Project and Production Management

Module 2
Project Planning

Prof Arun Kanda & Prof S.G. Deshmukh,

Department of Mechanical Engineering,
Indian Institute of Technology, Delhi
 Module 2
Project Planning
1. Developing the Project 4. Scheduling Probabilistic
Network Activities
1. Work Break Down 1. PERT assumptions
Structure 2. Probability Statements
2. AOA & AON networks 5. Illustrative Examples
2. Basic Scheduling for AOA 6. Self Evaluation Quiz
networks 7. Problems for Practice
1. Critical Path 8. Further exploration
2. Floats
3. Basic Scheduling for AON
networks
1. Critical path
2. Floats
 FORMATION OF PROJECT
TEAM
• Appointment of Project Manager
• Selection of Project team members
• Briefing meetings amongst team members
• Broad consensus about scope of work and
time frame
• Development of work breakdown structure
and allocation of responsibilities
 WORK BREAKDOWN
STRUCTURE
A breakdown of the total project task
into components to establish
• How work will be done?
• How people will be organized?
• How resources would be allocated?
• How progress would be monitored?
ALTERNATIVE WAYS TO
BREAKDOWN WORK
 WORK BREAKDOWN
STRUCTURE

Project
System I System II System N

Subsystem Subsystem Subsystem

Task Task
Subtask Subtask Subtask
Work package Work package
 WORK BREAKDOWN
STRUCTURE
• Hardware orientation (Identification of
basic work packages)
• Agency orientation (Based on assignment
of responsibility to different agencies)
• Function oriented (e.g Design,
Procurement, Construction and
Commissioning)
 WORK BREAKDOWN
STRUCTURE (Continued)
• Generally a WBS includes 6-7 levels.
More or less may be needed for a
situation.
• All paths on a WBS do not go down to the
same level.
• WBS does not show sequencing of work.
• A WBS should be developed before
scheduling and resource allocation are
done.
 WORK BREAKDOWN
STRUCTURE (Continued)
• A WBS should be developed by individuals
knowledgeable about the work. This
means that levels will be developed by
various groups and the the separate parts
combined.
• Break down a project only to a level
sufficient to produce an estimate of the
required accuracy.
 ILLUSTRATIVE WORK
BREAKDOWN STRUCTURE
Missile
Guidance Rocket Launching
Warhead
control sys platform
Ballistic Propulsion Re entry
shell engine vehicle

I Stage Solid fuel II Stage

 MEANS OF PROJECT
REPESENTATION
• Project name and description.
• List of jobs that constitute the project.
• Gantt or bar chart showing when activities
take place.
• Project network showing activities, their
dependencies and their relation to the
whole. (A-O-A and A-O-N
representations)
 WHY USE PROJECT
NETWORKS ?
• A convenient way to show activities and
precedence in relation to the whole
project.
• Basis of project planning:
– Responsibility allocation
– Definition of subcontracting units
– Role of different players
• Basic scheduling and establishment of
work time tables
 WHY USE PROJECT
NETWORKS -II ?
• Critical path determination and selective
management control
– Deterministic vs probabilistic activity times
• Resource planning for projects
– Project crashing with time cost tradeoffs
– Resource aggregation
– Resource levelling
– Limited resource allocation
 WHY USE PROJECT
NETWORKS - III ?
• Project implementation:
– Time table for implementation
– Monitoring and reporting progress
– Updation of schedules and resources
– Coordination of work with different agencies
The project network is thus a common
vehicle for planning, communicating
and implementing the project right from
inception.
 EXAMPLE 1
Organizing a one day Seminar
Generate the list of jobs to be done:
1) Decide date ,budget, venue for seminar.
2) Identify speakers, participants.
3) Contact and finalize speakers.
4) Print seminar brochure.
5) Mail brochures to tentative participants
6) Estimate number of participants.
 Organizing a one day seminar
7) Decide menu for lunch, tea & coffee
8) Arrange for catering
9) Arrange projection facilities at venue.
10) Receive guests at registration.
11) Conduct seminar as per brochure
12) See off guests.
 EXAMPLE 1
Organizing a one day Seminar
Activity
Predecessors
1) Decide date ,budget, venue for seminar. --
2) Identify speakers, participants. --
3) Contact and finalize speakers. A2
4) Print seminar brochure. A1, A3
5) Mail brochures to tentative participants A4
6) Estimate number of participants. A5
Organizing a one day seminar

