.
6. Career Growth: Opportunities for promotions, training, and
development.
7. Leadership Style: Supportive and approachable managers.
8. Nature of Work: Alignment with personal interests and skills.
By addressing these factors, organizations can foster a satisfied and
productive workforce.
5. Basic Steps in the Formation of an Organization
1. Identifying Objectives:
o Clearly define the goals, vision, and mission of the organization.
o Example: Producing eco-friendly products or offering IT services.
2. Determining Activities:
o Identify the tasks and operations required to achieve the
objectives.
o Example: Marketing, production, customer service.
3. Grouping Activities:
o Combine similar tasks into departments or units.
o Example: Grouping accounting and budgeting under the finance
department.
4. Defining Roles and Responsibilities:
o Assign specific roles and responsibilities to individuals or teams.
o Example: A team leader for every department.
5. Establishing a Hierarchy:
o Create a chain of command to ensure proper authority and
accountability.
o Example: Manager > Team Leader > Employees.
6. Allocating Resources:
o Distribute financial, human, and material resources among the
departments.
o Example: Allocating a budget for marketing campaigns.
7. Designing Communication Channels:
o Establish effective communication systems for coordination.
o Example: Weekly meetings, reporting mechanisms.
8. Implementation:
o Put the organizational structure into action by initiating
operations.
o Example: Starting production and hiring staff.
 9. Monitoring and Adjusting:
o Regularly evaluate the organizational structure and make
necessary adjustments.
o Example: Restructuring departments or redefining roles for
efficiency.

6. a) Concept of Industrial Relations

Definition:
Industrial relations refer to the relationship between employers, employees,
and trade unions, focusing on resolving conflicts and fostering cooperation
in the workplace. It encompasses the interactions, regulations, and systems
that influence workplace harmony and productivity.
Key Components:
1. Employer-Employee Relationship: Agreements on wages, working
hours, and conditions.
2. Role of Trade Unions: Representing workers' interests through
collective bargaining.
3. Government Involvement: Implementing labor laws and mediating
disputes.
Objective:
To maintain industrial peace, ensure fair treatment, and promote mutual
trust.

6. b) Factors Affecting Industrial Relations

1. Economic Factors:
o Wage levels, cost of living, and economic stability.
o Financial health of the organization affects relations.
2. Legal and Political Factors:
o Labor laws, government policies, and union regulations.
o Political stability influences workplace harmony.
3. Social and Cultural Factors:
o Social norms, values, and employee diversity.
 o Cultural differences may lead to misunderstandings.
4. Technological Factors:
o Adoption of new technologies may create resistance or require
retraining.
o Job automation can lead to insecurity among workers.
5. Organizational Policies:
o Rules regarding promotions, benefits, and grievances.
o Fair and transparent policies build trust.
6. Psychological Factors:
o Employee morale, motivation, and job satisfaction.
o Leadership style and management behavior impact relations.
7. Trade Union Role:
o The approach to collective bargaining and conflict resolution.
o Strong or militant unions may disrupt harmony.
8. Globalization and Competition:
o Exposure to global markets increases pressures for efficiency.
o Competitive industries often face labor disputes.
Conclusion:
Addressing these factors effectively ensures harmonious industrial relations
and enhances organizational performance.

