Project Time

Management

ZAFAR
ContinuousKAMAL
Improvement
Project and Project Management
 Project – temporary endeavor undertaken to create a
unique product or service
 Has a definite beginning and end and interrelated
activities
 Programs adopt new set of objectives and continue to
work; projects cease when declared objectives have
been attained
Project and Project Management
 Projects are unique – characteristics are progressively
elaborated
– Progressively: proceeding in steps
– Elaborated: worked with care and detail
 Scope of project should remain constant even as
characteristics are “progressively elaborated”
Project and Project Management
 Project Management: the application of knowledge, skills,
tools and techniques to project activities in order to meet or
exceed stakeholder needs and expectations from a defined
project – balancing the following:
– Scope, time, cost, and quality
– Stakeholders’ expectations
– Requirements (needs) vs. unidentified requirements
(expectations)
 Project and Project Management
 Programs are groups of projects managed in a
coordinated way to obtain benefits not available from
managing the projects individually
 Most programs have elements of ongoing operations
– Series of repetitive or cyclical undertakings
 Projects are often divided into “subprojects” for more
manageability
– Often contracted out to external organizations
 Project Time Management

 General Comments:
– Projects can have more than 1 critical path (increases risk) and can
involve dummy tasks
– Negative float indicates that you are behind
– Resource Leveling involves possibly letting schedule and cost slip
– Heuristics – just means “rule of thumb” e.g. 80/20 rule
– Schedules are calendar based – makes this different than a time
estimate
• Bar Chart a.k.a. Gantt chart (track progress, report to entire
team including stakeholders, control tool)
• Network Diagram (to show task inter-dependencies, show
project organization, basis for project control)
• Milestone chart (report to Senior management, shows major
events)
 Project Time Management
 General Comments:
– To shorten project schedule examine the critical path
• Crashing – add more resources to the critical
path tasks
– Usually results in increased cost
• Fast Tracking – performing tasks in parallel
– Can result in re-work and increased risk
– Best to select method that has least impact on the
project (is the importance on cost, risk or schedule?)
 Project Time Management
 General Comments:
– Bar (Gantt) Charts
• Weak Planning Tool, effective progress and reporting tool
• Does not show interdependencies of tasks
• Does not help organize the project more effectively
– Network Diagrams (PERT, CPM, PDM)
• Shows task interdependencies
• Aids in effectively planning and organizing work
• Provides a basis for project control
– Milestone Charts
• Only shows major events
• Good for reporting to management and customer
– Flow Charts
• Depicts workflow and not commonly used for project management
 Project Time Management
 General Comments:
– Free Slack (Float) – amount of time a task can be delayed
without delaying the early start date of its successor
– Total Slack (Float) – amount of time a task can be delayed
without delaying the project completion date

 Lag – inserted waiting time between tasks

 Resource Leveling – level peaks of resource usage; stable
number of resources – allows schedule and cost slip in favor of
leveling resources
 What is Project Time
Management?
 Processes required to ensure timely completion of
the project.
 Major time management processes include:
– Activity definition.
– Activity sequencing.
– Activity resource estimating
– Activity duration estimating.
– Schedule development.
– Schedule control.
<Please refer to figure 6-1, PMBOK Third Edition
page 125. This provides a summary of the
processes in project time management>.
10
www.pmstudy.com
 Decomposition

 Involves subdividing the project work packages

into smaller, more manageable components to
provide better management control.
 Differs from decomposition in scope definition
because final outputs here are described as
activities rather than deliverables.
 WBS is the basis for developing the final activity
list. (I.E. WBS is developed first followed by the
activity list).

11
www.pmstudy.com
 Types of Dependencies
 Mandatory dependencies:
– Inherent in the nature of the work.
– Usually involve physical limitations.
– e.g. You cannot build the ceiling until walls of a house are
completed.
 Discretionary dependencies:
– Defined by the project management team.
– Should be used with care and well documented since they
may limit later scheduling options.
– e.g. Best practices.
 External dependencies:
– Involve a relationship between project activities and non-
project activities (i.e. Activities out of scope for the project).
– e.g. Dependency on the economy, environmental factors
etc.