Activity
Predecessors
7) Decide menu for lunch, tea & coffee A6
8) Arrange for catering
A1,A7
9) Arrange projection facilities at venue. A6
10) Receive guests at registration. A8,
A9
11) Conduct seminar as per brochure A8, A9,
A10
 DRAWING THE PROJECT
NETWORK (A-O-A)

A10
A1 A9

1 2 3 4 5 6 7 8 9 10
A2 A3 A4 A5 A6 A7 A8 A11 A12
DEVELOPING THE PROJECT
NETWORK (A-O-N)

A1 A4 A5 A6 A7 A8

A9 A11 A12

A2 A3 A10
 EXAMPLE 2

Job Predecessors
a --
b -- 3
a d
c -- b 2
1 5
d a,b
e
e b,c c 4
 EXAMPLE 3

Job Predecessors
a -- 3 d
b
b --
c -- a f
1 2 5 6
d a,b
e a,c c
e
f a,b,c
4
 EXAMPLE 4

Job Predecessors
a --
b a 3
c a b
a c e
d a 1 2 5 6
e b, c, d d

DUMMIES FOR UNIQUENESS OF

ACTIVITY REPRESENTATION
 EXAMPLE 5

S T

DUMMIES FOR CREATION OF

A SINGLE SOURCE AND SINK
 THE ROLE OF DUMMIES IN
PROJECT NETWORKS
Role of Dummy I II III
Network type
A-O-A yes yes yes
A-O-N no no yes
I Correct representation of precedence
logic
II Uniqueness of activity representation
III Creation of single source/ sink
 EXAMPLE 6
Inconsistent Network

2 3 4

1 8

5 6 7

A closed loop in a project network

is a logical inconsistency.
 EXAMPLE 7
REDUNDANCY (A-O-N)

Job Predecessors
a -- b e
b a
c --
a d
d a, b, c ***********
e d
f d c f

Redundancy a in the predecessor set for activity d

could be removed thereby deleting arc a-d above
 PREREQUISITES FOR A
VALID PROJECT NETWORK
• NECESSARY REQUIREMENT
– The project network must not have any cycles
or loops, since these represent logical
inconsistencies in representation.
• DESIRABLE FEATURES
– The project network should have the minimum
number of dummies and no redundancies
since these unnecessarily clutter the network.
PROJECT MANAGEMENT

Basic Scheduling with

A-O-A Networks
 ALTERNATIVE PROJECT
REPRESENTATIONS
• Activity on Arc • Activity on Node
(A-O-A) (A-O-N)
• Arrow diagrams • Precedence networks
• Event oriented • Activity oriented
networks networks

activity, a
i j a
 ACTIVITY DURATIONS
• Deterministic (as in CPM)
– when previous experience yields fairly
accurate estimates of activity duration, eg
construction activity, market surveys.
• Probabilistic (as in PERT)
– when there is uncertainty in times, as for
instance in R&D activities, new activities being
carried out for the first time.
 TIME ESTIMATES
• Deterministic times
– A single time estimate is used for each
activity. This is taken from experts who have
prior knowledge and experience of the activity.
• Probabilistic times
– Three time estimates (optimistic, most likely
and pessimistic) are commonly used for each
activity based on the consensus of the group.
 EXAMPLE 1
Job Predecessors Duration (days)
a -- 2
b -- 3
c a 1
d a, b 4
e d 5
f d 8
g c, e 6
h c, e 4
i f, g, h 3
PROJECT NETWORK FOR
EXAMPLE 1 (A-O-A)

c h
1 4
a
2 g
e 5 6 i
b
d f 3
3
4 8
 CRITICAL PATH
• The longest path in the network
• Lower bound on the project duration
• Selective control for management of
project
• Can be determined by
– Enumeration of all paths in the network
– Event based computations (A-O-A networks)
– Activity based computations (A-O-N networks)
 NODE NUMBERING
FOR EXAMPLE 1 (A-O-A)

c h
1 4
a
2 g
e 5 6 i
b
d f 3
3
4 8
 PATH ENUMERATION

Level 0
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
 FORWARD PASS
• Initialization:
E1 = 0 (or the project start time S)
(This applies to all source nodes)
• Ej= Max (Ei+ tij) for all i before node j

