LP Model Formulation

# Concept of LP
Linear programming (LP) is a mathematical technique for finding optimal solutions to problems that can be
expressed using linear equations and inequalities. In short, linear programming is a mathematical modeling
technique in which a linear function is maximized or minimized when subjected to various constraints. So, the
main objective of linear programming is to maximize or minimize the numerical value like maximization of
revenue or minimization of cost.
Formulation is the process of translating a real-world problem into a linear program. Once a problem has been
formulated as a linear program, a computer program can be used to solve the problem
# Elements / Components of LP
1. Decision variables: These variables are a set of quantities that need to be determined in order to solve the
problem. These are called decision variables because the problem is to decide what value each variable
should take.
2. Objective function: The objective of a LP problem is to maximize or to minimize some numerical value.
Here maximizes the value or minimize the cost of the project.
3. Constraints: Constraints represent resource constraints, or the minimum or maximum level of some
activity or condition.
4. Non-negativity constraints: The variables of LP must always take non-negative values (i.e., they must
be greater than or equal to zero).
# Steps of LP
1. Identify the decision variables:
2. Formulate the objective function
3. Identify and formulate the constraints
4. Include the non-negativity constraints
# Characteristics of LP
1. Objective function: In LP, there must be clearly defined objective function which can be stated in
quantitative way. This objective function indicates how each variable contributes to the value to be
optimized in solving the problem. Generally, the objective function expresses maximize the profit or
minimize the cost.
2. Alternative courses of action: Alternative courses of actions are considered in LP problem. Existence of
alternative courses of actions used to achieve the objective.
3. Limited supply of resources: LP problem deals with limited resources. For example, portfolio managers
have limited capital and plat managers have limited plant capacity and technology. By using these limited
resources, LP helps to achieve maximum revenue or minimum cost.
4. Constraints: Constraints define the possible values that the variables of a linear programming problem
may take. They typically represent resource constraints, or the minimum or maximum level of some
activity or condition.
5. Non-negativity: The value of variables must be zero or positive and not negative. For example, in the
case of production, the manager can decide about any particular product number in positive or minimum
zero, not the negative.
6. Finiteness: There should be finite and infinite input and output numbers. In case, if the objective function
has infinite factors, the optimal solution is not feasible.
# Assumptions of LP
1. The constraints and the objective function are linear: The value of the objective function and the
response of each resource expressed by the constraints is proportional to the level of each activity
expressed in the variables. Here also assume that the level of activity X1 should not affect the costs or
benefits associated with the level of activity X2.
2. Divisibility: In LP, it is assumed that the values of decision variables can be fractional value.
3. Certainty: The model assumes that the responses to the values of the variables are exactly equal to the
responses represented by the coefficients. It means that numbers in the objective and constraints are known
with certainty and do change during the period being studied
4. Data Availability: Formulating a linear program to solve a problem assumes that data are available to
specify the problem.
5. Non-negativity: LP assumes that the value of variables must be zero or positive and not negative. For
example, in the case of production, the manager can decide about any particular product number in
positive or minimum zero, not the negative.
# Advantages of using LP:
1. Ensure productive uses of limited resources: Linear programming helps in attaining the optimum use
of productive resources. It also indicates how a decision-maker can employ his productive factors
effectively by selecting and distributing (allocating) these resources.
2. Improve the quality of decision: Linear programming techniques improve the quality of decisions. The
decision-making approach of the user of this technique becomes more objective and less subjective.
3. Helps to determine optimal solution: Linear programming techniques provide possible and practical
solutions since there might be other constraints operating outside the problem which must be taken into
account. Just because we can produce so many units do not mean that they can be sold. Thus, necessary
modification of its mathematical solution is required for the sake of convenience to the decision-maker.
4. Focus on problem areas: Highlighting of bottlenecks in the production processes is the most significant
advantage of this technique. For example, when a bottleneck occurs, some machines cannot meet demand
while other remains idle for some of the time.
5. Help in re-evaluation of a basic plan: Linear programming also helps in re-evaluation of a basic plan
for changing conditions. If conditions change when the plan is partly carried out, they can be determined
so as to adjust the remainder of the plan for best results.
# Limitation of using LP:
1. Mandatories of objective function: There should be an objective which should be clearly identifiable
and measurable in quantitative terms. It could be, for example, maximization of sales, of profit,
minimization of cost, and so on, which is not possible in every case of real life.
2. Limitation of quantitative measurement: The activities to be included should be distinctly identifiable
and measurable in quantitative terms, for instance, the products included in a production planning problem
and all the activities can’t be measured in quantitative terms for example if labor is sick, which will
decrease his performance which can’t be measured.
3. All problems aren’t linear: In some cases, objective and constraints functions aren’t linear. LP technique
cannot solve the business problems of non-linear nature.
4. Problem related fractional values: LP take fractional values as well as integers. In some cases, the results
of LP give a confusing and misleading picture. For example, the result of this technique is for the purchase
of 1.6 machines. It is very difficult to decide whether to purchase one or two- machine because machine
can be purchased in whole.
5. Uncertainty ignored: The factor of uncertainty is not considered in this technique.
 6. Sometimes costly: If the numbers of variables or constraints involved in LP problems are quite large, then
using costly electronic computers become essential, which can be operated, only by trained personnel,
which is costly to manage.