12
www.pmstudy.com
 Precedence Diagramming
Methods (PDM)
 Uses nodes to represent the activities and connects
them with arrows that show dependencies.
 Includes four types of dependencies namely:
– Finish to start (most commonly used).
– Finish to finish.
– Start to start.
– Start to finish.
 Dummy activities not used.
 Does not allow loops or conditional branches.

13
www.pmstudy.com
Arrow Diagramming Methods (ADM)
Method of constructing a project network
diagram that uses arrows to represent the
activities and connects them at nodes to
show their dependencies.
Uses only finish-to-start dependencies.
Dummy activities may be used.
Does not allow loops or conditional
branches.

14
www.pmstudy.com
 Network Templates
Standardized networks used to expedite
preparation of project network diagrams.
Portions of a network are called subnets
or fragnets:
– Useful when project includes several
identical or close to identical features.

15
www.pmstudy.com
 Activity Duration Estimating
Process of taking information on project
scope and resources and then developing
durations for input to schedules.
Progressively elaborated.
Requires consideration of elapsed time.

16
www.pmstudy.com
 Historical Information
Available from:
– Project files : records of previous project
results that are detailed enough to aid in
duration estimates
– Commercial duration estimating databases
: this is available for standard tasks
– Project team knowledge : individual
members of the project team may
remember previous actual or estimates

17
www.pmstudy.com
 Analogous Estimating (top-down
Estimating)
Uses the actual duration of a previous,
similar activity as the basis for estimating
the duration of a future activity.
Is a form of expert judgment.
Most reliable when:
– Previous activities are similar in fact
and not just in appearance.
– Individuals preparing the estimates
have the needed experience.
18
www.pmstudy.com
 Quantitatively based durations
Quantities to be performed for each
specific work category is taken
It is then determined how many times the
work category is going to be performed in
the given activity
Time duration for the activity = number of
occurrences X duration of one activity

19
www.pmstudy.com
 Constraints
 Factors that will limit a management team’s options.
 Two types of constraints are:
– Imposed dates:
• Used to restrict the start or finish dates for the tasks.
• Most commonly used constraints are “start no
earlier than” and “finish no later than.”
• e.g. Market window on a technology project,
weather restrictions on outdoor activities,
government mandated compliance etc.
– Key events or major milestones:
• Completion of certain deliverables by specified
dates as requested by project sponsor, customer or
other stakeholders.
• Once scheduled, the milestones may be difficult to
move.
20
www.pmstudy.com
 Mathematical Analysis
Involves calculating theoretical early and late
start and finish dates.
Popular techniques:
– Critical path method (CPM):
• Calculates a single deterministic early and late start and
finish date for each activity based on specified
sequential network logic and activity duration estimates.
– Project evaluation and review technique (PERT):
• Uses a weighted average duration estimate to calculate
activity durations.

21
www.pmstudy.com
 Duration Compression
Special case of mathematical analysis
Looks for ways to shorten the project
schedule without changing project scope
Techniques used:
– Crashing: in which cost and schedule tradeoffs
are analyzed to determine how, if at all, to obtain
the greatest amount of compression for the least
incremental cost
– Fast tracking: doing activities in parallel that
would normally be done in sequence. Often
results in rework and increases risk

22
www.pmstudy.com
 Simulation
Involves calculating multiple project
durations with different sets of activity
assumptions
Common techniques:
– Monte Carlo analysis
– What-if analysis (using logic network to
simulate different scenarios)

23
www.pmstudy.com
 Resource Leveling Heuristics
 Done because mathematical analysis produces a
preliminary early-start schedule that requires more
resources during certain time periods than are available.
 e.g. Rule of thumb – “allocate scarce resources to critical
path activities first.”
 Often results in a project duration that is longer than the
preliminary schedule. (Also called “resource based
method”).
 Resource reallocation: used to bring the schedule back
or as close as possible to the originally intended
duration.
 Reverse resource allocation: if projects have a finite and
critical project resource, requiring that the resource be
scheduled in reverse from the project ending date.
 Critical chain: A technique that modifies the project
schedule to account for limited resources.
24
www.pmstudy.com
 Project Schedule
Includes at least planned start and
expected finish dates for each activity.
Presented graphically using:
– Project network diagrams
– Bar charts and GANTT charts
– Milestone charts

