Cr

it
icalPat
hAnal
ysi
sCPA(
Net
wor
kAnal
ysi
s)
Cr
it
ical
Pat
hAnal
ysi
s(CPA)i
sapr
ojectmanagementt
ool
that
:

• Setsoutal
ltheindi
vi
dualact
ivi
ti
esthatmakeupalargerproj
ect.
• Showstheor deri
nwhichact
ivi
ti
eshavetobeundertaken.
• Showswhichact i
vi
ti
escanonlytakenpl
aceonceotheracti
vi
ti
eshav
ebeen
completed.
• Showswhi chact i
vi
ti
escanbeundert
akensimul
taneousl
y,t
herebyreduci
ngt
he
overal
lti
met akentocompletet
hewholeproj
ect
.
• Showswhencer tai
nresour
ceswil
lbeneeded–forexample,acranetobehi
red
forabuil
dingsite.

I
nordertoconst
ructaCPA,i
tisnecessar
ytoest
imat
et heel
apsedt
imef
oreachact
ivi
ty
–thati
sthetimetakenf
rom commencementtocompleti
on.

Thent
heCPAi
sdr
awnupabasedondependenci
essuchas:

• Theavail
abi
li
tyoflabourandotherr
esources
• Leadti
mesf ordel
iver
yofmaterial
sandot herser
vices
• Seasonalf
actors–suchasdr yweatherr
equiredinabuil
dingpr
oject

OncetheCPAi sdrawnup, i
tispossi
blet
oseet heCRITI
CALPATHi tsel
f–t hi
sisa
rout
ethroughtheCPA, whi
chhasnospar eti
me( cal
led‘
FLOAT’ or‘
slack’)i
nanyofthe
acti
vi
ti
es.Inot
herwor ds,
ifther
eisanydelaytoanyoftheacti
vit
iesont hecri
ti
cal
path,
thewholeproj
ectwill
bedelayedunlesst
hef i
rm makesotherchangestobr i
ngthe
proj
ectbackontrack.

Thetotalt
imeal
ongt
hiscri
ti
cal
pat
hisal
sot
hemi
nimum t
imei
nwhi
cht
hewhol
e
proj
ectcanbecompl
eted.

SomebranchesontheCPAmayhav eFLOAT,
whi
chmeanst
hatt
her
eissomespar
e
ti
meavail
ablef
ortheseact
ivi
ti
es.

Whatcanabusi
nessdoi
fapr
ojecti
sdel
ayed?

• Fi
rst
ly,
theCPAi
shel
pful
becausei
tshowst
hel
i
kel
yimpactont
hewhol
epr
oject
i
fnoact
ionwer
etaken.

• Secondl
y,i
fther
eisf
loatel
sewher
e,i
tmi
ghtbepossi
blet
oswi
tchst
afff
rom
anot
heract
ivi
tyt
ohel
pcat
chupont
hedel
ayedact
ivi
ty.

• Asar
ule,
mostpr
oject
scanbebr
oughtbackont
rackbyusi
ngext
ral
abour–
ei
therbyhi
ri
ngaddi
ti
onal
peopl
eorov
ert
ime.Not
e,t
her
ewi
l
lbeusual
l
ybean
 extracost.
Alternat
ivesuppl
i
erscanusual
l
ybef
ound–butagai
n,i
tmi
ghtcostmor
etoget
urgenthelp.

Thekeyr
ulesofaCPA
• Nodesar
enumber
edt
oident
if
yeachoneandshowt
heEar
li
estSt
artTi
me(
EST)
oftheacti
viti
est hatimmedi atel
yfoll
owt henode,andtheLat
estFi
nishTime(LFT)
oftheimmedi atelyprecedingactiv
iti
es
• TheCPAmustbegi nandendonone‘ node’–seebelow
• Theremustbenocr ossingactiv
iti
esintheCPA
• Eastacti
vit
yisl abel
ledwi t
hi t
snameeg‘ pr
intbr
ochure’
,ori
tmaybegi v
enalabel,
suchas‘D’,below.
• Theactiv
iti
esont hecrit
icalpathareusuall
ymar kedwitha‘
//’

I
ntheexampl
ebel
ow

• TheNodeisnumber3
• TheESTfort
hefoll
owingact i
vit
iesi
s14day s
• TheLFTfort
heprecedingactivi
ti
esis16days
• Ther
eis2days’f
loatinthiscase(di
ffer
encebetweenESTandLFT)
• Theact
ivi
tyt
hatfol
lowst henodeislabel
led‘
D’andwil
ltake6day
s
Asimpleexample–bakingaloafofbread
Herei
sasi mpl
eexample, i
nwhichsomeacti
vi
ti
esdependonot her
shav
ingbeen
under
takeninor
der,
wher easot
herscanbedoneindependent
ly.