# Applications / uses of linear programming

1. Personnel assignment problem: If ‘x’ number of workers have to perform ‘y’ numbers of jobs, an
assignment of each person to a job has to be done such that the overall productivity is optimized, whether
it be minimum cost, or minimum time taken, or maximum profit.
2. Transportation problem: This helps in minimizing the cost of transport between source and delivery
point.
3. Optimum estimation of employee compensation: The objective here is to determine a consistent plan
of employee compensation, by taking into account salary, job ranking etc.
4. Production management: Linear programming can be applied to determine product mix, and assembly
time balancing.
5. Marketing management: Linear programming helps in analyzing the effectiveness of advertising
campaigns, and time based on the available advertising media. It also helps a sales person to find the
shortest route while travelling.

# Importance of Linear programming for Management

The role of linear programming in improving managerial decisions is important. The technique can play a
significant role in determining the factors that have a significant impact on the decision-making process of any
business.
It can play a vital role in reducing the function of the cost of the product and optimizing the profitability of any
business. The strategy of linear programming can be used to compute the sales and prices of products. The profit
of the company could be optimized by applying the technique of linear programming to it. The approach of linear
programming can be very helpful for the managers for the decision making the process.
The approach of linear programming could be very significant in determining the number of resources that are
required for the production of any product. Such approximations could play an important role in analyzing the
requirement of raw materials or resources required for different products to maximize the profit of the company.
Effective managerial skills could play a significant role in maximizing the profit of the firm. The production level,
as well as the profit of any business, could be maximized by applying the strategy of linear programming for
effective management. By efficient use of LP in personnel assignment problem, transportation problem,
production management, marketing management etc. management can reduce the cost and boost the profitability
of the firm.
 LP: Graphical Solution
# Steps/ Process for solving LP graphical method:
For a max (min) problem, an optimal solution to an LP is a point in the feasible region with the largest
(smallest) objective function value.
Step 1: Model formulation or sometimes a formulated model is given.
Step 2: Plotting the constraints and finding the feasible region
Step 3: Plotting the objective function and draw a line (iso-profit/iso-cost line if it’s a profit max or cost min
problem)
Step 4: Move the line parallel towards the direction that increases (for max problem) and decreases (for min
problem) the objective function value.
Step 5: The intersection points before leaving the feasible region will be the optimal solution(s) and optimal
profit is the optimal value.

# Technique for plotting the inequalities:

Step 1: Plot equality. Convert the inequality to equality.
Step 2: Choose trial point
Step 3: Evaluate LHS expression
Step 4: Determine if the trial point satisfies the inequalities:
i. If the trial point satisfies the original inequality, then the straight line plotted in the graph and all points
on the same side of the line as the trial point.
ii. If the trial point does not satisfy the original inequality, then the straight line plotted in the graph and
all points not on the same side of the line as the trial point

# Some Technical Issues

Infeasibility: It means there is no solution which satisfies all the constraints or
it is the case where no feasible region satisfies all the constraints. It represents a
state of inconsistency in the set of constraints.

