Introduction

Management of any project involves planning, coordination and control of a

number of interrelated activities with limited resources. Furthermore, it becomes
necessary to incorporate any change from the initial plan as they occur, and
immediately know the effects of the change.

PROJECT MANAGEMENT
A project is an interrelated set of activities that has a definite starting and ending
point and that result in a unique product or service. Project Management Project
management is a scientific way of planning, implementing, monitoring
&controlling the various aspects of a project such as time, money, materials,
manpower, other resources.

STAGES OF PROJECT MANAGEMENT

1. PROJECT PLANNING: Project planning refers to the formulation of plans of
an undertaking to build up new production capacities or to diversify its
business activities or to extend its existing capacities. Project planning is the
first and foremost stage in the execution of a project.
2. APPRAISAL OF PROJECTS: The term "project appraisal "refers to the
detailed evaluation of the project to determine its technical, economic and
financial viabilities. Project appraisal refers to detailed evaluation of the
project.
3. IMPLEMENTATION: It is the stage of actual implementation. Various
techniques such as project cost sheet, bar charts, network techniques like
PERT and CPM that help in completing the project on schedule with desired
cost frame.
4. REVIEW AND CONTROL: Review and control helps to ensure that the plans
are achieved as desired within the stipulated time and cost. The successful
execution of a project requires regular and continuous review and control off
the project.
 NETWORK ANALYSIS
Network analysis is the general name given to certain specific techniques which
can be used for planning, management and control of project. The two most
useful techniques of project management: -

1. Critical path method (CPM)

2. PERT

Basic key concept: -

 Network: A network is a graphical representation of the project and

comprises of series of activities. Activities: A task or a certain amount of
work required in the project, requires time to complete and represented by
an arrow.
 Event: An event represents the start and end point of an activity .It is
represented by a circle (NODE)

Activity

Event Event

 NODE: - A node is represented by a circle .It indicate event, appoint in time

where one and more activities start and / or finish.
 DUMMY ACTIVITY: - An activity which depicts the relationship over the
other but does not consume any time or resources are called dummy
activities.
 PATH: - Path refers to the unbroken chain of activities between events.
 ACTIVITY-ON-NODE (AON):- Use nodes to represent activities and
arrows indicate precedence relationship between them.
  ACTIVITY-ON-ARROW (AOA):- Arrows represent activities and nodes
are events for points in time.

Critical path method (CPM)

Definition:-critical path is the sequence of activities between a project's start
and finish that task the longest time to complete Steps in determining critical
path:-

1. Specify the individual activities.

2. Determine the sequence of activities.
3. Draw the network diagram.
4. Estimate the activity completion time.
5. Identify the critical path.
6. Update the CPM diagram.

 CPM is akin to PERT as both techniques use similar network models and
methods are having the same general purpose.
 But CPM is primarily concerned with the trade-off between cost and time.
 It has been applied mostly to projects that employ fairly stable technology
and are relatively risk free.
 Hence its orientation is 'deterministic'

Critical path: The longest path; determine the project duration.

Critical activities:-all of the activities that make up the critical path.

Forward pass:-

 Earliest start time (ES):-Earliest time an activity can start where ES=
maximum EF of immediate predecessors.
  Earliest finish time (EF):- Earliest time an activity can finish and earliest
start time plus activity time EF-ES +t.

Backward pass: -
 Latest start time (LS):- Latest time is an activity can start without delaying
critical path time.
 Latest finish time (LF):- Latest time is an activity can be completed without
delaying critical path time.
LS= minimum LS of immediate predecessors
 Slack time: - slack time for an activity is the difference between its earliest
and latest start time or between the earliest and the latest finish time.
Critical path is the path of activities having zero slack time.

