Unit 3rd
1. INTRODUCTION TO ACTIVITY
PLANNING
1.1 Meaning of Activity Planning
Activity Planning is the process of:
• Identifying project activities
• Organizing them logically
• Estimating time and cost
• Scheduling them efficiently
It ensures the project is completed:
• On time
• Within budget
• With proper resource use
1.2 Objectives of Activity Planning
1. Break project into manageable tasks
2. Determine activity sequence
3. Estimate duration
4. Allocate resources
5. Identify critical path
6. Reduce uncertainty
1.3 Importance of Activity Planning
• Improves coordination
• Avoids confusion
• Identifies bottlenecks
• Enables monitoring
• Prevents delays
2. PROJECT SCHEDULES
2.1 Meaning of Project Schedule
A project schedule defines:
• When activities start
• When they finish
• How long they take
2.2 Components of Schedule
• Activity list
• Duration
• Dependencies
• Milestones
• Resources
2.3 Types of Project Schedules
1. Milestone Schedule
2. Detailed Schedule
3. Master Schedule
Live Example: Software Development Project
Project: Online Examination System
Activity Duration
Requirement Analysis 2 weeks
Design 3 weeks
Activity Duration
Development 8 weeks
Testing 4 weeks
Deployment 1 week
Total Duration = 18 weeks
3. ACTIVITIES
3.1 Definition of Activity
An activity is a task that:
• Consumes time
• Uses resources
• Produces output
3.2 Types of Activities
1. Predecessor Activity
2. Successor Activity
3. Parallel Activity
4. Dummy Activity
Example
In Banking App:
Login must be completed before:
• Fund Transfer
• Balance Check
4. SEQUENCING AND SCHEDULING
NETWORK PLANNING MODELS
4.1 Need for Network Planning
Helps to:
• Identify task relationships
• Find critical path
• Optimize schedule
4.2 Network Diagram Basics
Two types:
1. Activity on Node (AON)
2. Activity on Arrow (AOA)
Example Network
A (2 weeks)
↓
B (3 weeks) → D (4 weeks)
↓
C (5 weeks)
5. FORWARD PASS (EARLIEST TIME
CALCULATION)
5.1 Formula
Earliest Start (ES) = Max(EF of predecessors)
Earliest Finish (EF) = ES + Duration
Example
Activity A = 3 days
Activity B depends on A = 5 days
If A starts Day 0:
EF(A) = 0 + 3 = 3
ES(B) = 3
EF(B) = 3 + 5 = 8
6. BACKWARD PASS (LATEST TIME
CALCULATION)
6.1 Formula
Latest Finish (LF) = Min(LS of successors)
Latest Start (LS) = LF – Duration
Example
If project must finish by Day 20:
LF(C) = 20
LS(C) = 20 – 5 = 15
7. CRITICAL PATH METHOD (CPM)
7.1 Meaning
Critical Path = Longest path in network.
Activities on this path:
• Have zero slack
• Cannot be delayed
Diagram Example
Path 1: A → B → D = 2+3+4 = 9
Path 2: A → C → D = 2+5+4 = 11
Critical Path = A → C → D (11 weeks)
7.2 Importance of CPM
• Identifies critical activities
• Helps in time reduction
• Assists resource allocation
8. PERT TECHNIQUE
8.1 Meaning
PERT (Program Evaluation and Review Technique) handles uncertain time estimates.
8.2 Formula
TE = (O + 4M + P) / 6
Where:
O = Optimistic
M = Most Likely
P = Pessimistic
Example
O = 4 days
M = 6 days
P = 10 days
TE = (4 + 4×6 + 10) / 6
TE = (4 + 24 + 10) / 6
TE = 38 / 6 = 6.33 days
9. RESOURCE ALLOCATION
9.1 Meaning
Assigning resources (people, equipment) to activities.
9.2 Types
1. Resource Smoothing
2. Resource Leveling
Live Example
Project has:
• 3 developers
• 5 parallel tasks
Solution:
Reschedule tasks to match resource availability.