Any feasible region is not found in Infeasibility. A real operation must remain
within the constraints of reality; hence, infeasibility most often indicates an error
of some kind. It may stem from an error in specifying some of the constraints or
wrong numbers in the data.

Extreme points:
All the corners of the feasible region are called the extreme points.
 Unboundedness:
An unbounded solution of a linear programming problem is a situation where
objective function is infinite. The LP can fail to have an optimal solution if the
objective is made infinitely large without violating any of the constraint.

It happens due to incorrect model formulation since no real situation permits

management an infinitely large solution and therefore an infinitely large profit.

Redundancy:
A constraint that does not affect the feasible region is called a redundant
constraint.

Redundant constraints can be omitted from a system of linear constraints without

changing the feasible region. Redundancy isn’t part of feasible region. But in case
of making feasible region or optimal solution, redundant constraint has a role.
Because to make feasible region or optimal solution, like every constraint,
redundant constraints also have to towards the feasible region.

Multiple Solution:
If objective function coincides with one of the constraints, then any point on that
line is an optimal solution too.

The multiple optimal solutions will arise in a linear program with more than one
set of basic solutions that can minimize or maximize the required objective
function. Sometimes, the multiple optimal solutions are called the alternative
basic solution.

# Active Constraint vs Redundant Constraint:

Active Constraint Redundant Constraint

The constraints which are part of feasible region, is The constraints which are not part of feasible region
called active constraint. but has a role to make feasible region, is called active
constraint.
 Simplex Method
# Basic Concept
[ Simplex method is a systematic algebraic way of examining the corners (extreme points) of an LP constraint set
in search for optimal solution. In linear programming, simplex method is used when there are involved more than
two variables.
Since most of the real-world problems contain more than two decision variables, the graphical method is not
generally applicable. Such problems are generally solved by using simplex method. The method is also known as
the simplex algorithm.]

The algorithm first seeks an initial corner which is called phase I. if the problem is inconsistent, phase I will
discover that fact. Otherwise, the initial corner is found and phase I is complete.
Then the algorithm proceeds to move along the constraint set from corner to adjacent corner. Each move in the
sequence is called “iteration” or “pivot”.
This is designed so that the objective function will increase (decrease) for Max (min) at each successive corner
in the sequence.

# Two conditions need to be met before applying the simplex method

1. The right-hand side of each constraint inequality should be non-negative. In case, any linear programming
problem has a negative resource value, then it should be converted into positive value by multiplying both
the sides of constraint inequality by “-1”.
2. The decision variables in the linear programming problem should be non-negative.

# Importance of Simplex Method

Simplex method is very much useful to deal with more than two decision variables to find out optimal solution.
The simplex method is used to eradicate the issues in linear programming. It examines the feasible set's adjacent
vertices or extreme points in sequence to ensure that, at every new vertex, the objective function increases or is
unaffected.
# When we use artificial variable with M coefficients?
# Why artificial variable is used in simplex method?
Artificial variable is used in simplex method of Linear programming. The artificial variable with M coefficient
refers to the kind of variable which is introduced in the linear program model to obtain the initial basic feasible
solution. It is utilized for the equality constraints and for the greater than or equal inequality constraints. There is
no meaning of the artificial variables in the physical sense.
Simplex method requires to first find the initial basic feasible solution. In Max ≤ with constraints, finding the
initial table can be done by using slack variables as basic variable. This does not work, if the LP has ≥ or =
constraints. In this situation, artificial variable with big M coefficient is needed so get initial solution.
Artificial variable won’t exist in feasible solution. Problem will be infeasible if we cannot get all artificial
variables out of the optimal solution. In that situation, artificial variable leads to infeasible solution.
# Steps in simplex Max and Min problem
1. Convert the inequalities to equations by adding slack for ≤ constraints and subtracting surplus for ≥
constraints.
2. Add artificial variables to constraints having ≥ or = sign. Give artificial variable objective coefficient +M
for Min problem and –M for max problem
3. Enter resulting equation in the simplex table
4. Calculate Zj and Cj-Zj values
5. Determine the entering variable (optimal column) by choosing one with highest positive Cj-Zj value for
Max problem and most negative Cj-Zj for Min problem
6. Determine the row to be replaced by dividing quantity column value by the corresponding optimal column
values to get smallest nonnegative quotient
7. Compute values in the replacing row.
8. Compute values in the remaining rows.
9. Calculated Zj and Cj-Zj
10. If there is still positive Cj-Zj value in max problem and still negative value in Cj-Zj in min problem, return
to step 5
11. If there is no positive Cj-Zj in max problem and no negative Cj-Zj in min problem, the optimal solution
has been reached.