( Set B(j))
Ej
j
B(j) Ei tij
i
 FORWARD PASS
EXAMPLE 1 (A-O-A)

c h
2 5 6
1 4
a
2 g 8
e 5 6 i
1 b
d f 3
3 3 4 7
4 8
 BACKWARD PASS
• Initialization:
Ln (or the latest occurrence of all ending
nodes)
= Project duration, T as determined in the
forward pass
• Li = Min (Lj-tij) over all successor
nodes j of the node i being
investigated, (set A(i))
tij A(i)
j
i Lj
Li
 BACKWARD PASS
EXAMPLE 1 (A-O-A)

2 12 16
c h
2 5 6
1 4 21
a
0 2 g 8
e 5 6 i
1 b 3 7 18
d f 3
3 3 4 7
4 8
 ACTIVITY SCHEDULE
FROM EVENT TIMES

Ei Ej
tij
i j
Li Lj

Early start of activity ij = ES(ij) = Ei FORWARD

Early finish of activity ij= EFij = ES(ij)+ tij PASS

Late finish of activity ij = LF(ij) = Lj BACKWARD

Late start of activity ij = LS(ij) = LF(ij) -tij PASS
 EARLY & LATE SCHEDULE
FOR EXAMPLE 1
Job duration ES EF LS LF TF
a 2 0 2 1 3 1
b 3 0 3 0 3 0
c 1 2 3 11 12 9
d 4 3 7 3 7 0
e 5 7 12 7 12 0
f 8 7 15 10 18 3
g 6 12 18 12 18 0
h 4 12 16 14 18 2
i 3 18 21 18 21 0
 GANTT CHART SHOWING
ACTIVITY SCHEDULE
A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
21
a
b ^^^^^^
c
d ^^^^^^^^^
e ^^^^^^^^^^^^^
f
g ^^^^^^^^^^^^^^^^
h
i
^^^^^^^^
 CRITICAL PATH
EXAMPLE 1 (A-O-A)

2 12 16
c h
2 5 6
1 4 21
a 3 12 18
0 2 g 8
e 5 6 i
1 b 3 7 18
d f 3 21
0 3 3 4 7
4 8
3 7 18
 EVENT SLACKS
Ei Ej
tij
i j

Li Lj

Ei Li Ej Lj

Slack on node i = Li - Ei
Slack on node j = Lj - Ej
 ACTIVITY FLOATS
Ei Ej
tij
i j
Li Lj
Ei Li Ej Lj

Total float = F1(ij) = Lj-Ei -tij

Safety float = F2(ij) = Lj- Li-tij
Free float = F3(ij) = Ej -Ei -tij
Independent float = F4(ij)
= Max (0, Ej -Li- tij)
FLOAT COMPUTATIONS
Ei Ej
tij

Li Lj
Total float = LS - ES = LF-EF of activity
Safety float =
Total float - Slack on preceding node
Free float =
Total float - Slack on succeeding node
Independent float =
Max (0, Total float - Slack on preceding
and succeeding nodes)
FLOATS FOR EXAMPLE 1
Job Total Safety Free
Independent
a 1 1 0 0
b 0 0 0 0
c 9 8 9 8
d 0 0 0 0
e 0 0 0 0
f 3 3 3 3
g 0 0 0 0
h 2 2 0 0
i 0 0 0 0
INTERPRETATION OF FLOATS
• An activity , in general, has both
predecessors and successors. Each of the
four kinds of float depends on how these
accommodate the activity.

