Network Models Study Notes
Introduction
Definition: Network models use nodes (circles) and arcs/branches (lines) to represent
and solve management science problems visually.
Purpose: Model complex projects, providing a graphical display for planning, scheduling,
and monitoring.
Advantages: Easier to solve than other models, visually intuitive.
Network Techniques: PERT and CPM
PERT (Program Evaluation and Review Technique):
o Developed by US Navy (1958) for Polaris missile program.
o Focus: Minimize project completion time with uncertain activity durations.
o Uses probabilistic time estimates (optimistic, most likely, pessimistic).
o Best for non-repetitive tasks (e.g., R&D).
CPM (Critical Path Method):
o Developed by DuPont for chemical plant projects.
o Focus: Trade-off between project cost and completion time.
o Uses deterministic (single) time estimates.
o Best for repetitive tasks with predictable durations (e.g., production
management).
Similarities: Both use network diagrams, calculate slack/float, identify critical paths, and
guide project monitoring.
Differences: PERT uses probabilistic times; CPM uses deterministic times.
Objectives of Project Scheduling
Determine earliest start and finish times for activities.
Estimate project completion likelihood within a deadline.
Find minimum-cost schedules or minimum completion time within budget.
Analyze impacts of activity delays or time reductions.
Gantt Chart
Definition: A simple tool for planning and scheduling, showing activity timelines.
Advantages: Easy graphical representation of activity schedules.
Limitations: Does not show activity interdependencies or progress details clearly.
Use: Best for simple projects, may delay completion if activities are strictly sequential.
Network Components
Activity: Tasks requiring resources and time (e.g., labor, paperwork).
Event (Node): Start or end points of activities, instantaneous (e.g., project milestones).
Network: Combination of activities and events, showing precedence relationships.
Dummy Activity: No resources, used to maintain logical network structure (e.g., to
clarify precedence).
Network Construction
Logic: Based on technical dependencies, not time-based assumptions.
Example 1 (Simple Network):
o Activities: A (Buy Plastic Body, -), B (Design Component, -), C (Make Component,
B), D (Assemble Product, A,C).
o Network: A and B start concurrently; C follows B; D follows A and C.
Example 2 (Complex Network):
o Activities: A (-), B (-), C (B), D (A,C), E (C), F (C), G (D,E,F).
o Network includes dummy activity to clarify G’s predecessors (D, E, F).
Scheduling with Activity Times
Key Metrics:
o Earliest Start (ES): Earliest time an activity can start, based on the largest EF of
predecessors.
o Earliest Finish (EF): EF = ES + activity time (t).
o Latest Finish (LF): Latest time an activity can finish without delaying the project,
based on smallest LS of successors.
o Latest Start (LS): LS = LF - t.
o Slack/Float: Time an activity can be delayed without affecting project completion
(LS - ES or LF - EF).
Critical Path: Longest path through the network, with zero slack activities (e.g.,
A→E→F→G→I in example, 26 weeks).
Example:
o Activities: A (5), B (6), C (4, A), D (3, A), E (1, A), F (4, E), G (14, D,F), H (12, B,C), I
(2, G,H).
o Critical Path: A→E→F→G→I (26 weeks).
o Slack: B (6), C (3), D (2), H (3); critical activities (A, E, F, G, I) have zero slack.
Critical Path Analysis
Critical Path: Sequence of activities with zero slack, determining minimum project
completion time.
Importance:
o Identifies critical activities that must stay on schedule.
o Delays in critical activities extend project duration.
o Non-critical activities can be delayed up to their slack without impacting the
project.
Resource Management:
o Speed up critical activities to shorten project time.
o Save resources on non-critical activities up to slack limits.
o Total float belongs to the path, not individual activities.
CPM Example (ABC Computers)
Project: Design, manufacture, and market a new computer model.
Activities: A (Prototype Design, 90 days), B (Purchase Materials, 15, A), C (Manufacture
Prototypes, 5, B), D (Design Revision, 20, C,G), E (Initial Production, 21, D), F (Staff
Training, 25, A), G (Staff Input, 14, C,F), H (Sales Training, 28, D), I (Pre-Production
Advertising, 30, A), J (Post-Redesign Advertising, 45, D,I).
Critical Path: A→F→G→D→J (194 days).
Slack: I (29), B (5), C (5), E (24), H (17).
Delays:
o Single delay: G (5 days, critical) → 5-day project delay; E (15 days, 24 slack) → no
delay.
o Multiple delays: E (30 days) and I (30 days) → 6-day delay (max of 6, 1); B (4 days)
and C (4 days, shared 5 slack) → 3-day delay.
PERT for Uncertainty
Time Estimates:
o Optimistic (a), Most Likely (m), Pessimistic (b).
o Expected Time (TE): (a + 4m + b) / 6.
o Variance (V): [(b - a) / 6]².
o Standard Deviation (σ): √V.
Example:
o Activities: a (10, 22, 22; TE=20, V=4), b (20, 20, 20; TE=20, V=0), c (4, 10, 16;
TE=10, V=4), etc.
o Critical Path: a→d→j (TE = 20 + 15 + 8 = 43, V = 4 + 25 + 4 = 33).
o Probability of meeting 50-day deadline:
Z = (50 - 43) / √33 ≈ 1.22 → P = 0.888 (88.8% chance).
o Deadline for 95% confidence:
Z = 1.645, D = 43 + 1.645 × √33 ≈ 52.45 days.
CPM vs. PERT
Aspect CPM PERT
Time Estimates Single, deterministic Three estimates, probabilistic
Use Case Repetitive tasks (e.g., construction) Non-repetitive tasks (e.g., R&D)
Focus Minimize cost Meet time targets, estimate completion
Calculations Float, critical path Float, critical path, variance
Benefits of CPM/PERT
Provides a consistent framework for planning, scheduling, and monitoring.
Shows task interdependencies and critical activities.
Identifies project completion date and activities with slack.
Ensures resource coordination to avoid conflicts.
Supports parallel task execution to meet deadlines.