10. CREATION OF CRITICAL PATH
Steps:
1. List activities
2. Identify dependencies
3. Draw network
4. Perform forward pass
5. Perform backward pass
6. Identify zero slack activities
11. COST SCHEDULES
11.1 Cost-Time Trade-Off
Shorter duration = Higher cost
Longer duration = Lower cost
Example
Normal completion = 12 months = $500,000
Crash completion = 9 months = $650,000
PART B: RISK MANAGEMENT
12. INTRODUCTION TO RISK
MANAGEMENT
12.1 Meaning of Risk
Risk is an uncertain event that may:
• Positively affect
• Negatively affect project objectives
12.2 Types of Risks
1. Technical Risk
2. Financial Risk
3. Schedule Risk
4. Operational Risk
5. External Risk
Live Example
Cloud server failure during product launch.
13. RISK IDENTIFICATION
Methods
• Brainstorming
• Checklists
• Expert interviews
• SWOT analysis
Example
E-commerce site risks:
• Payment failure
• Cyber attack
• Delivery delay
14. RISK ASSESSMENT
14.1 Risk Probability and Impact Matrix
Probability Impact Risk Level
High High Critical
Low High Medium
Example
Cybersecurity breach:
Probability = Medium
Impact = Very High
Risk Level = High
15. RISK PLANNING
Risk Response Strategies
1. Avoid
2. Mitigate
3. Transfer
4. Accept
Example
Risk: Server downtime
Mitigation:
• Use backup servers
• Use cloud redundancy
16. PERT TECHNIQUE IN RISK
Used to estimate schedule risk.
Helps calculate:
• Expected time
• Variance
• Standard deviation
17. MONTE CARLO SIMULATION
17.1 Meaning
A statistical technique used to simulate multiple outcomes.
How it Works
• Randomly generates possible durations
• Simulates project multiple times
• Calculates probability of completion date
Example
Simulation run 1000 times:
Probability of finishing in 12 months = 65%
18. RISK MONITORING & CONTROL
Activities:
• Track identified risks
• Identify new risks
• Review mitigation effectiveness
• Update risk register
19. CASE STUDY
Project: National Digital Payment System
Risks:
• Cybersecurity threats
• Regulatory changes
• Technology failure
Risk Management Actions:
• Encryption protocols
• Backup data centers
• Compliance audits
Result:
Successful nationwide launch.
20. ADVANTAGES OF ACTIVITY
PLANNING & RISK MANAGEMENT
• Predictable outcomes
• Reduced delays
• Better decision making
• Cost control
• Improved success rate
21. LIMITATIONS
• Estimates may be inaccurate
• Risk prediction is uncertain
• Requires expertise
DETAILED WORK BREAKDOWN
STRUCTURE (WBS)
23.1 Meaning
WBS divides project into hierarchical components.
Example: Online Banking System
1. Online Banking System
1.1 Requirement Analysis
1.1.1 Stakeholder Meeting
1.1.2 Requirement Documentation
1.2 Design
1.2.1 Database Design
1.2.2 UI Design
1.3 Development
1.3.1 Login Module
1.3.2 Transaction Module
1.4 Testing
1.5 Deployment
23.2 Benefits of WBS
• Clear responsibility assignment
• Accurate cost estimation
• Better scheduling
• Easier monitoring
24. EARNED VALUE ANALYSIS (EVA)
24.1 Introduction
EVA measures project performance using:
• Scope
• Schedule
• Cost
24.2 Key Terms
Term Meaning
PV Planned Value
EV Earned Value
AC Actual Cost
24.3 Important Formulas
Cost Variance (CV) = EV – AC
Schedule Variance (SV) = EV – PV
Cost Performance Index (CPI) = EV / AC
Schedule Performance Index (SPI) = EV / PV
24.4 Numerical Example
Project Budget = $100,000
Planned completion = 50%
Actual completion = 40%
Actual Cost = $60,000
PV = 50% of 100,000 = 50,000
EV = 40% of 100,000 = 40,000
CV = 40,000 – 60,000 = –20,000 (Over budget)
SV = 40,000 – 50,000 = –10,000 (Behind schedule)
25. RESOURCE OPTIMIZATION
TECHNIQUES
25.1 Resource Leveling
Adjust start and finish dates to balance resource demand.