Predecessors Successors

activity
FLOAT INTERPRETATION

SUCCESSORS
Early Late

Early Free Total

PREDECESSORS

Late Independent Safety

 ANOMALIES
ACTIVITY h FLOATS
Total Safety Free
18 Ind.
12 h
5 7 • 2 2 2 2
4
12 18
5 h
7 • 2 0 2 0
4
12 18
5 h 7 • 2 2 0 0
12 4 18
5 h 7
4
• 2 0 0 0
12 18
PROJECT MANAGEMENT

Basic Scheduling with

A-O-N Networks
 ALTERNATIVE PROJECT
REPRESENTATIONS
• Activity on Arc • Activity on Node
(A-O-A) (A-O-N)
• Arrow diagrams • Precedence networks
• Event oriented • Activity oriented
networks networks

activity, a
i j a
 SCHEDULING WITH
A-O-N NETWORKS
• Basic scheduling computations can be done on
both A-O-A or A-O-N networks.
• A-O-N networks are simpler to draw, though
they lack intuitive work flow interpretation of A-
O-A networks.
• There are no float anomalies in A-O-N networks.
• A-O-N networks are becoming more popular, in
computer packages,
• Lead easily to PDM with expanded precedence
relations FS , FF, SS, SF.
 EXAMPLE
Job Predecessors Duration (days)
a -- 2
b -- 3
c a 1
d a, b 4
e d 5
f d 8
g c, e 6
h c, e 4
i f, g, h 3
 PROJECT NETWORK
EXAMPLE (A-O-N)

a 2 c 1
g 6

4
d 4 5 h i 3
e
b 3

f 8
 FORWARD PASS
(A-O-N Networks)
• Initialization:
Early start(ES) for all beginning activities
= 0 (or the start date, S for the project)
• Early finish (EF) for activity = ES+ duration
• ES(j)= Max (EF all predecessors)

ES/EF ES/ EF
ES/EF i1 j
i2 ES/EF
ip
 FORWARD PASS
FOR EXAMPLE

a 2 c 1
g 6

4
d 4 5 h i 3
e
b 3

f 8
 BACKWARD PASS
(A-O-N Networks)
• Initialization
Project duration,T = Max (EF of ending jobs).
LF(all ending jobs) =T
• LS = LF- Duration
• LF = Min (LS of successors)

LS/LF

LS/LF LS/LF
LS/LF
 BACKWARD PASS
FOR EXAMPLE

2/3
0/2 12 / 18
a 2 c 1
g 6
3/7 18 / 21
7 / 12 12 / 16
0/3 d 4 5 h 4 i 3
e
b 3
7 / 15
f 8
 EARLY & LATE SCHEDULE
FOR EXAMPLE
Job duration ES EF LS LF TF
a 2 0 2 1 3 1
b 3 0 3 0 3 0
c 1 2 3 11 12 9
d 4 3 7 3 7 0
e 5 7 12 7 12 0
f 8 7 15 10 18 3
g 6 12 18 12 18 0
h 4 12 16 14 18 2
i 3 18 21 18 21 0
 CRITICAL PATH
FOR EXAMPLE

2/3
0/2 12 / 18
a 2 c 1 g 6
1 / 3 11 / 12 12 /18
3/7 18 / 21
7 / 12 12 / 16
4
0/3 d 4 5 h i 3
e
b 3 3/7 7 / 12 18 /21
7 / 15 14 / 18
0/ 3
f 8
10 / 18
 CRITICAL PATH
FOR EXAMPLE

a 2 c 1
g 6

4
d 4 5 h i 3
e
b 3

f 8
 GANTT CHART SHOWING
ACTIVITY SCHEDULE
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
21
a *** ]
b ^^^^^^
c ** ]
d ^^^^^^^^^
e ^^^^^^^^^^^^^
f ****************** ]
g ^^^^^^^^^^^^^^^
h ********** ]
i
^^^^^^^^^
INTERPRETATION OF FLOATS
• An activity , in general, has both
predecessors and successors. Each of the
four kinds of float depends on how these
accommodate the activity.

