PROJECT MANAGEMENT 21ME651

INTRODUCTION:

Network analysis is a powerful tool used in project management and operations research to
plan, manage, and control projects. It involves mapping out the tasks or activities in a project
and their interdependencies, allowing project managers to visualize and analyse the
workflow. Network analysis helps in identifying the critical path, optimizing resource
allocation, and minimizing project duration. Two primary techniques used in network
analysis are the Critical Path Method (CPM) and Program Evaluation and Review Technique
(PERT).

NETWORK CONSTRUCTION

Network construction is the foremost step of the Network analysis with PERT and CPM. A
network is the graphical representation of the project activities arranged in a logical sequence,
depicting all the interrelationships among them. A network consists of activities and events.
Network construction is the foremost step of network analysis. Here different terms of a
network are explained below.

Activity

An activity is a physically identifiable part of a project which consumes both time and
resources. An arrow in a network diagram represents activity. The head of an arrow
represents the start of the activity, and the tail of the arrow represents its end. The activity
description and its estimated completion time are written along the arrow. Activity in the
network can be represented in several ways: (i) by numbers of its head and tail events (i.e.,
10-20 etc.), and (ii) by a letter code (i.e., A, B etc.). All those activities, which must be
completed before the start of the activity under consideration, are called their predecessor
activities. All those activities, which must follow the activity under consideration, are called
their successor activities.

An activity used to maintain the pre-defined precedence relationship only during the
construction of the project network is called a dummy activity. A dotted arrow represents a
dummy activity and does not consume time and resources.

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An unbroken chain of activities between any two events is called a path.

Event

AN event is a moment of time at which the start or end of the activity is completed in PERT
and CPM. An event represents the accomplishment of some task. In a network diagram, the
beginning and end of an activity are represented as events. Each event is represented as a
node in a network diagram. An event does not consume any time or resources. Each network
diagram starts with an initial event and ends at a terminal event.

Each node is represented by a circle and numbered using Fulkerson’s Rule. The following
steps are involved in the numbering of the nodes.

 The initial event, which has all outgoing arrows and no incoming arrow, is numbered
1.
 Delete all the arrows from the node just numbered (i.e., 1). This step will create some
more nodes (at least one) in the initial events. Number these events in ascending order
(i.e., 2, 3 etc.).
 Continue the process until the final or terminal node with all arrows coming in, with
no arrow going out, is numbered.

As a recommendation, it must be noted that most of the projects are liable for modifications,
and hence there should be scope for adding more events and numbering them without causing
any inconsistency in the network. This is achieved by skipping the numbers (i.e., 10, 20, 30).

Rules for Drawing a Network Diagram

As we know, drawing a network diagram is the foremost step of network analysis. Network
analysis is required to determine the project’s critical duration and path. Here some rules for
the drawing of a network diagram are given below.

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Rule 1: Each activity is represented by one and only one arrow in the network.

Rule 2: No two activities can be identified by the same end events.

Rule 3: Precedence relationships among all activities must always be maintained.

Rule 4: Dummy activities can only be used to maintain precedence relationships when
required. Their use should be minimized in the network diagram.

Use of Dummy Activities

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Rule 5: Looping among the activities must be avoided.

Fulkerson’s Rule for Numbering Events

Fulkerson’s rule provides a systematic way to number the events (nodes) in a network
diagram to ensure a logical flow of activities. The rules are as follows:

1. Start with Event 1: Begin numbering with the initial event (usually the project's start).
2. Number Events Sequentially: Assign numbers to subsequent events, ensuring each event
has a higher number than any event that precedes it.
3. Avoid Reuse of Numbers: Each event should have a unique number.
4. Ensure Logical Flow: The numbering should reflect the logical sequence of activities,
preventing backward references.

AON and AOA Diagrams

There are two main types of network diagrams used in project management: Activity on
Node (AON) and Activity on Arrow (AOA).

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AON (Activity on Node) Diagram

In AON diagrams, nodes represent activities, and arrows represent the dependencies between
them. This method is also known as the precedence diagramming method (PDM).

Characteristics:

 Nodes are activities.

