Project Management

 Management of a project requires coordinating numerous activities throughout the

organization like availability of skilled manpower, timely input of raw materials etc.
 Project management involves decision making for the planning, organizing, coordination,
monitoring and control of a number of interrelated time bound activities.
 Project Manager therefore, often depends on tools and techniques that are effective enough not
only for drawing up the best possible initial plan but also capable of projecting instantaneously
the impact of deviations so as to initiate necessary corrective measures.
 The search for an effective tool has resulted in development of a variety of techniques like
Network Analysis.
 Network Analysis refers to a number of techniques for the planning and control of complex
projects.
 NETWORK ANALYSIS

 A project is composed of a number of jobs, activities or task that are related to

each other and all of these should be completed in order to complete the project.
 An activity of a project can start only at the completion of many other activities.
 A network is a combination of activities and events of a project.
 The problems of network is to find a course of action which minimizes time, cost or
distance in the performance of various activities such as production,
transportation, communication etc…
 Network analysis provides techniques for planning, scheduling, controlling,
monitoring or coordinating large and complex projects which consist of many
activities.
 NETWORK ANALYSIS

Objectives of network analysis

 Minimization of total cost of a project
 Minimization of total time of a project
 Minimization of cost of a project for a given total time
 Minimization of time of a project for a given cost
Minimization of total cost of a project
 Minimization of idle resources.
 Minimization of production delays, interruptions and conflicts
 NETWORK TECHNIQUE

 Network technique is a major advance in Management Science.

 This techniques is based on the basic characteristics of all projects, that all
work must be done in well defined steps.
 For example : for completing a foundation, the various steps are layout,
placing side boards and concreting.
 Two major network systems, (i) PERT (ii) CPM
 These two network techniques helps managers to plan, schedule,
monitor and control large and complex projects.
 NETWORK TECHNIQUE

Uses of Network Techniques for Management

 Network techniques help the management in planning the complicated projects,
controlling working plan and also keeping the plan up-to-date.
 Network techniques provide a number of checks and safeguards against going
astray in developing the plan for the project.
 Network techniques help the management in reaching the goal with minimum
time and least cost and also in forecasting probable project duration and the
associated cost.
 Network techniques have resulted in better managerial control, better utilization
resources and better decision making.
 NETWORK TECHNIQUE

Different phases in the application of network technique :

Planning – various jobs and activities to be performed
Scheduling – which determine the time required for executing each
operation and the order in which each operation has to be carried out to
meet the plan objectives.
Controlling – is the process in which difference or deviation between the
plan and the actual performances are reviewed after project has started.
 NETWORK CONSTRUCTION

 A network is a graphical diagram consisting of certain configuration of arrows and nodes for
showing the logical sequence of various tasks to be performed to achieve the project
objective.
BASIC COMPONENTS:
 ACTIVITY: It is a task or item of work to be done, that consumes time, effort, money or other

resources. It lies between two events called the preceding and succeeding ones.

• In the network construction, the length of the activity may not be proportional to the
time duration of the activity.
 NETWORK CONSTRUCTION

 An activity is denoted by a capital letter or by two numbers.

 It is represented by an arrow, the tail of which represents its start and the head its finish.
A
2 3

 Here ‘A’ or 2-3 represents an activity. Number ‘2’ represents initial node (start) and ‘3’
represents terminal node (finish).
 Activities which have no predecessors are called start activities.
 Activities which have no successors are called terminal activities.
 EVENT: An event or node represent instants in time when certain activities have been
started or completed.
 An event in a network diagram is a junction of two or more arrows representing activities
 Events are represented by circles. Events are given numbers
 NETWORK CONSTRUCTION

 Tail event : A tail event is one which marks the beginning A

of an activity. Eg. If an activity A is 2-3 then 2 is the tail
event
 Head event : All the activities have an ending marked by
an event. Such an event is known as head event. Eg. If A is
an activity 2-3, then 3 is the head event.
 Successor events : The events that follow an event are B
A
called successor events. Here 3 is the immediate successor
of event 2. 1 2 3 4
 Predecessor events : The events that occur before an
event are called predecessor events. . Here 2 is the
immediate predecessor of event 3.
 The events can be further classified into following two categories:
 (a) Merge Events: When more than one activity comes and joins an event. Such
event is known as merge events.

