Project Management-

Part- one
Concepts of Project Management
 Introduction-Definition

 “A Project is a non-routine, non-repetitive complex

economic activity that requires:
 investments or commitments of scarce resources

 to provide facilities, goods, services, etc.

 whose benefits would exceed the committed

investments or resources.”
 “A project is a unique process consisting of:
 a set of co-ordinated and controlled activities with start and finish dates,

 undertaken to achieve an objective conforming to specific requirements

including the constraints of time, cost and resources.”

The International Organisation for Standards (ISO)

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 A project is a set of activities that are related to one another;
and all the activities must be completed in order to complete the
project.
 resources (human and non human ) are the two basic resources
required for the completion of a project.
 Thus a project management is a specialized management technique
to plan and control the available resources under a strong
responsibility for the successful completion of the project.
 Project is a temporary endeavor undertaken to create a unique
product, service or result.
 Non-project work is known as operations. Operations involve the
ongoing creation of the goods or services of an organization.
 Within organizations, projects are initiated in order to create
something new or to implement change.
 When project are completed, the finished products or services
are transferred to operations of the company.
 project Characteristics
• Non-routine/ non-repetitive - one time operational activity and
many related activities
• Requires investment (allocation of scarce resources)
• It has a sense of uniqueness, and requires a unique project
organization and has unique project outcomes( vary in scope,
duration and complexity)
• General purpose equipment is used
• High labor skills required.
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Objectives of project
 A project should be completed with in minimum of
elapsed time.
 It should use available manpower and other resources
as carefully as possible, with out delay.
 It should be completed, with minimum capital
investment, with out delay.

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 project management functions
1. Planning is the formulation of a course of action to guide
a project to completion.
 It starts at the beginning of a project, with the scope of
work, and continues throughout the life of a project.
 The establishment of milestones and consideration of
possible constraints are major parts of planning.
 Successful project planning is best accomplished by the
participation of all parties involved in a project. There
must be an explicit operational plan to guide the entire
project throughout its life.
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 2. Organizing is the arrangement of resources in a
systematic manner to fit the project plan.
 A project must be organized around the work to be
performed.
 There must be a breakdown of the work to be performed
into manageable units, which can be defined and measured.
 The work breakdown structure of a project is a multi-level
system that consists of tasks, subtasks, and work packages.

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3. Staffing is the selection of individuals who have the expertise to
produce the work.

 The persons that are assigned to the project team influence every part
of a project.

 People provide the knowledge to design, coordinate, and construct the

project.

 The numerous problems that arise throughout the life of a project are
solved by people.

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4. Directing is the guidance of the work required to complete a
project.
 The people on the project staff that provide diverse technical
expertise must be developed into an effective team.
 Although each person provides work in his or her area of
expertise, the work that is provided by each must be
collectively directed in a common effort and in a common
direction.

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5. Controlling is the establishment of a system to
measure, report, and forecast deviations in the project
scope, budget, and schedule.
 The purpose of project control is to determine and
predict deviations in a project so corrective actions can
be taken.

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Types of Projects: 1. Construction project

Project management, 2010/11

Manufacturing project Research Project
Agricultural project
Project management
 Project management is planning, organizing, and tracking a
project’s tasks to accomplish the project objectives.
 Managing projects is a matter of keeping scope, schedule,
and resources in balance.
 Scope is the range of tasks required to accomplish project
goals.
 A schedule indicates the time and sequence of each task, as
well as the total project duration.
 Resources are the people and/or equipment that perform or
facilitate project tasks.
 Project management
 The use of project management promotes an orderly
progression from the start to the end of the project.
 PM involves the use of various processes and documents to
effectively plan and execute the project.
 The project management Institute(2013) defines project
management as “the application of skills, tools, and techniques
to project activities to meet the project requirements.”
Project management
 Project management involves project planning and project
monitoring and includes such items as:
 Project planning: definition of work requirements,
definition of quantity and quality of work, and definition
of resources needed.
 Project monitoring: tracking progress, comparing actual
outcome to predicted outcome, analyzing impact, and
making adjustments.
 Project management
 Successful project management can then be defined as having achieved the
project objectives:
 within the allocated time period,
 Within the budgeted cost,
 at the desired performance/technology level,
 while utilizing the assigned resources effectively and efficiently.
 Accepted by the customer/ meets predetermined targets set by the client.
 With minimum or mutually agreed upon scope changes
 Without disturbing the main workflow of the organization
 Without changing the corporate culture.
 Project management
 The potential benefits from project management are:
 Identification of functional responsibilities to ensure that
all activities are accounted for.
 Minimizing the need for continuous reporting
 Identification of time limits for scheduling
 Measurement of accomplishment against plans
 Improved estimating capability for future planning
 Project management
 Unfortunately, the benefits cannot be achieved without
overcoming obstacles such as:
 Project complexity
 Customer’s special requirements and scope changes
 Organizational restructuring
 Project risks
 Change in technology
 Forward planning and pricing
 Why Projects?
Projects play vital roles as Policy Instruments or
strategic moves in favor of setting:-
 Technological innovation

