AC 1103 – MANAGEMENT SCIENCE

Group 6: Jarina, Magalong, Patino, Mahinay, Torigoe

BSIA 1 – K (Group 11 M,W 03:00 PM - 04:30 PM)
Mr. Kaye Earvin L. Villaester

FOCUS NOTES: PROJECT SCHEDULING – PERT/CPM

INTRODUCTION
Managers are responsible for planning, scheduling, and controlling projects that are to
be tasked to a variety of departments and individuals. With the numerous or complex tasks that
the managers have to perform, the Program Evaluation and Review Technique (PERT) and
the Critical Path Method (CPM) can be used to make the manager’s job easier. They both
function in accordance to the manager’s tasks/projects.
★ COMMON APPLICATIONS:
1. Research and development of new products and processes
2. Construction of plants, buildings, and highways
3. Maintenance of large and complex equipment
4. Design and installation of new systems
★ PROBLEMS OF MANAGERS:
1. What is the total time to complete the project?
2. What are scheduled start and finish dates for each specific activity?
3. Which activities are “critical” and must be completed exactly as scheduled to keep the
project on schedule?
4. How long can “noncritical” activities be delayed before they cause and increase in the
total project completion time?
➔PERT- developed to handle uncertain activity times.
➜CPM- developed primarily for industrial projects for which activity times were certain and
variability was not a concern.
- identified trade-offs between time and cost for various project activities.

9.1 PROJECT SCHEDULING BASED ON EXPECTED ACTIVITY TIMES

 ➢ 1ST STEP: Develop a list of the activities that make up the project.

➢ 2ND STEP: Determine the immediate predecessor(s) for each activity in the
project.
➜Immediate predecessor- identifies the activities that must be completed immediately prior to
the start of that activity.
NOTE: Activities A and B do not have immediate predecessors, they can be started as soon
as the project begins.
★ SUMMARY OF ENTRIES:
1. Activities C, D, and E cannot be started until Activity A is completed.
2. Activity F cannot be started until Activity E has been completed.
3. Activity G cannot be started until Activities D and F have been completed.
4. Activity H cannot be started until Activities B and C have been completed.
5. Activity I cannot be started until Activities G and H have been completed.
6. The project is finished when Activity I is completed.
➢ 3RD STEP: Estimate the expected completion time for each activity.
➜Expected activity time- shows the expected number of weeks required to complete each
activity.
➢ 4TH STEP: Draw a project network depicting the activities and immediate
predecessors listed in steps 1 and 2.
➜Project network- graphical representation of the project.
- helps a manager visualize the activity relationships and provide a basis for
carrying out the PERT/CPM computation.
➜Critical path- determines the project completion time by analyzing the network.
- longest path.
➜Path- sequence of connected nodes that leads from the Start node to the Finish node.
Example: the sequence of nodes A-E-F-G-I in Figure 9.2
➜Critical activities- activities on the critical path.

➢ 5TH STEP: Use the project network and the activity time estimates to determine
the earliest start and the earliest finish time for each activity by making a forward
pass through the network. The earliest finish time for the last activity in the project
identifies the expected time required to complete the entire project.
Finding the earliest start time and the latest start time for all activities in the network. Let
ES = earliest start time for an activity
EF = earliest finish time for an activity
t = expected activity time
The earliest finish time for any activity is: EF = ES + t

Problem: What is the earliest finish time for Activity A?