Act
ivi
ty Pr
ecededby Elapsed t
ime
(minutes)
Awei ghingredients - 1
Bmi xingredients A 3
Cdoughr i
singtime B 60
Dprepar eti
ns - 1
Epre-heatov en - 10
Fknockbackdoughandpl acei
nti
ns C&D 2
nd
G2 doughr i
singti
me F 15
Hcooki ngtime E&G 40

I
nt hi
sexample,
thereisaclearsequenceofev ent
sthathavetohappenintheri
ght
order
.Ifanyoft
heev ent
sont hecrit
icalpathi
sdel ayed,t
henthebreadwil
lnotbeready
assoon.However,t
asksD( preparetins)andE( heattheoven)canbestar
tedatany
ti
measl ongastheyaredonebyt helatestfi
nishtimei nt
hefoll
owingnode.

So,wecanseethatt
heovencouldbeswi t
chedonasearlyasti
me0, butwecanwor k
outthati
tcoul
dbeswit
chedonatanyt i
mebef or
e71–anyl at
erthanthisanditwon’
t
behotenoughwhenthedoughisreadyf orcooki
ng.Ther
eissome‘ f
loat
’avai
labl
efor
tasksDandEasneit
herisonthecri
ticalpath.
Thi
sisafair
lysimpleexample,andwecanseetheLSTandLFTar ethesameineach
node.I
namor ecomplexCPA, t
hiswi
ll
notnecessar
il
ybethecase,andi
fso,wi
ll
i
ndicat
ethatthereissome‘f
loat’i
natl
eastoneacti
vi
tyl
eadi
ngtothenode.However
,
nodesonthecr i
ti
calpat
hwil
l al
wayshavethesameESTandLFT.
Ev
aluat
ion
CPAisaplanni
ngandproj
ectmanagementtool.Whil
sti
tcanhelpensur
eaprojecti
s
complet
edasquickl
yaspossi
ble,andr
esourcesusedaseff
ici
entl
yaspossi
ble,i
tdoes
dependontheaccur
acyoft
heinformat
ionused.

JustdrawingupaCPAwi l
lnoti
nitsel
fensureaproj
ectrunst
oplan;mostpr
oject
s
encountersomedel
ayorsomethingunexpected,
somanagersneedtousetoolsuchas
CPAt omoni t
ort
heproj
ectandtakeswif
tactiontor
ecti
fyanypr
oblems.

Theseday
s,busi
nessesuseasof
twar
epackagesuchasMi
crosof
t©Pr
oject®t
odr
aw
upandmanageaCPA.

Exami
nat
iont
echni
que
Someexami
nati
onboar dsrequi
reA-l
evelcandi
dat
estoconst
ructorcompleteaCPA
dur
ingt
heexaminat
ion.Ify
ouarelucky,y
oumayj usthav
etoint
erpretone!

Manypupil
sfi
ndCPAquit
edi
ffi
cul
tinpr
act
ice,
sothebestwaytohel
py our
selfi
stodo
l
otsofexampl
essothaty
oubecomefamil
i
arwitht
hevari
ousopti
onsthatmightbe
pr
esentedt
oyou.

Remember ,eveni
fyoudogetstuck,ther
earel
ikel
ytobemar kstobehadbyexpl ai
ning
whattheCPAi sfor,byr
elat
ingi
ttothecasest
udy ,
anddescri
binganyli
mitat
ionstoits
usef
ulness.Remember ,
manyprojectscanbebroughtbackontrackbyuseofextra
moneyandl abour.