CPM AND PERT

Here are the answers to the CPM and PERT questions in detail and
short format:
1. Which type of organization is temporary by nature?
Detailed: A project is a temporary endeavor undertaken to create a unique
product, service, or result. It has a defined start and end date, 1 and
resources are allocated specifically for its duration.
Short: A project.
2. What is the symbol for activity in a network diagram?
Detailed: In a network diagram, activities are typically represented by
arrows. The length of the arrow may sometimes indicate the duration of the
activity.
Short: Arrows.
3. What is PERT Analysis?
Detailed: Program Evaluation and Review Technique (PERT) is a project
management tool used to analyze the task durations, dependencies, and
uncertainties in a project schedule. It helps identify the critical path and
estimate the project's completion time and potential delays.
Short: PERT is a project management tool for analyzing task durations,
dependencies, and uncertainties.
4. What is Master Scheduling?
Detailed: Master scheduling is a detailed plan that outlines the production
schedule for finished goods. It takes into account factors like demand
forecasts, available resources, and order commitments to ensure timely
production and efficient resource utilization.
Short: Master scheduling is a detailed production plan.
5. The expected time (Te) of a PERT activity in terms of optimistic
time (To), pessimistic time (Tp), and most likely time (Tm) is given 2
by
Detailed: The formula for calculating the expected time (Te) in PERT is:
Te = (To + 4Tm + Tp) / 6
Short: Te = (To + 4Tm + Tp) / 6
6. Define critical path in a network diagram.
Detailed: The critical path is the longest sequence of activities in a project
network. Any delay in these critical activities will directly impact the overall
project completion time.
Short: The critical path is the longest sequence of activities in a project
network.
Certainly, let's break down the answers and explanations for the remaining
questions on the page:
7. Which of the following is referred to as crash time?
Answer: (b) Time beyond which cost reduction is not possible.
Explanation: Crash time in project management refers to the minimum
possible time to complete an activity. It is the shortest duration achievable
through the application of additional resources or by expediting the work
process. Beyond the crash time, further reductions in activity duration are
not possible without incurring significant costs or compromising quality.
8. The proportion of profit to be retained for growth and to be
distributed among shareholders is decided through
Answer: (c) Dividend Decision.
Explanation: The dividend decision is a crucial aspect of financial
management for companies. It involves determining the portion of profits
that will be distributed to shareholders as dividends and the portion that will
be retained for reinvestment in the business for future growth.
9. PERT method of project scheduling is suitable for
Answer: (c) A spacecraft development project based on research.
Explanation: PERT (Program Evaluation and Review Technique) is
particularly well-suited for projects with high uncertainty and where activity
durations are estimated probabilistically. Spacecraft development projects
often involve complex research and development activities with inherent
uncertainties, making PERT a suitable tool for managing such projects.
10. Planning is
Answer: (a) Looking ahead.
Explanation: Planning is the process of defining goals, objectives, and
strategies for the future. It involves anticipating future events and
developing courses of action to achieve desired outcomes.
11. "Slack" refers to the difference between
Answer: (c) Early start time and late finish time.
Explanation: In project management, slack represents the amount of time
that an activity can be delayed without affecting the overall project
schedule. It is calculated as the difference between the late start time and
the early start time of an activity.
12. Difference between PERT and CPM
Answer: (b) PERT is probabilistic but CPM is not.
Explanation: The key difference between PERT and CPM (Critical Path
Method) lies in their approach to estimating activity durations. PERT
considers activity durations to be probabilistic, using optimistic, pessimistic,
and most likely estimates to calculate the expected duration. In contrast,
CPM assumes deterministic activity durations with known values.
13. Dummy activity in a project network diagram represents -

a) logical relationship

b) necessary delay

c) allocation of resources

Answer: b) necessary delay

Explanation:
 In a project network diagram, a dummy activity is used to represent a
logical relationship between activities that cannot be depicted by a
single arrow.
 It is a fictitious activity with zero duration and is used to:
o Maintain the correct sequence of activities when there is a
dependency but no actual work involved between them.
o Ensure the correct precedence relationships are shown in the
network diagram.
Therefore, a dummy activity primarily represents a necessary delay
or a logical constraint in the project schedule.
1. Six Basic Steps in PERT and CPM
1. Define the Project and Identify Activities:
o Break down the project into smaller tasks or activities.
2. Determine the Sequence of Activities:
o Identify dependencies and establish the order of execution.
3. Construct the Network Diagram:
 o Develop a visual representation of the project using nodes
(events) and arrows (activities).
4. Estimate the Time for Each Activity:
o Assign a duration for each task (single estimate for CPM, three
estimates for PERT).
5. Identify the Critical Path:
o Calculate the longest path through the network to determine the
project's minimum completion time.
6. Update the Project Plan:
o Monitor progress, adjust timelines, and account for any changes
in the project.

2. Distinction Between PERT and CPM

Aspect PERT CPM
Full Form Program Evaluation and Critical Path Method
Review Technique
Focus Time-based; used for projects Cost-based; used for projects
with uncertain durations. with known durations.
Nature of Deals with non-repetitive, Deals with repetitive,
Activities research-based projects. construction-based projects.
Time Three estimates: Optimistic, Single deterministic
Estimates Pessimistic, and Most Likely. estimate.
Critical Can vary due to time Fixed critical path.
Path uncertainty.
Usage Preferred for R&D and new Preferred for construction
product development. and production projects.

3. Definitions
a) Events:
 Definition: Points in a project network that represent the start or
completion of an activity.
 Example: Beginning of a task or completion of a milestone.
b) Activity:
 Definition: A task or operation that consumes time and resources in a
project.
 Example: Designing, coding, or testing in a software development
project.
c) Critical Activity:
 Definition: An activity that lies on the critical path, directly affecting
the project's completion time.
 Importance: Delay in a critical activity delays the entire project.
d) Dummy Activity:
 Definition: A placeholder activity that shows dependencies but
consumes no time or resources.
 Purpose: Used to maintain logical sequencing in the network diagram.
 Representation: Dashed line in network diagrams.
e) Non-Critical Activity:
 Definition: An activity that does not lie on the critical path and has
slack (flexible start or finish time).
 Significance: Delaying a non-critical activity won't delay the overall
project, as long as it stays within its slack.