Given: ES = 0 (starts as soon as the project starts)
t = 5 weeks
Solution: EF = ES + t
=0+5
=5

➜Earliest start time- equal to the largest of the earliest finish times for all its immediate
predecessors.
Problem: What is the earliest finish time for Activities B, C, and H?
Given: ACTIVITY B ACTIVITY C
ES = 0 ES = 5 (reliant to the EF for Activity A)
t =6 t=4
Solution: ACTIVITY B ACTIVITY C
EF = ES + t EF = ES + t
=0+6 =5+4
=6 =9
Given: ACTIVITY H
ES = 9 (reliant on which EF is the largest between Activity B and C)
t = 12
Solution: ACTIVITY H
EF = ES + t
= 9 + 12
= 21
NOTE: By continuing with the forward pass, the earliest start and finish time will be known for
each activity.
 ➢ 6TH STEP: Use the expected project completion time identified in step 5 as the
latest finish time for the last activity and make a backward pass through the
network to identify the latest start and latest finish time for each activity.
The expected completion time for the entire project is 26 weeks, we begin the backward pass
with a latest finish time of 26 for activity I. Once the latest finish time for an activity is known,
the latest start time for an activity can be computed as follows. Let
LS = latest start time for an activity
LF = latest finish time for an activity
Then: LS = LF - t
Problem: What is the latest start time for activity I?
Given: LF = 26
t=2
Solution: LS = LF - t
= 26 - 2
= 24

➜Latest finish time- smallest of the latest start times for all activities that immediately follow
the activity.
NOTE: In continuing the backward pass process, the results are shown below:
 ➢ 7TH STEP: Use the difference between the latest start time and the earliest start
time for each activity to determine the slack for each activity.
➜Slack- length of time an activity can be delayed without increasing the project completion
time.
It is computed as follows: Slack = LS - ES = LF - EF
Problem: What is the slack associated with Activity C?

Solution: Slack = LS - ES
=8-5
= 3 (weeks)
Conclusion: Activity C can be delayed up to 3 weeks, and the entire project can still be
completed in 26 weeks.
➢ 8TH STEP: Find the activities with zero slack; these are the critical activities.
Problem: What is the slack associated with Activity E?
Solution: Slack = LS - ES
=5-5
=0
Conclusion: Activity E has zero, or no, slack. Thus, this activity cannot be delayed without
increasing the completion time for the entire project.
➜Critical activities- activities with zero slack.
➢ 9TH STEP: Use the information from steps 5 and 6 to develop the activity schedule
for the project.
The start and finish times shown in Figure 9.6 can be used to develop a detailed start time and
finish time schedule for all activities. Shown below is the tabulated form of the information:
NOTE: The schedule above indicates the slack or delay that can be tolerated for the noncritical
activities before these activities will increase project completion time.

★ ANSWERS TO THE PROBLEMS OF MANAGERS:

1. What is the total time to complete the project?
Answer: The project can be completed in 26 weeks if each activity is completed on schedule.

2. What are scheduled start and finish dates for each specific activity?
Answer: The activity schedule (Table 9.2) shows the earliest start, latest start, earliest finish, and
latest finish times for each activity.

3. Which activities are “critical” and must be completed exactly as scheduled to

keep the project on schedule?
Answer: A, E, F, G, and I are the critical activities.
4. How long can “noncritical” activities be delayed before they cause and increase in
the total project completion time?
Answer: The activity schedule (Table 9.2) shows the slack associated with each activity.
9.2 PROJECT SCHEDULING CONSIDERING UNCERTAIN ACTIVITY TIMES

PURPOSE:
Project scheduling with uncertain activity times is used when the duration of tasks in a
project cannot be precisely predicted due to various uncertainties, such as resource availability,
weather, or technical issues. This method helps in planning and managing projects by:
➔ Accounting for variability in activity durations.
➔ Estimating the probability of meeting deadlines.
➔ Identifying the critical activities that influence the overall project timeline.
KEY COMPONENTS:
★ Uncertainty in Activity Times – Activity durations can vary, so three estimates are used
to represent uncertainty. These estimates help in calculating the expected duration and
the uncertainty (variance) of each activity in the project:
○ Optimistic Time (𝑎): The minimum activity time if everything progresses ideally.
(Best-case scenario)
○ Most probable time (𝑚): The most probable activity time under normal
conditions. (Most probable duration)
○ Pessimistic time (𝑏): The maximum activity time if substantial delays are
encountered. (Worst-case scenario)
2
★ Expected Time (𝑡) and Variance (σ )
○ Expected Time is calculated as a weighted average of the optimistic, most
probable, and pessimistic times:
𝑎 + 4𝑚 + 𝑏
𝑡= 6
○ Variance represents the uncertainty in the activity's duration:
2 𝑏−𝑎 2
σ =( 6
)
★ Critical Path Method (CPM) – this is used to identify the sequence of activities that
determines the project’s overall completion time. Activities on the critical path have zero
slack, meaning any delay in these tasks will delay the entire project.
★ Probability of Completion – The probability of completing the project by a specific
deadline can be calculated by considering the variability of activity durations. This is
typically done using the normal distribution and a z-score:
𝑑𝑒𝑎𝑑𝑙𝑖𝑛𝑒 − 𝑒𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑡𝑖𝑚𝑒
𝑧 = σ