I
tisbeyondthescopeoft heserevi
sionnot
estoexpl
ainhowt ododrawoneupf r
om
scr
atch–y ouneedplentyofpracti
cebefor
eyourexaminat
ion,soconsul
tyourt
eacher
orusetheexer
cisesi
ny ourtextbook.
 Readt
hef
oll
owi
ngpassageandansweral
lquest
ionst
hatf
oll
ow.

Formanyy ears,il
legalgoldpanner
srav
aget helandofChiefChi
kosicausingi
rr
eparabl
e
damagetot helandscape.Beginni
ngofyear2010hast het
urni
ngpoi
ntast heGover
nment
hasi
nter
vened.Oper at
ioncodenamed“Restor
eOr der
”hasbeenputi
ntoplaceandther
eis
n9omoreil
legalgoldpanning.

TheGovernmenthasdeci
dedt obui l
dl owcosthousing,shopsandready-bui
ltf
act
oryshell
s
onthesit
eoftherehabi
li
tatedland.I thascontact
edlocalfir
mswhomi ghtbeint
erest
edin
doi
ngthiswork. TheGov ernment ’
snobl eideaismeantt oencourageinvest
mentbyt he
emergi
ngindi
genousbusi
nessent repreneurs.

Johnson,t
hesoleownerofJohnsont
heBui l
dingcontr
act
ors,iswonderi
ngwhethert
oappl
y
fort
hecontract
.Oflat
e,hehasbeenconcentr
atingonbuil
dingoneluxur
yhouseatatimei
n
poshsuburbsli
keZi
mraPark.Hehaseightemployeesandasupervi
sor.

Johnsonknowswel lthatt heGov ernmentcontr

actwilli
ncreasecapacit
yut i
li
sat
ionofhis
busi
nessalthoughthepr ofi
tmar gi
nperhousewi llbel
owerthanforluxur
yhouses.Si ncehi
s
busi
nessi ssmal l
,the or ganisat
ionalstr
uctur
ehasbeen si mpl
ewi th Johnson and t
he
superv
isordeal
ingwithpr oblemsast heyri
se.

Winni
ngt
hecont
ractwi
llmeanar api
dexpansi
onofJohnson’sbusi
ness.Asaresul
t,hewi
l
l
havet
oempl
oymor est
aff
,changethefi
rm’
sstruct
ureandr
aisemorecapit
al.

TheGovernmentwantsthejobtobecomplet
edintwentyweeks,t
husJohnsoni sconcer
ned
att
heshorttimeperi
odall
owed.Hav i
ngdoneathor
oughanalysi
softheproject
,hecameup
wit
hthefoll
owingt
ableofesti
matesofdur
ati
onsofeachact
ivi
tyofthecont
ract.

ACTI
VITY PRECEDEDBY DURATION(
WEEKS)
A - 5
B - 4
C B 5
D A,C 6
E D 5
F B 8
G F 4

1. (a) Usi
ngt
hei
nfor
mat
iongi
veni
nthet
abl
e:
 (
i) Drawt henet workdiagram f
orJohnson.( 4)
(
ii
) I
dent i
fythecr i
ti
calpathandthetotalproj
ectdurat
ion.(
2)
(
ii
i) Explai
nt hesignifi
canceofnetworkanalysisf
orJohnson.(4)
(
iv) Discusst heli
kelyobjecti
vesofstakehol
dersinJohnsonbusiness.(7)
(
v) Discusst heproblemst hatJohnsonmi ghtexperi
encefrom expandi
ngthe
business.( 7)
2. ThefollowinginformationisprovidedforprojectVenus:
ACTI
VITY PRECEDI
NGACTIVI
TY DURATION(
DAYS)
A - 5
B A 6
C A 3
D A 3
È B 2
F D 2
G B,C,F 9
H E 4

(
a) Defi
net
heter
m cr
iti
cal
path. (
2)
(
b) (i
) Dr awanetworkdiagr
am forproj
ectVenus (
3)
(i
i
) St at
etheproj
ect
’stot
aldurati
on (
1)

3.AsmallcontractorprovidesthefollowinginformationaboutprojectX.
Act
ivi
tyAi
sfol
lowedbyB,C
Act
ivi
tyBi
sfol
lowedbyD
Act
ivi
tyCi
sfol
lowedbyE,F
Act
ivi
tyDi
sfol
lowedbyF
Act
ivi
tyEi
sfol
l
owedbyG