# Some Technical Issues in Simplex Method

Infeasibility:
Problem is infeasible if we cannot get all artificial
variables out of the optimal solution. Under the Simplex
Method, the problem is said to have no feasible solution if
at least one of the artificial variables remains in the final
simplex table as basic variable with non-zero quantity.

Unboundedness:
Unboundedness exists if there is no non-negative ratio or
if all the ratios are of the form, say, 10/-2 or 60/0, then we
know the solution is unbounded. As replacement ratio
values are either infinite or negative, in this case there is
no outgoing variable. Unboundedness is created due to
incorrect model formulation.

Multiple Solution
 Multiple solutions of a linear programming problem are solutions each of which maximize or minimize the
objective function under Simplex Method. Under Simplex Method, the existence of multiple optimal solutions
is indicated by a situation under which a non-basic variable in the final simplex table showing optimal solution
to a problem, has a net zero contribution. In other words, if at least one of the non-basic variables in the (Ci -
Zj) row of the final simplex table has a zero value, it indicates that there is more than one optimal solution.

So, in simplex, whenever a non-basic variable has a zero entry in Cj-Zj row of an optimal table, then bringing
that variable in the solution will give a solution which is also optimal.

Degeneracy:
Under Simplex Method, degeneracy occurs, where there is
a tie for the minimum positive replacement ratio for
selecting outgoing variable. In this case, the choice for
selecting outgoing variable may be made arbitrarily.

If the problem is degenerate, we could theoretically get

sequences of tables having same objective function value
and takes us back to a table we have already seen. The
problem falls in a loop and we never find the optimal
solution to that problem.

Shadow Price:
The Shadow Price of constraint is the change in optimal objective function value per unit increase of a
corresponding RHS coefficient. Alternatively, it is the value of one additional unit of a scarce resource.

The worth of additional resources is valuable information to management. For example, questions like exactly
how much should a firm be willing to pay to make additional resources available? Or is one more hour of
machine time worth $1 or $5 or $20? or is it worthwhile to pay workers an overtime rate to stay one extra hour
each night to increase production output? So, shadow price facilitates the project managers to take their decision
whether they will buy the additional resources or not.

Transportation Problem
# How does degeneracy occur in TP problem?
In a transportation problem when number of used cell and rim requirement -1 is not matched, the problem is said
to be a degenerate transportation problem. Degeneracy occurs whenever the number of individual allocations is
less than m + n - 1, where m and n are the number of rows and columns of the transportation problem respectively.
Degeneracy in transportation problem can develop in two stages.
1. The basic feasible solution might have been degenerate from the initial stage.
2. They may become degenerate at any immediate stage.
Degeneracy is indicated in two ways:
1. There may be excessive number of used squares in a solution i.e., the number of used cells is greater than rim
requirement -1. This type of degeneracy occurs in developing initial solution. By modifying the initial solution,
we can solve the problem.
2. There may be insufficient number of used cells in a solution. Degeneracy of this type can occur either in the
initial solution or in the subsequent solution. In this case, it is not possible to trace a closed path (stepping stone)
for each unused cell. (degenerated table can be used)

# What is TP? Why it is called specially structured LP?

The transportation problem is a special type of linear programming problem where the objective is to minimize
the cost of distributing a product from a number of sources or origins to a number of destinations.
The origin of a transportation problem is the location from which shipments are dispatched. The destination of a
transportation problem is the location to which shipments are transported. The unit transportation cost is the cost
of transporting one unit of the consignment from an origin to a destination.
This type of problem can be solved using traditional simplex method, but due to their special structure, there
exists specialized algorithms that are much more efficient to solve them. For example,
To solve this via simplex, we need lot of artificial variables as the
model contains many equalities or greater than equal to constraints
and will have to use big M to form the initial feasible table
(solution). The complexities will increase.