25
www.pmstudy.com
 Schedule Updates
 Any modification to the schedule information used to
manage a project.
 Schedule baseline: this is the approved project schedule
and is a component of the project plan. Provides the basis
for measuring and reporting schedule performance.
 Revisions: special categories of schedule updates
because of scope/estimate changes. The schedule
baseline remains same, but start and end dates for some
activities may change.
 Re-baselining: done if schedule delays are very severe –
used to provide realistic data to measure performance.
(Done in only extreme cases, because all historical data
will be lost for the project schedule).
 New target schedules: if there are small changes to the
project schedule, then the schedule baseline is kept
constant – but new target schedules may be used.
26
www.pmstudy.com
 Project Time Management Planning
 Project time management involves the processes required to
ensure timely completion of a project. The main planning tasks
performed as part of project time management are activity
definition, activity sequencing, activity resource estimating, activity
duration estimation, and schedule development.
Activity Definition:
 The project manager starts with the project charter and then
develops a project scope statement, WBS, WBS dictionary, project
management plan and other related documents.
Creating the Activity List and Attributes:
 The activity list is a tabulation of activities to be included on a
project schedule. The list should include the activity name, an
activity identifier or number, and a brief description of the activity.
 Project Time Management Planning

 The activity attributes provide schedule related information about

each activity, such as predecessors, successors, logical
relationships, resource requirements, constraints, imposed dates,
and assumptions related to the activity.
 The activity list and activity attributes should be in agreement with
WBS and WBS dictionary
 The goal of activity list is to ensure that project team members are
in complete understanding of all activities necessary to complete
the project
 The WBS is often expanded during the activity definition process
as the project team members further define the activities required
for performing the work.
 Project Time Management Planning
 The project team should review the activity list and attributes with
key stakeholders to avoid any mishap or unrealistic schedule
which may delay overall project.
Creating a milestone list:
 A milestone is a significant event on a project. It often take several
activities and a lot of work to complete a milestone, but milestone it
self is like a marker to help in identifying necessary activities
 Milestones are also useful tools for setting schedule goals and
monitoring progress, and project sponsors and senior managers
often focus on major milestones when reviewing projects.
 Project Time Management Planning

Activity Sequencing:
 Activity sequencing involves reviewing the activity list and
attributes, project scope statement, and milestone list to determine
the relationships or dependencies between activities.
 It also involves evaluating the reasons for dependencies and the
different types of dependencies.
A dependency or relationship relates to the sequencing of project
activities or tasks. For example, does a certain activity have to be
finished before another one can start? Can the project team do
several activities in parallel?
 Project Time Management Planning
Three basic types of dependencies:
1. Mandatory dependencies are inherent in the nature of the work
being performed on a project. They are sometime referred to as
Hard Logic because their relationships are unavoidable
2. Discretionary dependencies are defined by the project team.
For example, a project team might follow good practice and not
start detailed design work until key stakeholders sign off on all of
the analysis work. Also known as soft logic
3. External dependencies involve relationships between project
and non project activities. The installation of new software might
depend on delivery of new hardware from an external supplier.
Project Time Management Planning
NETWORK DIAGRAMS:
 Network diagrams are the preferred technique to show activity
sequencing.
 A network diagram is a schematic display of the logical
relationships among, or sequencing of, project activities
 The format of network diagram uses the activity-on-arrow (AOA)
approach, or the arrow diagramming method (ADM)
 AOA network diagrams are generally easy to understand and
create a different method is more commonly used: the precedence
diagramming method. The precedence diagramming method
(PDM) is a network diagramming technique in which boxes
represent activities.
 Project Time Management Planning
Four types of dependencies:
In a project network, a dependency is a link amongst a project's
terminal elements.
1. Finish-to-start: a relationship in which the “from” activity must finish
before the “to” activity can start. For example you cannot provide
training until after the training materials are available. Finish-to-start is
the most common type of relationship, or dependency, and AOA
network diagrams use only finish-to-start dependencies.
Task B cannot start until task A finishes, also known as (FS)
(Foundations dug) FS (Concrete poured)
A