25.2 Resource Smoothing
Adjust non-critical activities without affecting deadline.
Live Example
Project needs 10 developers in Week 5 but only 6 available.
Solution:
Shift non-critical tasks to Week 6.
26. CRASHING TECHNIQUE
26.1 Meaning
Reducing project duration by adding extra resources.
Example
Normal Activity Duration = 10 days
Crash Duration = 7 days
Crash Cost = $2000 extra
Used when deadline is strict.
27. FAST TRACKING
27.1 Meaning
Performing tasks in parallel instead of sequentially.
Example
Start development before complete design approval.
Risk:
Increased rework.
ADVANCED CONTENT – RISK
MANAGEMENT
28. RISK BREAKDOWN STRUCTURE
(RBS)
28.1 Meaning
Hierarchical structure of risks.
Example
1. Technical Risk
1.1 Software Bugs
1.2 Integration Failure
2. External Risk
2.1 Regulatory Changes
2.2 Market Competition
29. RISK REGISTER FORMAT
Risk ID Description Probability Impact Response Owner
R1 Server failure High High Backup server IT Head
R2 Budget overrun Medium High Cost control PM
30. QUANTITATIVE RISK ANALYSIS
30.1 Expected Monetary Value (EMV)
EMV = Probability × Impact
Example
Risk: Cyber attack
Probability = 20%
Loss = $100,000
EMV = 0.2 × 100,000 = $20,000
31. DECISION TREE ANALYSIS
Example Scenario
Develop In-House Software:
• Success (70%) → Profit $200,000
• Failure (30%) → Loss $80,000
EMV = (0.7 × 200,000) – (0.3 × 80,000)
EMV = 140,000 – 24,000
EMV = 116,000
Decision: Develop in-house.
32. SENSITIVITY ANALYSIS
Identifies which variable affects project most.
Example:
If labor cost increases by 10%, profit reduces by 25%.
Conclusion:
Labor cost is highly sensitive variable.
33. MONTE CARLO DETAILED
EXPLANATION
Steps:
1. Identify uncertain variables
2. Assign probability distribution
3. Run simulation 1000+ times
4. Analyze distribution of outcomes
Example
Project completion simulation:
• 30% chance finish in 10 months
• 50% chance finish in 12 months
• 20% chance finish in 15 months
34. RISK BURNDOWN CHART
Used in Agile projects.
Shows:
• Risk exposure over time
Diagram:
Risk Level
|
|\
| \
| \
| \_____
----------------
Time
Risk decreases as project progresses.
35. CONTINGENCY RESERVE &
MANAGEMENT RESERVE
Contingency Reserve
For known risks.
Management Reserve
For unknown risks.
36. INDUSTRY LEVEL CASE STUDY
Project: Government Digital Identity System
Challenges:
• Data security
• Large user base
• Infrastructure scalability
Risk Strategy:
• Cloud redundancy
• Cybersecurity audits
• Phased rollout
Result:
System successfully implemented nationwide.
37. ETHICAL RISKS IN SOFTWARE
PROJECTS
• Data privacy violations
• AI bias
• Misuse of user information
• Non-compliance with regulations
38. MODERN TOOLS FOR ACTIVITY &
RISK MANAGEMENT
Tools Used:
• MS Project
• Primavera
• Jira
• Trello
• Asana
• RiskyProject (Monte Carlo tool)
39. COMMON REASONS FOR PROJECT
FAILURE
1. Poor planning
2. Underestimation
3. Lack of risk analysis
4. Scope creep
5. Poor communication
40. FINAL SUMMARY
Activity Planning ensures:
• Proper scheduling
• Critical path identification
• Resource balance
• Cost optimization
Risk Management ensures:
• Uncertainty control
• Better decision making
• Reduced project failure