In TP on the other hand, we don’t need to introduce any extra

variable and can deal with the equality of greater than equal to
constraints directly.
That’s why Transportation problem is known as specially structured LP.

# What does to deal with supply demand inequalities in TP?

In transportation problem, the supply demand inequalities are known as unbalanced problem. This kind of
unbalanced problem is solved by using ‘Dummy Destination’ or ‘Dummy Origin.’
When Demand is greater than Supply, the problem is solved by following way-
(Tables from class slide)
When Demand is less than Supply, the problem is solved by following way-
(Tables from class slide)
Thus, supply demand inequalities in TP are solved.

Assignment Problem
# Basic Concept:
In many business situations, management needs to assign resources - personnel to jobs, - jobs to machines, -
machines to job locations, or - salespersons to territories. Assignment problem is a special type of linear
programming problem which deals with the allocation of the various resources to the various activities on one-
to-one basis. It does it in such a way that the cost or time involved in the process is minimum and profit or sale is
maximum. Though their problems can be solved by simplex method or by transportation method but assignment
model gives a simpler approach for these problems.
In a factory, a supervisor may have six jobs available and six machines. He will have to take decision regarding
which machine should be assigned to which job. Problem forms one to one basis. This is an assignment problem.
Objective of AP: The objective is to assign the jobs to machines at the least possible total cost. In other words,
the objective is to minimize the cost or time of completing a number of jobs by a number of persons.
# Characteristics of AP
1. Any one of the jobs can be processed completely on any one of the machines, that is, each job must be
assigned exclusively to one and only one machine. So, job requirement for each job is 1 and that the
machine capacity for each machine is also 1.
2. The number of rows (jobs)equals the number of columns (machines).
3. In the optimal solution, there will be one and only one assignment in a given row or column of the given
assignment table.

Network Problem

# Basic concept of CPM

The critical path method (CPM) is a technique where a project manager identifies the interdependent tasks that
are necessary for project completion and determine scheduling flexibilities. A critical path in project management
is the longest sequence of activities that must be finished on time in order for the entire project to be complete.
Any delays in critical tasks will delay the rest of the project.
An important goal of CPM is to help project manager to understand which tasks should be carried out in which
order. CPM revolves around discovering the most important tasks in the project timeline, identifying task
dependencies, and calculating task durations.
Basic steps employed in CPM are:
1. Determine required tasks.
2. List required tasks in sequence.
3. Create a flowchart including each required task.
4. Identify all critical and non-critical relationships (paths) among required tasks.
5. Assign an expected completion/execution time for each required task.
6. Study all critical relationships to determine possible alternatives for as many as possible
# Basic concept of PERT
Program evaluation and review technique (PERT) is a technique adopted by organizations to analyze and
represent the activity in a project, and to illustrate the flow of events in a project. PERT is a method to evaluate
and estimate the time required to complete a task within deadlines.
PERT helps projects managers to identify:
1. Project start and end dates
2. Anticipated total required completion time
3. All activities, referred to as events on the chart, that impact the completion time
4. The required sequence of events
5. The probability of completion by a certain date
Using PERT, managers can create three different time estimates for the project:
1. The shortest possible amount of time each task will take
2. The most probable amount of time
3. The longest amount of time tasks might take if things don't go as planned

# Similarities between PERT and CPM

# Difference between PERT and CPM

Basis for PERT CPM
comparison
Meaning PERT is a popular project management CPM is a statistical algorithm which has
technique that is applicable when the time a certain start and end time for a project
required to finish a project is not certain
Full form Project Evaluation and Review Technique Critical Path Method