Predecessors Successors

activity
 FLOAT INTERPRETATION
SUCCESSORS
Early Late
Early Free Total
PREDECESSORS
Late Independent Safety
COMPUTATION OF FLOATS
ES/EF
i1
k1
LS/LF

ES/EF ES/EF
i2 k2
j
LS/LF
LS/LF ES/EF
im kn
LS/LF
Slack on preceding node= Max (LF of predecessors) -ES
Slack on succeeding node = LF- Min (ES of successors)
(in the corresponding A-O-A representation)
FLOATS FOR EXAMPLE
Job Total Safety Free
Independent
a 1 1 0 0
b 0 0 0 0
c 9 8 9 8
d 0 0 0 0
e 0 0 0 0
f 3 3 3 3
g 0 0 0 0
h 2 2 0 0
i 0 0 0 0
FLOAT COMPUTATIONS FOR
ACTIVITY a

Total Float = LS - ES = LF - EF =1
Safety float = Total Float - [Max (LF of predecessors)-ES]
= 1- (0 - 0) = 1
Free float = Total Float -[LF -Min(ES of successors)]
= 1 - (3-2) = 0
Independent float = Total float - both the latter terms
= 1 - (0+1) = 0
0/2 2/3
a c

1/3 3/7
d
FLOAT COMPUTATIONS FOR
ACTIVITY c

Total Float = LS - ES = LF - EF =9
Safety float = Total Float - [Max (LF of predecessors)-ES]
= 9- (3 -2) = 8
Free float = Total Float -[LF -Min(ES of successors)]
= 9 - (12-12) = 9
Independent float = Total float - both the latter terms
= 9 - (1+0) = 8
2/3 12 / 18
a c g

1/3 11 / 12 12 / 16
h
FLOAT COMPUTATIONS FOR
ACTIVITY f

Total Float = LS - ES = LF - EF =3
Safety float = Total Float - [Max (LF of predecessors)-ES]
= 3- (7 -7) = 3
Free float = Total Float -[LF -Min(ES of successors)]
= 3 - (18 - 18) = 3
Independent float = Total float - both the latter terms
= 3 - (0+0) = 3
18 / 21
7 / 15
d f i
3/7 10 / 18
FLOAT COMPUTATIONS FOR
ACTIVITY h

Total Float = LS - ES = LF - EF =2
Safety float = Total Float - [Max (LF of predecessors)-ES]
= 2- (12 - 12) = 2
Free float = Total Float -[LF -Min(ES of successors)]
= 2 - (18 - 18) = 2
Independent float = Total float - both the latter terms
= 2 - (0+0) = 2
c
11 / 12 12 / 16 18 / 21
e h i
7 / 12 14 / 18
 PRECEDENCE
DIAGRAMMMING METHODS
• Generalized precedence relations
– Start to Start (SS)
– Finish to Finish (FF)
– Start to Finish (SF)
– Finish to Start (FS)
• Permit partial or complete overlap of
activities
START TO START LAG (SS)

v1

u1 v2

u2
FINISH TO FINISH LAG (FF)

v1

u1 v2

u2
START TO FINISH LAG (SF)

v1

u1 v2

u2
FINISH TO START LAG (FS)

u v
 PDM EXAMPLE
COMPUTATIONS
SF 4
SS 3 B D FS 4
8 6
FF 5 FS 0
A FS 0 E F SS 3 G
10 12 SS 2 14 2
FF 5
FF 2 C SS 10
20
PROJECT MANAGEMENT

Project Scheduling with

Probabilistic Activity
Times
 UNCERTAIN ACTIVITY
DURATIONS
• For each activity in the project
three time estimates are obtained
–Optimistic time, a
–Most likely time, m
–Pessimistic time, b
 PERT TIME ESTIMATES
• Mean of activity duration =
(a + 4m + b) / 6
• Variance of activity duration =
{ (b - a) / 6}2
• Standard deviation of activity duration =
Sq. root of variance =
(b - a ) / 6
BETA DISTRIBUTION

a m b

f(t) = K(t-a)c (b - t)d , a <= t <=b

= 0, otherwise
[ a,b are the location parameters
c,d are the shape parameters ]
 WHY CHOOSE BETA ?
• The beta distribution is bounded on both
sides with non-negative intercepts.
• It is a uni-modal distribution.
• Permits flexibility of shapes by suitable
choice of location and shape parameters.
• Intuitive appeal.
• Easy approximations to mean and
variance.
OTHER POSSIBLE
DISTRIBUTIONS