DAUGHERTY PORTA-VAC PROJECT

➢ 1ST STEP: Define Activities and Immediate Predecessors

➢ 2ND STEP: Construct the Project Network

 ➢ 3RD STEP: Estimate Activity Times
Once the project network is developed, activity time estimates are needed to calculate
the total project duration and schedule activities.

For the Porta-Vac activities, Table 9.4 provides optimistic, most probable, and
pessimistic time estimates. Using activity A as an example:
➔ Optimistic time (𝑎): 4 weeks
➔ Most probable time (𝑚): 5 weeks
➔ Pessimistic time (𝑏): 12 weeks

➔ The expected time (𝑡) is calculated as:

𝑎 + 4𝑚 + 𝑏
𝑡= 6
➔ For activity A we have an average or expected time of:

4 + 4(5) + 12 36
𝑡𝐴 = 6
= 6
= 6 𝑤𝑒𝑒𝑘𝑠

2
➔ The variance (σ ) measures uncertainty and is calculated as:
2 𝑏−𝑎 2
σ =( 6
)
➔ For activity A, the variance is:
2 12 − 4 2 8 2
σ 𝐴
=( 6
) = ( 6 ) = 1. 78

➔ Using these equations and the data from Table 9.4, the expected time (𝑡) and variance
2
(σ ) were calculated for each activity, summarized in Table 9.5.
 ➔ These results are then applied to the Porta-Vac project network (see Figure 9.9) to
incorporate the expected activity times into the project schedule.

➢ 4TH STEP: Determine the Critical Path

After obtaining the project network and expected activity times, the next step is to identify
the critical path to determine the expected project completion time and schedule activities.

➔ Begin with a forward pass through the network (Figure 9.9) to calculate the Earliest
Start (ES) and Earliest Finish (EF) times for each activity. For example, activity J has
an Earliest Finish (EF) of 17 weeks, indicating the expected project completion time.
➔ Next, perform a backward pass to calculate the Latest Start (LS) and Latest Finish
(LF) times, shown in Figure 9.11. This helps determine how much time an activity can
be delayed without affecting the project timeline.

➔ The activity schedule is summarized in Table 9.6, showing the slack time (LS - ES) for
each activity. Activities with zero slack (A, E, H, I, and J) form the critical path, which
dictates the total project duration and identifies the activities that cannot be delayed
without delaying the entire project.
 ➢ 5TH STEP: Calculating Variability in Project Completion Time

★ For the Porta-Vac project, the critical path (A-E-H-I-J) has an expected completion time
of 17 weeks. However, variations in the activities can affect this timeline in the following
ways:
○ Noncritical Activities: Delays in noncritical activities usually don’t affect the
project timeline due to slack time, but if delayed enough to use up all slack, they
may become critical and impact the timeline.
○ Impact of Variability on Critical Activities: Delays in critical activities will
extend the project time, while completing them early may shorten the
timeline—unless it makes other activities critical.