Program Evaluation and Review Technique (PERT)

 PERT is based on the assumptions that activity's duration follows a
probability distribution instead of being a single value.
 Three time estimates are required to compute the parameters of an
activity's duration distribution:
 Pessimistic time (t)-)-the time of the activity would take if things did not go
well
 Mostly like time (t)- the consensus best estimate of the activity's duration
 Optimistic time (t)-the time the activity would take of things did go well

T = (a+4m+b)/6

 PERT is eminently suitable for

o Research and development and programs, aerospace projects,
o Other projects involving new technology.
 In such projects the time required for completing various jobs or activities
can be highly variable.
 Hence the orientation of PERT is probabilistic.
 PERT ANALYSIS
 Draw a network.
 Analyze the paths through the network and final the critical path.
 The length of the critical path is the mean of the project duration
probability distribution which is assumed to be normal.
 The standard deviation of the project duration probability distribution is
computed by adding the variances of the critical activities (all of the
activities that make up the critical path) and taking the square root of that
sum.
 Probability computations can now be made using the normal distribution
table.

Why PERT/CPM

 The PERT/CPM is capable of giving answers to the following questions to

the project manager:
 When will the project be finished?
 When is each individual part of the scheduled start and finish?
 Of the numerous jobs in the project, which one must be timed to avoid
being late?
 Is it possible to shift resources to critical jobs of the project from other
non-critical jobs of the project without affecting the overall completion
time of the project?
 Among all the jobs in the project, where should management concentrate
its efforts at one time?
 Difference between CPM and PERT

CPM PERT
1. It is an activity oriented 1. It is an event oriented technique.
technique. 2. It uses three times an estimate that
2. It its only one time estimate. is optimistic time, most likely time
3. It uses network diagram and pessimistic time.
4. It is deterministic 3. It uses network diagram
5. It takes cost parameters into 4. It is probabilistic
account 5. It does not take cost parameters
6. The concept of 'crashing' is into account
applied 6. There is no 'crashing' in PERT
7. It is normally used where the 7. It is normally used when high
emphasis is on tradeoff precision is required in time
between cost and completion estimates without considering the
date for large projects. cost implications.
8. E.g. plant maintenance, civil
construction

Advantages of PERT/CPM

o Especially useful when scheduling and controlling large projects.

o Straightforward concept and not mathematically complex.
o Graphical networks help to perceive relationships among project activities.
o Critical path and slack time analyses help pinpoint activities that need to be
closely watched.
o Project documentation and graphics point out who is responsible for
various activities.
o Applicable to a wide variety of projects Useful in monitoring not only
schedules but costs as well.

Disadvantages of PERT/CPM

o Project activities have to be clearly defined, independent, and stable in

their relationships.

o Precedence relationships must be specified and networked together.

o Time estimates tend to be subjective and are subject to fudging by

managers.

o There is an inherent danger of too much emphasis being placed on the

longest or critical path.

Crashing of project
 Crashing a project implies reducing the duration of the project by
employing more resources to it.
 procedure for crashing:-
1. Construct the network diagram and find critical path.
2. Examine cost time slop of different activities on the critical
path which is calculated as cost slop

FORMULA= Crash cost – normal cost

Normal time – crash cost
 3. Start crashing the activity in the critical path, by crashing
the activity having lower cost slope first.
4. Determine the total cost of the project.
5. Construct the new critical path after crashing of an activity
has been completed and revised costs obtained.

Floats
 Total float is the amount of time by which an activity may be delayed
without delaying the project completion
Caution: interpret total floats of activities carefully - all cannot be used
independently
 Free float is that part of total float which can be used without affecting
floats of the succeeding activities
 Independent float is the amount of time which can be used without
affecting the head and the tail events Total Float ≥ Free Float ≥
Independent Float

Calculation of Floats
 Total float = Latest start time of the activity - Earliest start time of the
activity
 Free float = Earliest start time of the next activity - Earliest finish time of the
activity
 Interfering float = Total float - Free float
 Independent float = Earliest start time of the next activity - Latest finish
time of the preceding activity - Duration of the activity
= Free float - Tail event slack, or zero, whichever is higher