 (b) Burst event : When more than one activity leaves an event, such event is known
as burst event.
 Concurrent or parallel activity: these activities can be started
simultaneously.
 Dangling activity: an activity (other than the terminal activity) that does
not have a succeeding activity is termed as a dangling activity. It is
connected to the last node through a dummy activity.
 Completion: The project is said to be completed if and only if all the
activities of the project are complete.
 NETWORK CONSTRUCTION

 In the network construction, the length of the activity may not be proportional to the time
duration of the activity.
 The length and directions of the activity are only symbolic of the time period showing the

direction of progress of the activity and the length is so chosen to complete the
construction of the network conveniently irrespective of the actual time duration of the
activity.
 DUMMY ACTIVITY: An activity which only determines the dependency of one activity over

the other, but does not consume any time is called dummy activity.
 It is represented by dotted line arrow.

 Dummy activity serve the following purposes:

 To maintain uniqueness in the numbering system, as every activity may have a distinct
set of events by which the activity can be identified (a dummy activity has a zero time).
 To maintain the proper logic in the network.
Example for dummy activity
 Dummy activity: It is used merely to show the logical dependencies between the
activities. It is an imaginary activity that does not consume any time. It is
represented by a dotted line. Dummy activities are inserted in following cases:
(i) In network, two or more activities are not allowed to have the same starting ending
nodes. Hence, if two activities begin and end at the same time, a dummy activity is
inserted into the network to distinguish the two activities.
(ii) Dummy activity is used to identify precedence relationships correctly.
 Example
(iii) If a second activity can be started after part of a first activity is complete, a
dummy activity is inserted.
(iv) Dummy is inserted to connect the dangling activities. Dangling activity is an
activity (other than the terminal activity) that does not have a succeeding activity is
termed as a dangling activity. It is connected to the last node through a dummy activity.
 Example:
 Representation of Activities & Events

 Activities are represented by simple arrows in a network diagram.

 Length of arrow does not represent either the magnitude of work or the time required for its
completion.
 The length of the arrows is chosen to suit the convenience.
 Events are represented by circles.
 The numbers assigned to the events are marked within the circles.
 Activity is represented by arrow and arrow starts from a circle and ends in a circle.
 Examples for activity : Prepare budget, mix concrete, assemble parts, prepare estimate etc…
 Examples for events : design completed, lathe installed, payment made, showroom
inaugurated etc…
 Predecessor and Successor Activities- An activity A is said to be a predecessor of B if B follows
A. If ‘A’ is the predecessor of activity B then B is called successor of A.
 Network Diagram

 A graph drawn connecting the various activities and events of a project, is a network
diagram.
 Each event is represented in it by a circle (called node) and each activity by an arrow.
 The arrow denotes the sequence of the activities.
 Network diagram are of two types
 Event Oriented Diagram
 Activity Oriented Diagram
 Activity oriented diagrams are known as CPM network diagrams and emphasis more on
activities of the project.
 Event oriented diagram are also known as PERT network diagrams and emphasis more on the
events of the project
 Rules for Constructing Network Diagram

 Each activity is represented by one and only one arrow in the network.
 No two activities can be identified by the same head and tail events.
 Except for the nodes at the beginning and at the end every node must have at least
one activity preceding it and at least one following it.
 Only one activity may connect any two nodes.
 While drawing the networks, as for as possible, the crisscrossing should be avoided.
 Question

Draw the network diagram to the following activities

Activity (i,j) Time Duration

1-2 2
1-3 4
1-4 3
2-5 1
3-5 6
4-6 5
5-6 7
Solution
 Numbering of events (Fulkerson’s rule) in network diagram

 The initial event of the network diagram is numbered ‘1’

 The arrows emerging from the event ‘1’ are then considered. Those arrows
end in new events. Treat them as initial events and number them
2,3,4,etc.
 From these, new initial arrows emerge, which end in new events. They may
treated as new initial events. Number them as 5,6,7 etc.
 Follow step 3 until last event or terminal node which has all arrows coming
in with no emerging arrows.
Errors in Network :
1) Looping: When arrows are drawn from right to left,
resulting into error in relationship

2) Dangling: When an activity (other than terminal activity) is not connected to any
succeeding activity. It should be connected to terminal activity by a dummy activity.

3) Redundancy: When unnecessary predecessors are used.