To understand how the variability in activity times affects the project completion, we
consider the following steps for each path in the Porta-Vac project:
➔ Examining Figure 9.11, we observe four paths through the project network:
◆ path 1 = A-E-H-I-J
◆ path 2 = A-C-F-J
◆ path 3 = A-D-G-J
◆ path 4 = B-H-I-J
➔ Let 𝑇𝑖 denote the total time to complete path 𝑖:
𝐸(𝑇𝑖) = 𝑡𝐴 + 𝑡𝐸 + 𝑡𝐻 + 𝑡𝐼 + 𝑡𝐽
➔ For path 1 (the critical path), the expected time is:
𝐸(𝑇1) = 6 + 3 + 4 + 2 + 2 = 17 𝑤𝑒𝑒𝑘𝑠
➔ The variance of 𝑇𝑖 is the sum of the variances of the activities along path 𝑖:
2 2 2 2 2 2
σ 𝑖= σ 𝐴
+σ 𝐸
+σ 𝐻
+σ 𝐼+σ 𝐽
➔ For path 1 (the critical path), the variance in completion time is:
2 2
σ 1
= 1. 78 + 0. 11 + 0. 69 + 0. 03 + 0. 11 = 2. 72 𝑤𝑒𝑒𝑘𝑠
 ➔ Knowing that the standard deviation is the square root of the variance, we compute the
standard deviation σ for the path 1 completion time as:
1

2
σ1 = σ 1
= 2. 72 = 1. 65 𝑤𝑒𝑒𝑘𝑠

➢ 6TH STEP: Calculating the Probability of Meeting the Deadline

Assuming the path completion time 𝑇𝑖 follows a normal distribution, we can calculate
the probability that a path will be completed within a specified time.

➔ For example, if management allotted 20 weeks for the Porta-Vac project, we can
determine the probability that path 1 will be completed within 20 weeks by calculating the
z-score:
20−17
𝑧𝑖 = 1.65
= 1. 82
➔ Using the z-score of 1.82, the probability that path 1 will meet the 20-week deadline is
0.9656, as shown in Appendix B.

➔ In Table 9.7, the expected completion time and variance are calculated for each path in
the Porta-Vac project. The results show:

◆ Path 2 and Path 4 are almost certain to be completed within the 20-week
deadline.
◆ Path 3 has a probability of 0.9783 of being completed by the 20-week deadline.

➔ To estimate the overall probability of the project being completed within 20 weeks, we
focus on the path with the smallest completion probability, which in this case is Path
1 (the critical path), with a probability of 0.9656. Therefore, the estimated probability that
the entire Porta-Vac project will be completed within 20 weeks is 0.9656.
 ➔ So to answer the question: What is the probability that path 1 will be completed
within 20 weeks?

➔ Answer: The probability that Path 1 will be completed within 20 weeks is 0.9656 or
96.56%.

➔ To estimate the probability of the entire project being completed on time, we often rely on
the critical path. However, this can be overly optimistic as delays in noncritical activities
may affect the project if they become critical. An alternative method multiplies the
probabilities of each path completing on time:

𝑃(𝑝𝑎𝑡ℎ 1 𝑐𝑜𝑚𝑝𝑙𝑒𝑡𝑒𝑑 𝑏𝑦 𝑑𝑒𝑎𝑑𝑙𝑖𝑛𝑒) 𝑥 𝑃(𝑝𝑎𝑡ℎ 2 𝑐𝑜𝑚𝑝𝑙𝑒𝑡𝑒𝑑 𝑑𝑒𝑎𝑑𝑙𝑖𝑛𝑒)

𝑥 𝑃(𝑝𝑎𝑡ℎ 3 𝑐𝑜𝑚𝑝𝑙𝑒𝑡𝑒𝑑 𝑏𝑦 𝑑𝑒𝑎𝑑𝑙𝑖𝑛𝑒) 𝑥 𝑃(𝑝𝑎𝑡ℎ 4 𝑐𝑜𝑚𝑝𝑙𝑒𝑡𝑒𝑑 𝑑𝑒𝑎𝑑𝑙𝑖𝑛𝑒)