• UNIFORM
• TRIANGULAR
• EXPONENTIAL
• NORMAL
• DISCRETE
• OTHERS ...
UNIFORM DISTRIBUTION

1/ (b-a)

a b

Mean = (a + b) / 2
Variance = (b - a)2 / 12
TRIANGULAR DISTRIBUTION

2/ (b-a)

a m b

Mean = (a + m + b) / 3
Variance = {(b -a)2 + (b - m)2 + (m -a)2}/36
= (a2 + m2 + b2 - am - ab - mb)/18
EXPONENTIAL DISTRIBUTION

m
f(t) = me -mt

Mean = 1/m
Variance = 1/m2
NORMAL DISTRIBUTION

N (mu, sigma 2)

mu
Mean = mu
Variance = sigma 2
DISCRETE DISTRIBUTION

p2
pn
p1 p3
---
t1 t2 t3 tn

Mean = p1 t1 + p2 t2 + ... + pn tn
Variance = p1 t12 + p2 t22 + pn tn2
- (Mean) 2
 BASIC PERT PROCEDURE - I
• Compute mean and variance of all jobs.
• Conduct forward and backward pass on
the project network with expected times of
all activities.
• Identify the Critical Path.
• Obtain variance of critical path by adding
variance of activities.
BASIC PERT PROCEDURE - II
• Obtain the distribution of the Project
Duration.
• Make probability statements about the
project
– Chances of meeting the target date.
– Probability of exceeding a given ceiling date.
– Probability that the project duration is
confined to an interval of time.
 AN EXAMPLE
Job Predecessors Time estimates Mean
Variance
a m b
------------------------------------------------------------------------------------------
A -- 2 4 8 4.33 1
B -- 4 6 10 6.33 1
C A 6 6 6 6.00 0
D A 2 8 14 8.00 4
E A 6 8 12 8.33 1
F B,C 3 6 9 6.00 1
G D,F 8 16 20 15.33 4
H D,F 4 4 4 4.00 0
I E,H 4 8 10 7.66 1
 SAMPLE NETWORK
(A-O-A)
E
2 5
A 8.33 I
4.33 D 7.66
1 4 H 6
6 C 8
B G
6.33 15.33
F 4
3
6
FORWARD & BACKWARD
PASS
E
2 5
A 8.33 I
4.33 D 7.66
1 4 H 6
6 C 8
B G
6.33 15.33
F 4
3
6
 CRITICAL PATH
4.33 20.33
E
2 5
A 8.33 I
0 4.33 24 31.66
4.33 D 7.66
1 4 H 6
6 C 8
B G
0 16.33 15.33 31.66
6.33 10.33
F 4
3
6
10.33 16.33
 DISTRIBUTION OF THE
PROJECT DURATION

• Project duration follows a Normal

Distribution with
Mean = 31.66 Variance = 6 = (2.45)2

-3 -2 -1 0 1 2 3

24.31 31.66 39.01

 CONFIDENCE INTERVALS
• Chances that the project is completed
within

• mean +/- 1 sigma 68% (29.41 --34.11)

• mean +/- 2 sigma 95% (26.76 -- 36.56)

• mean +/_ 3 sigma 99% (24.31 -- 39.01)

 PROBABILITY
STATEMENTS - I
• Probability of meeting a Target Date,
say 36 days
• Z (Standard normal deviate) =
(36 - 31.66)/2.45 = 4.34/2.45 = 1.77
• Area from normal tables = 0.9616
 PROBABILITY
STATEMENTS - II
• Probability of exceeding a ceiling, say
28 days
• Z (Standard normal deviate) =
(28 - 31.66)/2.45 = -3.66/2.45 = - 1.49
• Area from normal tables = 0.0681
 PROBABILITY
STATEMENTS - III
• Probability of duration lying in an interval,
say 28 to 36 days

• Area from normal tables =0.9616 - 0.0681

= 0.8935
 STANDARD PERT
ASSUMPTIONS
1. The activities are independent
2 The critical path contains a large no. of
activities so that we can invoke the Central
Limit Theorem.
3 .All activities not on the critical path are
ignored.
4. Activity times follow a Beta distribution.
5. The mean and variance of the activities are
given by (a+4m+b)/6 and [(b-a)/6]2.