 Arrows show the sequence of activities.
 Easier to understand and modify.
 Widely used in modern project management software.

AOA (Activity on Arrow) Diagram

In AOA diagrams, arrows represent activities, and nodes represent the start and end points of
these activities. This method is also known as the arrow diagramming method (ADM).

Characteristics:

 Arrows are activities.

 Nodes show the sequence and dependencies.
 Requires dummy activities to maintain dependencies.
 Traditionally used in PERT.

Dummy Activities: Dummy activities are used in AOA diagrams to show dependencies
between activities without representing actual work. They are represented by dashed arrows
and have zero duration.

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Critical Path Method (CPM)

The Critical Path Method (CPM) is a step-by-step project management technique used to plan
and control a project's schedule. It identifies the longest stretch of dependent activities and
measures the time required to complete them from start to finish, thereby determining the
shortest possible project duration. The critical path is the sequence of project activities that
adds up to the longest overall duration, dictating the minimum time necessary to complete the
project.

Steps to Determine the Critical Path

1. List Activities: Identify all activities required to complete the project.
2. Determine Dependencies: Identify which activities depend on the completion of
others.
3. Draw the Network Diagram: Use AON or AOA to visualize the project activities
and their dependencies.
4. Estimate Durations: Assign time estimates to each activity.
5. Calculate Early Start (ES) and Early Finish (EF):
o ES: The earliest time an activity can start.
o EF: The earliest time an activity can finish (EF = ES + Duration).
6. Calculate Late Start (LS) and Late Finish (LF):
o LS: The latest time an activity can start without delaying the project.
o LF: The latest time an activity can finish without delaying the project (LS =

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LF - Duration).
7. Identify the Critical Path: The path through the network with the longest duration
from start to finish, where ES = LS and EF = LF for all activities on this path.

Example Calculation
Consider a simplified project with the following activities and durations:
Activity Duration Predecessors
A 3 days -
B 2 days A

C 4 days A
D 1 day B
E 2 days C
F 3 days D, E

Step-by-Step Calculation:
1. List Activities:
o Activities: A, B, C, D, E, F
o Durations: Given in the table above
o Predecessors: Given in the table above
2. Draw the Network Diagram:
o Start with node 1 (start event).
o Draw arrows to represent activities and connect nodes based on dependencies.
3. Calculate Early Start (ES) and Early Finish (EF):
o For A:
 ES = 0
 EF = ES + Duration = 0 + 3 = 3
o For B:
 ES = EF of A = 3
 EF = ES + Duration = 3 + 2 = 5
o For C:

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 ES = EF of A = 3
 EF = ES + Duration = 3 + 4 = 7
o For D:
 ES = EF of B = 5
 EF = ES + Duration = 5 + 1 = 6
o For E:
 ES = EF of C = 7
 EF = ES + Duration = 7 + 2 = 9
o For F:
 ES = max (EF of D, EF of E) = max (6, 9) = 9
 EF = ES + Duration = 9 + 3 = 12
4. Calculate Late Start (LS) and Late Finish (LF):
o For F:
 LF = EF of F = 12
 LS = LF - Duration = 12 - 3 = 9
o For E:
 LF = LS of F = 9
 LS = LF - Duration = 9 - 2 = 7
o For D:
 LF = LS of F = 9
 LS = LF - Duration = 9 - 1 = 8
o For C:
 LF = min(LS of E, LS of D) = min(7, 8) = 7
 LS = LF - Duration = 7 - 4 = 3
o For B:
 LF = LS of D = 8
 LS = LF - Duration = 8 - 2 = 6
o For A:
 LF = min(LS of B, LS of C) = min(6, 3) = 3
 LS = LF - Duration = 3 - 3 = 0
5. Identify the Critical Path:

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o The critical path is the path with the longest duration where ES = LS and EF =
LF.
o In this case, the critical path is A → C → E → F, with a total duration of 12
days.
Floats
Floats (or slack) indicate the amount of time an activity can be delayed without affecting the
overall project completion time. There are two main types of float:
1. Total Float (TF): The total amount of time an activity can be delayed without
delaying the project completion.
o TF = LS - ES (or) LF - EF
2. Free Float (FF): The amount of time an activity can be delayed without delaying the
start of any subsequent activities.
o FF = ES of next activity - EF of current activity
Example 1
Determine the early start and late start in respect of all node points and identify critical path
for the following network.