B
 Finish – Start - Relationship

 I have two activities to complete in my project, which is

to construct a wedding cake.
 The activities are to make the cake and put on the
frosting. The finish start relationship says that I cannot
start putting the frosting on the cake until I have baked
the cake layers.
 Notice that I could, logically, put the frosting on any time
after that. The relationship constricts the start of the
activity of frosting the cake to be no sooner than the
finish of baking the cake.
 Project Time Management
2 Start-to -start: A relationship in which the “from” activity cannot
start until the “to” activity is started. For example, as soon as you
start a project review meeting, you can start documenting
attendees, serving refreshments, taking minutes, and so on.

Task B cannot start until task A starts, also known as SS

(Project work started) SS (Project management activities
started)

B
 Start – Start Relationship

 For example, using the above example of constructing a

wedding cake, I do not want to apply the frosting to the cake
until the master chef is on scene. The two activities then are:
1. apply frosting to cake
2. Master chef supervises cake construction
The start-start relationship says that I cannot start putting the
frosting on the cake until I have the master chef present. Notice
that I could, logically, put the frosting on any time after that. The
relationship constricts the start of the activity of frosting the cake
to be no sooner than the beginning of the master chef
supervising the cake construction.
 Project Time Management
3 Finish-to finish: a relationship in which the “from” activity must be
finished before the “to” activity can be finished. One task cannot
be finished until another finishes. For example, quality control
efforts cannot finish before production finishes, although both
activities can be performed at the same time.

Task B cannot finish until task A finishes, also known as FF

(Last chapter written) FF (Entire book
written)

B
 Finish-Finish Relationship

 For example, using the example of applying the frosting to the

wedding cake, I must have the master chef there until the
frosting is complete so that he or she can approve it. The master
chef is then restricted from finishing the supervising activity until
the frosting activity is finished. The two activities are:
1. Apply frosting to cake
2. Master chef supervises cake construction
The finish finish relationship says that the master chef cannot
finish supervising the cake construction until the frosting is
completed. Notice that I could, logically, have the master chef
continue supervising after that. The relationship constricts the
finish of the master chef supervising activity to be no sooner
than the finish of the frosting activity
 Project Time Management
4 Start-to-finish: a relationship in which the “from” activity must start
before the “to” activity can be finished. This type of activity is rarely
used, but it is appropriate in some cases. For example, an
organization might strive to stock raw material just in time for the
manufacturing process to begin. A delay in the start of the
manufacturing should delay completion of stocking the raw
material

Task B cannot finish until task A starts, also known as SF

(New shift started) SF (Previous shift finished)

B
 Start – Finish Relationship
 For an example, using the wedding cake example again, te project is still
to construct a wedding cake, and the activity is to apply the frosting to
the cake. We do not want to finish applying the frosting to the cake until
the master chef is on the scene. The two activities then are:
1. Applying frosting to the cake
2. Master chef supervises cake construction
Remember that the start-start relationship says that I cannot start putting
the frosting on the cake until I have the master chef present. The start
finish relationship says that I cannot start putting on the frosting on the
cake until I have the master chef present. The start finish relationship
says that I can start putting on the of the cake before the master chef is
present, but I am not allowed to finish putting on the frosting until the
master chef has started supervising. The relationship constricts the
finish of the activity of frosting the cake to be no sooner than the
beginning of the master chef supervising the cake construction.
 Activity Resource Estimating

 The estimate of duration for each activity needs good idea of

quantity and type of resources (people, equipment and material)
that will be assigned to each activity.
 Important questions to answer in activity resource estimating
includes:
1. How difficult will it be to do specific activities on the project?
2. Is there any unique in the project’s scope statement that will
affect resources?
3. Does the organization have appropriate people, equipment, and
materials available for performing the work?
4. Does the organization need to acquire more resources for this
project? Would it make sense to outsource some of the work?
 Activity Resource Estimating