It should be eliminated.
 Earliest and Latest Event Times
 Earliest Event Time () : The earliest occurrence time or earliest event
time is the earliest at which an event can occur. Earliest occurrence of an
event say ‘2’ is denoted by
 Latest Event Time () : it is the latest time by which an event must occur
to keep the project on schedule. Latest occurrence of an event ‘2’ is denoted
by
 Earliest and Latest Times of an Activity
 Earliest Start Time (EST) : It is the earliest time by which an activity can commence. The ST
of an activity = Earliest occurrence of the tail event of the activity.
 For the activity 2-3, EST is .
 Earliest Finish Time (EFT) : defined as the earliest time by which it can be finished.

EFT = EST + Activity duration

 Latest Finish Time (LFT) : is the latest time by which an activity can be finished without
delaying the completion of the project. LFT of an activity = latest expected time of head event.
 For an activity 2-3, LFT = .
 Latest Start Time (LST) : is the latest time by which an activity can be started without
delaying the completion of the project.
 Rules
• Activity represented by arrows
and events by circle
• All activities start by a event
and end by another event
• Succeeding Activity
B 3 D
• Preceding Activity A
• Simultaneous Activity. 1 2
5
• Network should complete (one E
start event and one ending C
4
event)
 Question
Activity Preceding Activities
A -
Draw a network diagram to
B -
the following set of activities
C A
D A
E B and C
F B and C
G B and C
H D and E
I F
J F
K G
L H and I
M H and I
N J,K and L
Solution
Activity Preceding
Activities
A -
B -
C A
D A
E B and C
F B and C
G B and C
H D and E
I F
J F
K G
L H and I
M H and I
N J,K and L
 Slack & Float
• Slack is a term associated with events.
• It denotes the flexibility range within which an event can occur. The slack of an event is
the difference between the earliest event time and latest event time. (- )
• The term float is associated with the activity times.
• Float denotes the range within which activity start time or its finish time
may fluctuate without affecting the completion of the project.
• Floats are of the following types :
• Total float : is the time spent by which the starting of an activity can be delayed
without delaying the completion of the project. Total float of an activity is the
excess of the maximum available time over the activity time.

Total float = LFT – EFT or LST – EST

 Slack & Float
• Free float : is that portion of positive total float that can be used by an activity
without delaying any succeeding activity.
Free float = EST of successor – EFT of the present activity.

• Independent float : is defined as the excess of minimum available time over

the required activity duration.

Independent float = EST for subsequent activity – LFT for preceding

activity – duration.

• Interfering float : also known as head event slack and is equal to the difference
between total float and the free float.
 CRITICAL PATH METHOD (CPM)

 CPM was developed by Du Pont and the emphasis was on the trade-off between the cost
of the project and its overall completion time (e.g. for certain activities it may be
possible to decrease their completion time by spending more money- how does this affect
the overall completion time of the project?)
 In CPM activities are shown as a network of precedence relationships using activity on
node construction and it is used for the jobs of repetitive in nature where the activity time
estimates can be predicted with considerable certainty due to the existence of the past
experience.
 CIRTICAL PATH
 While analyzing a network, it is necessary to estimate the total project time.
 The total project time is the maximum of the elapsed times among all paths
originating from the initial event and terminating at the terminal event.
 Critical path is that sequence of activities which determines the total project time.
 A critical path is one which connects activities having zero float.
 In a network there may be a number of paths starting from the initial event and ending
in terminal event. These paths connect activities.
 The paths which is longest on the basis of final duration is known as critical path
 CRITICAL PATH METHOD (CPM)
 CPM is network technique of
(1) planning the sequence of activities to be performed in a network
(2) scheduling the time and resources to various operations and
(3) controlling the performances so that they are not deviating from the
plans.
 Steps involved in CPM
 List all the activities (task) and draw a network diagram.
 Find the Earliest event time (TE) and Latest event time (TL) of each event
and show in the network.
 Calculate Earliest start time, Earliest finish time, Latest start time and
Latest finish time for each activity.
 Determine the float for each activity.
 Identify the critical activities.
 Draw double lines in the network diagram passing through critical activities. The
double lines show the critical path.
 Calculate the total project duration which is the sum of durations of critical
CPM
CPM
CPM
CPM
Example
Solution Earliest event time (TE) and Latest event time (TL)
 EFT = EST + Activity duration
Solution LST = LFT - Activity duration

Total project duration = 22

 PERT (Program Evaluation and Review Technique)