0. 9656 𝑥 1. 0 𝑥 0. 9783 𝑥 1. 0 = 0. 9446

➔ This assumes paths are independent, which is unrealistic due to shared activities,
making this estimate a pessimistic one. Regular monitoring of progress and activities
with high variability is crucial to managing the project effectively.
9.3 CONSIDERING TIME-COST TRADE-OFFS
INTRODUCTION:
Crashing - involves using extra resources to reduce/shorten activity times. This means that to
speed up certain tasks, the project manager might add more workers, equipment, or work
overtime.
Estimating the time needed for project tasks, the project manager considers how many
resources (like labor or machinery) will be assigned to each task. The developers of CPM
allowed project managers to speed up activities by adding resources, which would, in turn,
shorten the overall project timeline.
However, adding resources typically increases the project's costs. So, the project manager must
carefully weigh the extra costs against the benefit of reducing the time it takes to complete the
project. Essentially, this involves making a trade-off: spending more money to finish the project
sooner.

Table 9.8 - Two-machine maintenance project consisting of five activities.

Management has substantial experience with similar projects and the times for maintenance
activities have very little variability; hence, a single time estimate is given for each activity.
The process for calculating the critical path for the maintenance project is the same as the
method used for the Western Hills Shopping Center expansion and the Porta-Vac project.

Crashing Activity Times

- If completing the maintenance project within 10 days is essential, we see that the current
critical path of 12 days makes this impossible without shortening some activity times.
This shortening process, called "crashing," typically involves adding resources, which
increases costs. To minimize extra costs, we need to focus on the activities that are
cheapest to crash and reduce their duration just enough to meet the 10-day goal.

To determine where and how much to crash activity times, we need information on (1) how
much each activity can be crashed and (2) how much the crashing process costs.
Specifically, we need to know:
1. Activity cost under the normal or expected activity time
2. Time to complete the activity under maximum crashing (i.e., shortest activity time)
3. Activity cost under maximum crashing
Assumption is that any portion or fraction of the activity crash time can be achieved for a
corresponding portion of the activity crashing cost. For example, if we decided to crash activity A
by only 1.5 days, the added cost would be 1.5 ($100) = $150, which results in a total activity
cost of $500 + $150 = $650.
Activity A has the lowest crashing cost per day of the three, and crashing this activity by 2 days
will reduce the A-B-E path to the desired 10 days. However, as you crash the current critical
activities, other paths may become critical. Thus, you will need to check the critical path in the
revised network and perhaps either identify additional activities to crash or modify your initial
crashing decision. For a small network, this trial-and-error approach can be used to make
crashing decisions; in larger networks, however, a mathematical procedure is required to
determine the optimal crashing decisions.

Linear Programming Model for Crashing

With PERT/CPM, we know that when an activity starts at its earliest start time, then
Finish time = Earliest start time + Activity time
If slack time is associated with an activity, then the activity need not start at its earliest start
time. In this case, we may have
Finish time > Earliest start time + Activity time
Because we do not know ahead of time whether an activity will start at its earliest start time, we
use the following inequality to show the general relationship among finish time, earliest start
time, and activity time for each activity:
Finish time ≥ Earliest start time + Activity time
Let

Following the same approach used for Activity A, the constraint corresponding to the finish time
for Activity C (expected time = 6 days) is

Finally, we consider activity E. The earliest start time for activity E equals the largest of the
finish times for activities B and D. Because the finish times for both activities B and D will be
determined by the crashing procedure, two constraints must be written for activity E. One
based on the finish time for activity B and one based on the finish time for activity D:

We must solve a 10-variable, 12-constraint linear programming model to determine the

optimal crashing for each of the activities. Optimization software (e.g. Excel Solver) provides
the optimal solution of crashing activity A by 1 day and activity E by 1 day, with a total crashing
cost of $100 + $250 = $350. With the minimum cost crashing solution, the activity times are as
follows:
APPENDIX B