Solution
Calculation of E and L for each node is shown in the network

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Normal EarliestTime Latest Time

Activity Float
Time Start Finish Start Finish
Time(Li-
(i,j) (Dij)
(Ei) (Ei+Dij) (Li-Dij) (Li) Dij)-Ei
(1, 2) 10 0 10 0 10 0
(1, 3) 8 0 8 1 9 1
(1, 4) 9 0 9 1 10 1
(2, 5) 8 10 18 10 18 0
(4, 6) 7 9 16 10 17 1

(3, 7) 16 8 24 9 25 1
(5, 7) 7 18 25 18 25 0
(6, 7) 7 16 23 18 25 2
(5, 8) 6 18 24 18 24 0
(6, 9) 5 16 21 17 22 1
(7, 10) 12 25 37 25 37 0
(8, 10) 13 24 37 24 37 0
(9, 10) 15 21 36 22 37 1

From the table, the critical nodes are (1, 2), (2, 5), (5, 7), (5, 8), (7, 10) and (8, 10)

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From the table, there are two possible critical paths

i. 1 → 2 → 5 → 8 → 10
ii. 1 → 2 → 5 → 7 → 10

Example 2
Find the critical path and calculate the slack time for the following network

Normal Earliest Time Latest Time Float Time (Li -

Activity(i, j) Time Start Finish Start Finish Dij ) - Ei
(Dij) (Ei) (Ei + Dij ) (Li - Dij ) (Li)

(1, 2) 2 0 2 5 7 5
(1, 3) 2 0 2 0 2 0
(1, 4) 1 0 1 6 7 6
(2, 6) 4 2 6 7 11 5
(3, 7) 5 2 7 3 8 1
(3, 5) 8 2 10 2 10 0
(4, 5) 3 1 4 7 10 6
(5, 9) 5 10 15 10 15 0
(6, 8) 1 6 7 11 12 5
(7, 8) 4 7 11 8 12 1

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(8, 9) 3 11 14 12 15 1

From the above table, the critical nodes are the activities (1, 3), (3, 5) and (5, 9)

Thecritical path is1 → 3→5 → 9

Example 3

A project has the following times schedule

Activity Timesinweeks Activity Timesinweeks

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(1– 2) 4
(5– 7) 8
(1– 3) 1
(6– 8) 1
(2– 4) 1
(7– 8) 2
(3– 4) 1
(8– 9) 1
(3– 5) 6
(8– 10) 8
(4– 9) 5
(9– 10) 7
(5– 6) 4

Construct the network and compute

1. TE and TL for each event
2. Float for each activity
3. Critical path and its duration

Solution

The network is

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EventNo.: 1 2 3 4 5 6 7 8 9 10

TE: 0 4 1 5 7 11 15 17 18 25
TL: 0 12 1 13 7 16 15 17 18 25

Float=TL(Headevent)–TE (Tailevent) –Duration

Activity Duration TE(Tailevent) TL(Headevent) Float

(1– 2) 4 0 12 8

(1– 3) 1 0 1 0

(2– 4) 1 4 13 8

(3– 4) 1 1 13 11

(3– 5) 6 1 7 0

(4– 9) 5 5 18 8

(5– 6) 4 7 16 5

(5– 7) 8 7 15 0

(6– 8) 1 11 17 5

(7– 8) 2 15 17 0

(8– 9) 1 17 18 0

(8– 10) 8 17 25 0

(9– 10) 7 18 25 0

Theresultantnetworkshowsthecriticalpath

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Thetwocritical pathsare

i. 1 → 3 → 5 →7 → 8 → 9 →10

ii. 1 → 3 → 5 → 7 → 8 →10

PROGRAM EVALUATION AND REVIEW TECHNIQUE (PERT)

PERT is a project management tool used to plan, schedule, and control complex projects. It focuses
on identifying the minimum time needed to complete a project by accounting for uncertainties in
activity durations. PERT is particularly useful in projects where time estimates are uncertain and
involves calculating the expected time for each activity using three-time estimates: optimistic, most
likely, and pessimistic.