 PERT was developed by the US Navy for the planning and control of the Polaris missile program
and the emphasis was on completing the program in the shortest possible time. IN addition PERT
has the ability to cope with uncertain activity completion.
 In PERT activities are shown as a network of precedence relationship using activity on arrow
network construction and it is used for non-repetitive jobs (research and development work),
where the time and cost estimates tend to be quite uncertain. This technique uses
probabilistic time estimates.
 Eg. Launching a spacecraft
 The techniques of CPM and PERT are essentially network scheduling techniques used for
planning and controlling projects in the field of construction, maintenance fabrication, purchasing
and quality control, etc. They employ the technique of minimizing trouble spots such as
production bottlenecks, delays and interruptions by determining the critical factors and
coordinating various parts of overall job.
 PERT
 It is a network technique which uses a network diagram consisting of
events.
 The successive events are joined by arrows.
 The main objective of the PERT analysis is to find out whether a job
could be finished on a given date  minimize the total time for a project.
 It is preferred for those project or operations which are of non
repetitive nature.
 The main assumption in PERT is that activity durations are
independent. The time required for one activity has nothing to do
with the time for another activity.
Time Estimates
 In PERT calculations, probabilistic approach is followed for time
estimation.
 Here three time estimates are made for each activity :
 Optimistic time (t0)
 Pessimistic time (tp)
 Most likely time (tm)
 Time Estimates
 Optimistic time (t0) : This is the shortest possible time in which an activity can
be completed, under ideal conditions.
 This particular time estimate represents the time in which the activity or job can be
completed if everything goes well with no problem.
 Pessimistic time (tp) : It is the maximum time that would be required to
complete the activity.
 This particular time estimate represents the time it might take to complete a particular
activity if everything went wrong and abnormal situations prevailed.
 Most likely time (tm) : It is the time which the activity will take most
frequently, if performed a number of times.
 This time estimate lies between the optimistic and pessimistic time estimates.
 Reflects a situation where conditions are normal, things are as usual.
 Steps Involved in PERT calculations
 Identify the events and activities and prepare a suitable network for the given
problem.
 Events are numbered in ascending order from left to right.
 Obtain the various time estimates for each activity. They are most likely () , the
pessimistic () and optimistic () estimates.
 Compute the expected time () for each activity.

 Using the expected activity time estimates, determine the earliest event’s time () and
the latest event's time () for each event.
 Compute the float associated with each activity. The activities with zero float are the
critical activities. Determine critical path through the critical activities.
 Steps Involved in PERT calculations
 Find the total expected duration time (), by adding the time estimates for various
activities on the critical path.
 Find the variance of the time estimates of all activities.
 .
 Variance of the project duration () = Sum of variances of time estimates of all critical
activities.
 Find the probability of finishing the project on some fixed target by using the table of
normal distribution. The value of Z is obtained by

 where
Questions

G
Solution
Solution
 Questions
Assuming that the expected time are normally distributed, find the
critical path and project duration of
Solution
Solution
 Probability for Project completion by a target date

To find the probability for completing a project within a particular date, following assumptions are made,
 The project completion time follows a normal probability distribution.

 Activity times are independent. The project dates can be represented by a normal curve so that 50 % is

the chance for completing the project within the estimated project duration time.
 The Z value for finding the area from standard normal curve is obtained by the formula

 If the target date is beyond the estimated project duration, Z is positive and the probability for completion
within that due date is more 50%.

 If the target date is before the estimated project duration, Z is negative and the probability for completing the
project within the that due date is less than 50 %
Problems
Solution
Normal Area Curve
Solution
Problem
Solution
Solution
Solution
Comparison between PERT and CPM
PERT CPM
Emphasis is given on events Emphasis is given on activities
The time estimates are not so accurate and The time estimates for completion of
definite. activities are with fair degree of accuracy

The cost varies directly with time. The time The cost optimization is given prime
duration for completion depends on this cost importance
optimization.

It is a probabilistic model with uncertainty in It is a deterministic model with well known

activity duration activity times based upon the past experience

It is used for non repetitive jobs It is used for repetitive jobs

It is mainly used for planning and scheduling It is used for construction and business
research programmes problems.
 Importance of CPM and PERT
 Helps the management to concentrate their attention on the critical
activities and their completion in time.
 Provides the best way of planning and scheduling a project.
 Gives complete information about duration, slackness etc. of activities
 Suggests areas for increasing efficiency and reduction of costs.
 Helps to formulate new schedules when the existing schedules cannot
be met.
 Minimizes delay in completion of the project
Disadvantages of Network Techniques
 The realistic time estimates are not obtained.
 It is not easy to develop a clear logical network in some cases.
 The level of network details cannot be determined properly in some
cases.
 Trained personnel in the network methodology is necessary but it is
lacking in many managements
68 END OF PART

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