 Sample for ARE:

 Project name: Just-in-time Training Project
 WBS item number: 3.1.2
 WBS Name: Administer Survey
 Description: Internal members of our IT department will perform
this task. The individual must be knowledgeable in using online
survey software so that they can enter the actual survey into this
software. They must also know how to run a query to find the e-
mail addresses of employees in purchasing, accounting,
engineering, IT, sales, marketing, manufacturing, and HR
departments.
 Activity Duration Estimating
 After working with key stakeholders to define activities, determine
their dependencies, and estimate their resources, the next process
in project time management is to estimate the duration of the
activities.
 It is important to note that duration includes the actual amount of
time spent working on an activity plus elapsed time.
 The output of activity duration estimating include updates to the
activity attributes, if needed, and duration estimates for each
activity. Duration estimates are provided as a discrete numbers,
such four weeks, as a range, such as three to five weeks; or as
three point estimate.
 Three point estimate is an estimate that includes an optimistic,
most likely and pessimistic estimate.
 Schedule Development
 Schedule development uses the results of all the preceding project
time management processes to determine the start and end dates
of project activities and of the entire project.

 The ultimate goal of the schedule development is to create a

realistic project schedule that provides a basis for monitoring
project progress for the time dimension of the project.

 Project manager must lead their teams in creating realistic

schedules and then following them during project execution.
 PERT Estimations
Term Formula Used
PERT Value (Pessimistic+ 4*(Most Likely) + Optimistic)
(Expected duration) 6
Standard Deviation Pessimistic – Optimistic
(Sigma) 6
Variance (Standard Deviation)2
For more than one Tasks (e.g. for a project where all tasks lie on the critical path)

Term Formula Used

PERT Value Sum of PERT Values of individual
tasks
Standard Deviation Sum of Variances of all the tasks

Variance Sum of variances of all the tasks

www.pmstudy.com
45
Continuous Improvement
         Correct Choice: 2

         Justification: Activity Attributes: Attributes of the activities -

including responsibility (i.e. who will perform the work), geographic area or
building (where the work has to be performed) and activity type (i.e
summary or detailed) - are very important for further selection and sorting
of the planned activities in a convenient way for the users. WBS
classification is also an important attribute that allows useful activity
ordering and sorting.

PMBOK 2000 Page 74

Continuous Improvement
Continuous Improvement
Continuous Improvement
Continuous Improvement
 Project Management
PERT and CPM
PERT: The program evaluation and review technique
along with CPM: Critical Path Method are two popular
quantitative analysis techniques that help managers
plan, schedule, monitor, and control large and complex
projects.
CPM also called critical path analysis is a network
diagramming technique used to predict total project
duration.

Continuous Improvement
 Six Steps of PERT and CPM
1. Define the project and all of its significant activities or tasks
2. Develop the relationships among the activities. Decide which
activities must precede others
3. Draw the network connecting all of the activities
4. Assign time and/or cost estimates to each activity
5. Compute the longest time path through the network; this is
called the critical path
6. Use the network to help plan, schedule, monitor, and control the
project
 PERT Understanding
 Almost any large project can be subdivided into a series of
smaller activities or tasks that can be analyzed with PERT.
When you recognize that projects can have thousands of
specific activities, you see why it is important to be able to
answer such questions as the following:
1. When will the entire project be completed?
2. What are the critical activities or tasks in the project,
that is, the ones that will delay the entire project if
they are late?
3. Which are the non critical activities, that is, the ones
that can run late without delaying the entire project’s
completion?
4. What is the probability that the project will be
completed by a specific date?
 PERT