Key Concepts in PERT

1. Optimistic Time (t0): The shortest time in which an activity can be completed if everything
goes well.
2. Most Likely Time (tm): The best estimate of the time required to complete an activity,
assuming normal conditions.
3. Pessimistic Time (tp): The longest time an activity might take if everything goes wrong.

Calculating Expected Duration

The expected duration (Te) of an activity in PERT is calculated using the formula:
Te=(t0+4 tm+ tp) /6
This formula provides a weighted average, giving more importance to the most likely time.

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Example Calculation
Consider an activity with the following time estimates:
 Optimistic time (O) = 3 days
 Most likely time (M) = 5 days
 Pessimistic time (P) = 9 days
The expected duration (Te) is:
Te= (3+4*5+9)/6 =5.33 days

Project Duration and Variance

The expected project duration is the sum of the expected durations of activities along the critical path.
The variance of each activity's duration helps in assessing the uncertainty in the project's completion
time. The variance (σ²) for an activity is calculated as:
σ2={(P−O)/6}2

Total Project Variance

The total project variance is the sum of the variances of the activities on the critical path.

Determining Probability of Completing a Project

The probability of completing a project by a specific time (T) can be calculated using the standard
normal distribution (Z). The Z-value is calculated as:

Z = (T-Te)/ √∑σ2
Where:
 T = Desired completion time
 Te = Expected project duration
 ∑σ2 = Sum of variances of activities on the critical path

Predicting Completion Time

To predict the completion time with a specific probability, we can rearrange the Z formula:

T=Te+Z×√∑σ2

Crashing in Project Management

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Crashing is a project management technique used to shorten the schedule of a project without
changing its scope. This is done by allocating additional resources to critical path activities to
reduce their durations, thereby reducing the overall project duration. Crashing typically
involves additional costs, so it's essential to balance the trade-off between the reduced project
duration and the increased costs.

Steps to Crash a Project

1. Identify the Critical Path: Determine the longest path through the project network,
as reducing the duration of activities on this path will shorten the project duration.
2. Identify Crashable Activities: Identify which activities on the critical path can be
shortened and the associated costs.
3. Calculate the Crash Cost Per Unit Time: For each crashable activity, determine the
cost to reduce its duration by one unit of time (e.g., one day). This is calculated as:

Crash Cost Per Unit Time = (Crash Cost−Normal Cost) /

(Normal Duration−Crash Duration)

4. Select the Least Expensive Activity to Crash: Start by crashing the activity with the
lowest crash cost per unit time.
5. Update the Project Schedule: Adjust the project schedule to reflect the reduced
activity durations and recalculate the critical path.
6. Repeat as Necessary: Continue crashing activities, recalculating the critical path and
updating the schedule until the desired project duration is achieved or no further
crashing is cost-effective.

Example1

For the project

Task: A B C D E F G H I J K

Leasttime: 4 5 8 2 4 6 8 5 3 5 6

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Greatesttime: 8 10 12 7 10 15 16 9 7 11 13

Most likelytime: 5 7 11 3 7 9 12 6 5 8 9

Findtheearliest andlatest expectedtimeto eachevent andalsocritical pathin

thenetwork.

Solution

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Greatesttime Most likely Expectedtime

Task Leasttime(t0)
(tp) time(tm) (to +tp+4tm)/6
A 4 8 5 5.33
B
5 10 7 7.17
C
8 12 11 10.67
D
E 2 7 3 3.5
F
4 10 7 7
G
6 15 9 9.5
H
IJ 8 16 12 12
K
5 9 6 6.33