Deals with It deals with planning aspect. It deals with controlling aspect (reducing
cost)
Model It is a probabilistic model. It is used where It is a deterministic model (when time is
uncertainty works (required time is not known, other factors can be evaluated).
known)
Time estimation Three-time estimates are involved in PERT, Single time estimate is involved
which are converted to weighted average of
expected completion time.
It is basically a tool for planning and Explicit estimate of costs in addition to
controlling of time time
Orientation Event-oriented Activity-oriented

Appropriate for High precision time estimate Reasonable time estimate

Suitable for Research and Development Project Non-research projects like civil
construction, ship building etc.
Crashing Not Applicable Applicable
concept

# Advantages of PERT and CPM

1. Detailed planning: PERT and CPM force management to plan in detail and define the sequence of
activities.
2. Commitments and communications: These force management to plan and make commitments regarding
execution time and completion dates.
3. Efficient monitoring and control: In PERT and CPM, identification of critical path activities enables
the use of efficient monitoring system
4. Identifying potential problem areas: By identifying problem, contingency plan can be devised.
5. Proper use of resources: PERT and CPM enable management to make proper use of resources. It helps
to identify critical activity and non-critical activity. As a result, resources can be shifted from critical
activity to non-critical activity.
6. Tools for decision making: PERT and CPM allow check effectiveness and efficiency of alternative ways
of executing project.
7. Assess probability of completion: By using PERT, the probabilities of successfully meeting deadlines
can be assessed.
8. Cost-time trade-offs: By using CPM, enables evaluating cost-time trade-offs between the cost of
executing an activity in a normal way or crashing activity at a higher cost to finish the project.

# Advantages of PERT
1. Planning For Large Projects in PERT – The scheduling of project activities is done easily with the help
of the PERT system by the project manager. This technique is more active in large sophisticated project
works.
2. Visibility of Critical Path in PERT – The PERT method will show the critical path in a well-defined
manner. The critical path is the path with activities that cannot be delayed under any circumstances. Proper
knowledge about the stack values with limited conditions of dependencies will help the project manager
to bring fast and quality decisions that will favor the project performance.
3. Analysis of Activity in PERT – The activity and the events are analyzed from the PERT networks. These
are analyzed independently as well as in combination. This will give a picture of the likely completion of
the project and the budget.
4. Coordination in PERT – The various departments of the construction organization will deliver data for
the PERT activities. Good integration is developed between all the departments which will help in
improving the planning and the decision-making capabilities of the project team.
# Disadvantages of PERT
1. Time Focused Method – PERT is a time-bound method, so finishing projects or activities on time is of
high importance. If it does not happen than a problem can arise.
2. Subjective Analysis – Here, the project activities are recognized according to the available data. However,
it is difficult in PERT projects as it is applicable for the only new project are which is not repetitive in
nature, therefore, the collection of information to be subjective in nature.
3. Prediction Inaccuracy – PERT does not have any past records for a framework of a project, so prediction
comes into play. The project will be ruined if the prediction is not accurate.
4. Expensive – Too expensive in terms of time consumed, research, prediction, and resources utilized.
5. Other Issues with PERT – This method is highly labor-intensive in nature. As there are chances of an
increase in project activities large and complicated networks are developed as many task dependencies
come into existence. If two activities share common resources, this technique won’t find very apt for the
project.

# Advantages of CPM
1. CPM figures out the activities that can run parallel to each other. It helps the project manager in identifying
the most critical elements of the project.
2. CPM gives a practical and disciplined base which helps in determining how to reach the objectives.
3. CPM is effective in new project management. It can strengthen a team’s perception if it is applied properly.
4. CPM provides a demonstration of dependencies which helps in the scheduling of individual activities. It
shows the activities and their outcomes as a network diagram.
5. CPM gives a fair and concise procedure of documenting of project. It helps in determining the slack time.
6. An explicit and clear approach of communicating project plans, schedules, time, and cost performance is
developed.
7. CPM is extensively used in the industry. It helps in optimization by determining the project duration.