5. At any particular date, is the project on schedule,

behind schedule , or ahead of project schedule?
6. On any particular date, is the money spent equal to,
less than, or greater than the budgeted amount?
7. Are there enough resources available to finish the
project on time?
8. If the project is to be finished in a shorter amount of
time, what is the best way to accomplish this at the
least cost?
General foundry example of PERT
 General foundry, a metal works plant in Milwaukee,
has been trying to avoid the expense of installing air
pollution control equipment. The local environmental
protection group has recently given the foundry 16
weeks to install a complex air filter system on its main
smokestack.
 All the activities seem rather confusing and complex
until they are placed in a network.
 Activities and Immediate predecessors for General
foundry listed down for further action
 Total eight number of activities were found
 ACTIVITY/PREDECESSORS Table

Activity Description Immediate

Predecessors
A Build Internal Components -
B Modify Roof and Floor -
C Construct Collection Stack A
D Pour concrete and install frame B
E Build high – temperature burner C
F Install control system C
G Install air pollution device D, E
H Inspect and Test F, G
 Drawing the PERT Network
 Once the activities have all been specified and
management has decided which activities must
precede others, the network can be drawn.
 There are two common techniques for drawing PERT
networks. The first is called activity-on-node (AON) and
the second one is called activity-on-arc (AOA).
 In constructing an AON network, there should be one
node representing start of the project and one node
representing the finish of the project.
Network for General foundry,Inc.
 Activity Times

 The next step in the PERT procedure is to assign estimates of the

time required to complete each activity.
 This is usually given in units of weeks.
 Activity time estimates is not always an easy task, therefore it
needs historical data. Experts opinion etc.
 Due to uncertainty in activity times, the developers of PERT
employed a probability distribution based on three time times
estimates for each activity
 PERT often assumes that time estimates follow the beta probability
distribution. It has been found to be appropriate for determining an
expected value and variance for activity completion times.
 Activity Times

 Optimistic time (a) = time an activity will take if everything goes as

well as possible. There should be only a small probability (say,
1/100) of this occurring.
 Pessimistic time (b) = time an activity would take assuming very
unfavorable condition. There should also be only a small
probability that the activity will really take this long.
 Most likely time (m) = most realistic time estimate to complete the
activity
 t = a + 4m + b/6
 Time Estimates
Activity Optimistic Most probabl Pessimistic Expected tim Variance
(a) (m) (b) (t) (b-a)/6^2
A 1 2 3 2 4/36

B 2 3 4 3 4/36

C 1 2 3 2 4/36

D 2 4 6 4 16/36

E 1 4 7 4 36/36

F 1 2 9 3 64/36

G 3 4 11 5 64/36

H 1 2 3 2 4/36
 How to find the Critical Path
 The critical path is the longest time path route through the
network.
 Any delay of an activity on the critical path will delay completion
of the entire project
1. Earliest start time (ES); an activity can begin without violation of
immediate predecessor requirement
2. Earliest finish time (EF); an activity can end
3. Latest start time (LS); an activity can begin without delaying the
entire project
4. Latest finish time (LF); an activity can end without delaying the
entire project
 Box understanding

 This box comprises of activity, duration (t) and times

already explained

Activity t

ES EF

LS LF
 Calculation

 Earliest Time: EF = ES + t
 Earliest start = largest of earliest finish times of
immediate predecessors

A t=2
ES=0 EF=0+2=2

Start

B t=3
ES=0 EF=0+3=3
General Foundry’s Network with expected Activity Times
General Foundry’s Earliest Start (ES) and Earliest Finish (EF) Times
 Latest Times

 The next step in finding the critical path is to compute

the latest start time (LS) and the latest finish time (LF)
for each activity. This calculation is called as backward
pass.
 Latest start time= latest finish time-activity time
 LS = LF – t
 Latest finish time= smallest of latest start times for
activities
 Slack in Critical Path
 When ES, LS, EF, and LF have been determined, it is a simple
matter to find the amount of slack time, or free time, that each
activity has. Slack is the length of time an activity can be delayed
without delaying the whole project.
 Slack = LS – ES or slack = LF – EF
 Critical activities have no slack time