3 7 5 5

5 11 8 8

6 13 9 9.17

Expected Start Finish

Task Totalfloat
time(te) Earliest Latest Earliest Latest

A 5.33 0 0 5.33 5.33 0

B 7.17 0 8.83 7.17 16 8.83

C 10.67 5.33 5.33 16 16 0

D 3.5 0 10 3.5 13.5 10

E 7 16 16 23 23 0

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F 9.5 3.5 13.5 13 23 10

G
12 3.5 18.5 15.5 30.5 15
H
6.33 23 23 29.33 29.33 0
IJ
K 5 23 25.5 28 30.5 2.5

8 28 30.5 36 38.5 2.5

9.17 29.33 29.33 31.5 38.5 0

Thenetworkis

Thecritical path is A→C→E → H→ K

Example 2

Mostoptimistictime Mostpessimistictime Most likelytime

Activity
(a) (b) (m)
(1– 2) 1 5 1.5

(2– 3) 1 3 2

(2– 4) 1 5 3
(3 – 5) 3 5 4
(4 – 5) 2 4 3
(4 – 6) 3 7 5
`
(5 – 7) 4 6 5
(6 – 7) 6 8 7
(7 – 8) 2 6 4
(7 – 9) 5 8 6
(8 – 10) 1 3 2
(9 – 10) 3 7 5

Solution

te v
Activity (a) (b) (m) (4m)
(a+b+4m)/6 [(b – a)/ 6]2
(1– 2) 1 5 1.5 6 2 4/9

(2– 3) 1 3 2 8 2 1/9

(2– 4) 1 5 3 12 3 4/9

(3– 5) 3 5 4 16 4 1/9

(4– 5) 2 4 3 12 3 1/9

(4– 6) 3 7 5 20 5 4/9

(5– 7) 4 6 5 20 5 1/9

(6– 7) 6 8 7 28 7 1/9

(7– 8) 2 6 4 16 4 4/9

(7– 9) 5 8 6 24 6.17 1/4

(8– 10) 1 3 2 8 2 1/9

(9– 10) 3 7 5 20 5 4/9

`

Thecritical path=1 →2→ 4 → 6→ 7 →9 →10

Example 3

Calculate the variance and the expected time for each activity

Solution
te v
Activity (to) (tm) (tp)
(to+tp+4tm)/6 [(tp– to) / 6]2
(1– 2) 3 6 10 6.2 1.36

(1– 3) 6 7 12 7.7 1.00

(1– 4) 7 9 12 9.2 0.69

`
(2 – 3) 0 0 0 0.0 0.00
(2 – 5) 8 12 17 12.2 2.25
(3 – 6) 10 12 15 12.2 0.69
(4 – 7) 8 13 19 13.2 3.36
(5 – 8) 12 14 15 13.9 0.25
(6 – 7) 8 9 10 9.0 0.11
(6 – 9) 13 16 19 16.0 1.00
(8 – 9) 4 7 10 7.0 1.00
(7 – 10) 10 13 17 13.2 1.36
(9 – 11) 6 8 12 8.4 1.00
(10 – 11) 10 12 14 12.0 0.66

Applications of CPM / PERT

these methods have been applied to a wide variety of problems in industries and have
found acceptance even in government organizations. These include
 Construction of a dam or a canal system in a region
 Construction of a building or highway
 Maintenance or overhaul of airplanes or oil refinery
 Space flight
 Cost control of a project using PERT / COST
 designing a prototype of a machine
 Development of supersonic planes

Advantages and Disadvantages of PERT/CPM

PERT/CPM has the following advantages
 A PERT/CPM chart explicitly defines and makes visible dependencies (precedence
relationships) between the elements,
 PERT/CPM facilitates identification of the critical path and makes this visible,
 PERT/CPM facilitates identification of early start, late start, and slack for each
activity
`
 PERT/CPM provides for potentially reduced project duration due to better
understanding of dependencies leading to improved overlapping of activities and
tasks where feasible.

PERT/CPM has the following disadvantages:

 There can be potentially hundreds or thousands of activities and individual dependency
relationships,
 The network charts tend to be large and unwieldy requiring several pages to print and
requiring special size paper,
 The lack of a timeframe on most PERT/CPM charts makes it harder to show status although
colours can help (e.g., specific colour for completed nodes),
 When the PERT/CPM charts become unwieldy, they are no longer used to manage the
project.