# Disadvantages of CPM
Various Demerits of Critical Path Method (CPM) are mentioned below:
1. The scheduling of personnel is not handled by the CPM.
2. In CPM, it is difficult to estimate the completion time of 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 resource allocation.
6. In CPM, a critical path needs to be calculated precisely.
Actually, PERT is stipulated according to events whilst CPM is ranged towards activities. A deterministic model
is used in CPM. While PERT uses a probabilistic model.

# Purpose of PERT and CPM

PERT and CPM are the network techniques or models which are widely used in project management. These
techniques are very useful in planning, scheduling and executing large time bound projects which involve careful
co-ordination of variety of complex and interrelated activities, estimating resource requirements and time for each
activity and establishing interrelationship amongst the activities.
These techniques help to answer the following issues regarding a project-
1. Expected completion time of a project.
2. Start and finish time of individual part of a project.
3. Identifying critical and non-critical activity to finish the project on time and to avoid making the entire
project late.
4. Whether it is possible to shift the resources from non-critical activity to critical activity.
5. Effect of any delay in any activity.
Overall, the main purpose of PERT and CPM is to objectively identify these critical activities to control the delays
and cost overruns.

# Why is the identification of critical path important to the scheduling and controlling for a project?
“Critical path” is one of the most important of all project management concepts, and it’s something that every
project manager should understand before taking the reins of a major project. Put simply, the critical path of a
project is a specific sequence of tasks that must be completed on time in order for the project to meet its deadline.
Each task on the critical path can only begin after the previous task on the critical path is complete.

Why is the Critical Path Important?

The critical path helps project managers and team members identify the tasks that do not allow for any flexibility
in timing. While some project tasks have a certain amount of “slack”, meaning that they can be delayed or
extended without affecting the overall project timeline, tasks on the critical path have zero slack time. Any delay
in a critical path task will result in a delay in the final deliverable, unless future tasks can be modified so that they
consume less time than initially planned.

In some cases, monitoring the critical path is so important that the project follows a special methodology that
organizes project activities based on critical path task dates and requirements. This approach, known as critical
path project management, is often used for construction projects and in other instances where deadlines are
inflexible and task durations can be estimated with high precision. Even when projects follow other
methodologies, project managers should have a solid understanding of the critical path so that they can accurately
evaluate the effect of potential delays or time overruns.

# Explain dummy activities in formulating network solution.

A Dummy activity is a type of operation in a project network which neither requires any time nor any resource.
It is an imaginary activity shown in a project network to identify the dependence among operation. An activity
followed by a dummy activity can only be completed once the activity or activities preceding the dummy activity
is completed. Dummy activity is depicted by dotted line.
A dummy activity can be either critical or non-critical. It becomes a critical activity when the earlier start time
and the latest finish time are equal.
In the following scenarios, a dummy activity is inserted into a network to classify the activity pattern-
 1. To distinguish activities with similar starting and ending points.
2. Identifying and maintaining the proper precedence relationship between activities that are not linked by
events.
When two or more activities would start and finish at the same node (activity), they are exactly parallel. Then
between the end of one of the activities and the common finishing node, a dummy would be inserted. This is
shown in the following network-

D is dependent on B but C is dependent on both A and B. Dummy activity can be used to deal with such a
situation to make linkage between A, B and C.

# Steps involved in PERT / CPM process.

1. Drawing the network from the activity list showing the sequence of activities, the starting point and the
termination point of the project.
2. Activity time in PERT network: Calculate expected times (t) and standard deviations of those times for
project activities. PERT requires the preparation of three time estimates optimistic (or shortest time),
pessimistic (or longest time) and most likely time. In CPM only one time estimate is prepared. In addition,
CPM also requires making cost estimates for completion of project.
3. Finding critical path
i) Forward path method (earliest start time rule)
EF = ES + t
ii) Backward path method (latest finish time rule)
LS = LF – t
4. Calculation of slack
5. Defining critical path in terms of slack
6. Probability estimates

# Characteristics of the distribution (beta distribution) used to express the time variation in PERT

# What are the major uses of PERT and CPM in management science?