A(
5day
s),B(
4day
s), C(
6day
s), D(
3day
s), E(
3day
s), F(
2day
s), G(
2day
s)

(
i) Representt
heinf
ormationonnetwor
kdiagrams (
3)
(
ii
) Ident
if
ythecri
ti
calpathfrom t
hedi
agram y
ouhavedr
awn. (
2)
(
ii
i) Whati
sadummyact i
vit
y? (
2)

4.ACTIVITY ESTI
MATEDDURATI
ON PRECEDEDBY
A 1 -
B 4 -
C 5 A
D 6 A,C
 E 3 B
F 2 E
G 1 D,F

(
a) Drawanetwor
kdiagram f
ort
heseact
ivi
ti
es. (
3)
(
b) I
denti
fyt
hecri
ti
calpath

5.Inmanufacturingacertainproduct,thefollowingactivitiesmustbecompleted.
B,CandDfol
lowA
Act
ivi
tyEf
oll
owsC
Act
ivi
tyFf
oll
owsD
Act
ivi
tyGf
oll
owsB,EandF

Ti
mesf
oreachact
ivi
ty

A=6day
s B=8day
s C=12day
s D=9day
s E=2day
s F=4day
s G=4day
s

Dr
awanet
wor
kdi
agr
am f
ort
heseact
ivi
ti
es.

6.Foraprojecttobecompleted,thefollowingactivitiesshouldbeundertakeninthe
order
shown:

B,Cfol
lowA
E,Ff
oll
owsB
Dfol
lowsC
Gfol
lowsE
Hfol
lowsF
If
oll
owsGandD

Thepr
ojecti
scompl
etedwhenHandIar
efi
nished.

(
a) Drawacor
rect
lyl
abel
l
ednetwor
kdiagram.
(
b) Usi
ngt
heacti
vi
tyt
imesbel
ow,st
atethecri
ti
cal
pat
h.

A=4day
s B=5day
s C=6day
s D=2day
s E=7day
s F=9day
s G=2day
s

H=6day
s I
=3day
s
7.ACTIVITY ORDER TI
ME(
HOURS)
A - 1
B hast
ofol
l
owA 2
C hast
ofol
l
owA 1
D hast
ofol
l
owB 3
E hast
ofol
l
owC 1
F hast
ofol
l
owE 1
G hast
ofol
l
owDandF 2

(
a) Drawanetworkdiagr
am fort
heabov
epr
oject
(
b) Calcul
atet
hecri
ti
calpat
h

8.ACTIVITY PRECEDEDBY DURATION

A - 6
B A 2
C A 8
D A 9
E B 3
F C,
E 8
G D,
F 2

(
a) Drawacorr
ect
lylabel
l
ednet
wor
kdi
agr
am
(
b) I
denti
fyt
hecri
ti
calpath

9.ACTIVITY PRECEDEDBY DURATION

A - 1
B - 4
C A 5
 D A,
C 6
E B 3
F E 2
G D,
F 1

10.
ACTI
VITY PRECEDEDBY DURATION
A - 8
B - 6
C A 12
D B,
C 6
E A 14
F E 10
G D,
F, 3
H B,
C 14
I G,
H 3
J I 4

11.
ACTI
VITY PRECEDEDBY DURATION
A - 14
B A 12
C A 10
D A 8
E - 6
F E 4
G B 2
H D 13
I F 11
J C,G,
H,I 9

12.
ACTI
VITY PRECEDEDBY DURATION
A - 4
B - 4
C B 5
D A,
C 3
E B 10
F B 9
G E 6
H E 7
 I D,
G 3
J F,
H 5

13.
ACTI
VITY PRECEDEDBY DURATION
A - 15
B A 30
C A 10
D B,
C 30
E B.C 15
F D,
E 12
G D,
E 8
H G 6

14.
ACTI
VITY PRECEDEDBY DURATION
A - 3
B - 2
C - 8
D A,
B 3
E D 5
F E 2
G E 4
H E 3
I F,
G,H 1
Thepar
tnershipi
sconsi
deri
ngmanufact
uri
ngtheproductt
hati
timport
sforsal
e.
Prel
i
minarystudi
eshaverev
eal
edthefol
lowi
ngunitcostsf
orpr
oduct:
$
Dir
ectmat eri
als 30
Dir
ectlabour 45
Vari
ableproductionov
erheads 25
Dir
ectselli
ngexpenses 20
Totalvar
iablecosts 120
Sel
lingpri
ce 168