 In project management, float or slack is the amount of time that a

task in a project network can be delayed without causing a delay to
subsequent tasks (free float)
 project completion date (total float)
 An activity that has a total float equal to zero is said to be a 'critical
activity', which means that a delay in the finish time of this activity
will cause the entire project to be delayed by the same amount of
time. A critical activity typically has free float equal to zero, but an
activity that has zero free float may not be on the critical path.
 Slack or Floats
 Consider the process of replacing a broken pane of glass
in the window of your home. There are various component
activities involved in the project as a whole; obtaining the
glass and putty, installing the new glass, choosing the
paint, obtaining a tin of paint, painting the new putty once
it has set, wiping the new glass free of finger smears etc.
 Some of these activities can run concurrently e.g.
obtaining the glass, obtaining the putty, choosing the paint
etc., while others are consecutive e.g. the paint cannot be
bought until it has been chosen, the new putty cannot be
painted until the window is installed and the new putty has
set. Delaying the acquisition of the glass is likely to delay
the entire project - this activity will be on the critical path
and have no float, of any sort, attached to it and hence it
is a 'critical activity'.
 Slack or Floats

 A relatively short delay in the purchase of the paint may

not automatically hold up the entire project as there is
still some waiting time for the new putty to dry before it
can be painted anyway - there will be some 'free float'
attached to the activity of purchasing the paint and
hence it is not a critical activity.
 However a delay in choosing the paint in turn inevitably
delays buying the paint which, although it may not
subsequently mean any delay to the entire project,
does mean that choosing the paint has no 'free float'
attached to it - despite having no free float of its own
the choosing of the paint is involved with a path through
the network which does have 'total float'.
General foundry’s Latest Start (LS) and Latest Finish (LF) Times
 Schedule and Slack times
activity ES EF LS LF Slack On Critical
Path
A 0 2 0 2 0 Yes

B 0 3 1 4 1 No

C 2 4 2 4 0 Yes

D 3 7 4 8 1 No

E 4 8 4 8 0 Yes

F 4 7 10 13 6 No

G 8 13 8 13 0 Yes

H 13 15 13 15 0 Yes
General Foundry’s Critical Path (A-C-E-G-H)
 Probability of Project Completion
 The critical path analysis helped us determine that
foundry’s expected project completion time is 15 weeks.
If the project is not completed in 16 weeks, General
foundry will be forced to close by environment
controllers (legal requirement). On the basis of this
requirement any variation in critical path may affect the
completion of project on time.
 PERT uses the variance of critical path activities to help
determine the variance of the overall project. If the
activity times are statistically independent, the project
variance is computed by summing the variances of the
critical activities
 Project Completion Probability

 Project variance = ∑ variances of activities on critical

path
 Project variance= 4/36+4/36+36/36+64/36+4/36=3.111
 Project standard deviation = σ = √project variance
 Project standard deviation = √3.111 = 1.76 weeks
 How can this information be used to help answer
questions regarding the probability of finishing the
project on time?
 Assume that the total project completion time follows a
normal probability distribution.
Standard Deviation=1.76 Weeks

15 Weeks

(Expected Completion Time)

 Project Completion Probability

 To find the probability that this project will be finished on or before the 16
week deadline, we need to determine the appropriate area under the
normal curve.
 Z = due date – expected date of completion/σ
 Z = 16 weeks – 15weeks/1.76 weeks
 Z = 0.57
 Where Z is the number of standard deviations the due date or target date
lies from the mean or expected date.
 From normal table we can find the value of Z
 Value of Z is 0.71566, there is a 71.6% chance that the pollution control
equipment can be put in place in 16 weeks or less.
 Probability of Meeting 16-Weeks Deadline

Expected Time is 15 Weeks .57 Standard Deviation

Probability
(T≤ 16 Weeks)
is 71.6%

15 16

Weeks Weeks
 What PERT was able to Provide

1. The project’s expected completion date is 15 weeks

2. There is a 71.6% chance that the equipment will be in place
within 16-week deadline.
3. Five activities (A, C, E, G, H) are on the critical path. Any delay
on this path will delay entire project
4. Three activities (B, D, F) are not critical but have some slack
time built in. this means that resources can be borrowed without
disturbing entire project completion time.
5. A detailed schedule of activity starting and ending dates has
been made available.
 PERT/COST