Ot
hercost
sperannum woul
dbeasf
oll
ows:
$
Depreci
ati
on 100000
Rentandrates 68000
I
nsurance 120000
Total 288000

(
a) Cal
cul
atet
hebr
eak-ev
enpoi
nti
n

(
i) Uni
ts[
4]

(
ii
) Sal
esr
evenue [
2]

(
b) Ift
hefi
rm deci
destost
artbymakingandsel
l
ing13000uni
tsperannum,
cal
cul
ateatthi
slev
elofacti
vi
ty,

(
i) Pr
ofi
t(2)

(
ii
) Mar
ginofsaf
etyasaper
cent
age,
(4)

(
ii
i) Thesel
l
ingpr
iceneededt
oachi
eveapr
ofi
tof$1402000.(
4)

(
iv) Theper
cent
agechangei
nsel
l
ingpr
icet
oachi
evet
her
esul
tident
if
iedi
n
(
ii
i) above.(
2)

(
c) Stat
efiveassumpt
ionsunder
lyi
ngcost
-vol
ume-
prof
it(
break-
even)
anal
ysi
s. (5)
 DATARESPONSE

Readt
hepassagebel
owandanswert
hequest
ionst
hatf
oll
ow.

Bl
ueCol
larCl
othi
ngCompany

Bluecoll
ar,
acompanyf or
medfiv
eyearsago,
isinthebusinessofmanufacturi
ngclot
hesand
cl
othingmat eri
als. Thecompany’
scustomersaremai nlyclot
hingretai
loutlet
sandot her
manuf act
urers.Ofl at
ethecompanyhasbeendoi ngwel lbutbecauseofintensepressure
fr
om compet iti
on,managementhasdeci
dedtoexpandthecompany ’soperat
ions.

Managementhas two opt

ions whi
ch to sel
ectthe course ofact
ion t
of ol
lowi
ng thei
r
pur
suanceofgr
owth.Inaddit
iontomoni
tori
ngtheeverchangingbusi
nessenv
ironment
,they
wil
lhav
etodeci
deonthemostef f
ecti
veandprofi
tabl
eoption.

Thef
ir
stopt
ioni
stodi
ver
sif
yint
othepr
oduct
ionofqual
i
tyf
oot
wear
.

Thecompanymayhav et
obuyorleasebui
ldi
ngsandmachiner
yfort
henew v
entur
e.The
Operation Manager has pr
ovi
ded the Managi
ng Di
rect
or the f
oll
owi
ng fi
gur
es f
or
considerat
ion.

Fi
xedcost s $753750permonth
Rawmat eri
alsperpai
r $2300
Dir
ectlabourperpai
r $1800
Producti
onatfull
capaci
ty 603pai
rspermont
h
Sell
ingpri
ce $6350perpai
r

Thesecondopt
ioni
stomergewit
haclothi
ngretai
lchai
nthathasa40%mar
ketshar
eandi
s
regar
dedasoneoft
hebi
ggestcl
othi
ngcompaniesinthecount
ry.

1. (
a) Expl
aint
hemeani
ngoft
hef
oll
owi
ngt
ermsast
heyar
eusedi
nthepassage:

(
i) di
ver
sif
y (
li
ne8)
.
(
3)
(
ii
) Mar
ketshar
e(l
i
ne16)
(
3)
(
b) I
nnJune2003,
thecompanydeci
dedt
opr
oducef
oot
wearatf
ull
capaci
ty.

Cal
cul
ate:
 (
i) Thecont
ri
but
ionperpai
r (
2)

(
ii
) Thebr
eak-
evenpoi
nt,
fort
hemont
h,i
nuni
ts,
(
2)

(
ii
i) Themar
ginofsaf
ety
,
(
2)

(
iv) Thenetpr
ofi
tforJune2003.
(
3)