PERT is an excellent method of monitoring and controlling

project length, it does not consider another very important
factor, project cost. PERT/COST is a modification of PERT
that allows a manager to plan, schedule, monitor, and
control cost as well as time.
Budgeting process of a project
Four steps of the budgeting process:
1. Identify all costs associated with each of the activities.
Then add these costs together to get one estimated cost or
budget for each activity
2. If you are dealing with large project, several activities can
be combined into larger work packages. A work package is
simply a logical collection of activities

Continuous Improvement
 Project Cost Monitoring

3 Covert the budgeted cost per activity into a cost per time period. To do this, we
assume that the cost of completing any activity is spent at a uniform rate over
time. Thus, if the budgeted cost for a given activity is $48,000 and the activity’s
expected time is four weeks, the budgeted cost per week is $12,000 (=$48000/4
weeks)

4 Using the earliest and latest start times, find out how much money should be
spent during each week or month to finish the project by the date desired.
 Budget for General Foundry

 Gantt Chart for General Foundry

G
1 2 3 4 5 6 7 8 9 10 11 12 13
H 14
 Budget for General Foundry

Activity Earliest Start Latest start Expected Time, t Total Budgeted cost Budgeted cost per
Time ES Time LS week ($)

A 0 0 2 22000 11000

B 0 1 3 30000 10000

C 2 2 2 26000 13000

D 3 4 4 48000 12000

E 4 4 4 56000 14000

F 4 10 3 30000 10000

G 8 8 5 80000 16000

H 13 13 2 16000 8000
 Budget for General Foundry

 The weekly budget for the project is developed from the previous data. The earliest
start time for activity A, for example is 0. Because A takes 2 weeks to complete, is
weekly budget of $11,000 should be spent in weeks 1 and 2. Similar calculation is
valid for all activities as per Gantt chart and earliest start time.

 The weekly budgeted cost as per activities duration is very simple to perform.
 Budgeted Cost

 Budgeted Cost ES

activ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total
ity

A 11 11 22

B 10 10 10 30

C 13 13 26

D 12 12 12 12 48

E 14 14 14 14 56

F 10 10 10 30

G 16 16 16 16 16 80

H 8 8 16

total 308

total/ 21 21 23 25 36 36 36 14 16 16 16 16 16 8 8
wk

total 21 42 65 90 126 162 198 212 228 244 260 276 292 300 308
 Budgeted Cost

 Budgeted Cost LS

activ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total
ity

A 11 11 22

B 10 10 10 30

C 13 13 26

D 12 12 12 12 48

E 14 14 14 14 56

F 10 10 10 30

G 16 16 16 16 16 80

H 8 8 16

total 308

total/ 11 21 23 23 26 26 26 26 16 16 26 26 26 8 8
wk

total 11 32 55 78 104 130 156 182 198 214 240 266 292 300 30
8
 Monitoring and Controlling Project Costs

 The purpose of monitoring and controlling projects costs is to ensure that the project
is progressing on schedule and that cost overruns are kept to a minimum. The
status of entire project should be checked periodically.
 Having same project with additional information after starting the project and
standing in sixth week of the 15-week project. Activities A, B, and C have been
finished. These activities incurred costs of $20,000, $36,000 and $26,000
respectively. Activity D is only 10% completed and so far the cost expended has
been $6000. Activity E is 20% completed with an incurred cost of $20,000, and
activity F is 20% completed with an incurred cost of $4,000. activities G and H have
not been started. Check for Overrun?
 Monitoring and Controlling Project Costs

 Monitoring and controlling project costs:

Activity Total budgeted cost Percent of completion Value of work Actual Cost ($) Activity Difference
($) completed ($) ($)

A 22,000 100 22,000 20,000 -2,000

B 30,000 100 30,000 36,000 6,000

C 26,000 100 26,000 26,000 0

D 48,000 10 4,800 6,000 1200

E 56,000 20 11,200 20,000 8800

F 30,000 20 6,000 4,000 -2,000

G 80,000 0 0 0 0

H 16,000 0 0 0 0

Total 100,000 112,000 12,000 overrun