 Broadening the physical resource/further expansion

 Institutional/capacity building

Improved post-harvest handling and distribution, etc.

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Project Management…contd

 Complex project needs coordination of:

• Multiple people
• Multiple resources (labs, equipment, etc.)
• Multiple tasks – some must precede others
• Multiple decision points – approvals
• Phased expenditure of funds
 Skill Requirements for Effective Project
Management
 Conflict Resolution

 Creativity and Flexibility

 Ability to Adjust to Change

 Good Planning

 Negotiation

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 Project Management-Project Stakeholders
 Stakeholders are the people or organizations that can be favorably or
unfavorably impacted by project activities.
 As such, project managers must interface with these stakeholders,
and many of the stakeholders can influence on project.
 Stakeholders are:
o Organizational stakeholders: (Executive officers, line managers,
employees)
o Product/market stakeholders: (Customers, suppliers, government,
general public
o Capital market stakeholders: (Shareholders, creditors and banks)
9 Core and facilitating functions for Project Management
3. Managing Project Time: Time management refers to project
planning, scheduling and controlling in order to achieve the
established objectives of the project.

4. Managing Human Resource: It refers to the administration

and management of people involved in a project. Highly
qualified people have to be recruited and then proper
motivation and compensation should be given to them.
5. Managing Communication: It refers to the establishment of a
system by which the information should flow smoothly through all
members of the project.
6. Managing the Quality: It is important to establish quality
standards for the project and then necessary steps should be
taken to ensure that objectives are achieved.
7. Managing Contract and Procurement: It includes selecting,
negotiating and awarding orders and administrating procurement of
material
8.Managing Risk: It refers to dealing with the degree of uncertainty
of the project through knowledge and experience with the
conditions.

9. Managing Project Integration: It ensures that the various

functions and activities going on in a project should be integrated
toward the same objectives. Project integration is very important to
achieve the objectives; therefore, it requires special managerial and
project management skills to integrate several functions of the
project
 The Triple Constraint
of Project Management –Goals
 Successful project
management means:-
 meeting all three goals
(scope, time, and cost) –
and
 satisfying the project’s
sponsor! With quality
 Project Planning
 The Project Planning provides an overall framework for
managing Project Costs and schedules.
 Project Planning involves defining clear, discrete
“Activities” or “Tasks” and the work needed to
complete each Activity.
In Project planning:
Definition of work requirements
Definition of quantity and quality of work
Definition of resources needed for work.
 Project Scheduling
 Project Scheduling is the allocation of resources.
 Project scheduling is a mechanism to communicate what tasks need to get
done and which organizational resources will be allocated to complete
those tasks in what timeframe.
 A project schedule is a document collecting all the work needed to deliver
the project on time.
 Project Controlling
 Project control is the formal mechanism established:-
 Comparing actual outcome to predicted outcome
 check deviations from the basic plan/ Tracking progress /,
 to determine the precise effect of these deviations on the
plan/Analyzing impact/, and
 to re-plan and reschedule for compensating the
deviation/Making adjustments/.
Successful project management can achieve the
project objectives:
 Within time

 Within cost

 At the desired performance/technology level

 While utilizing the assigned resources effectively and efficiently

 Accepted by the customer

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The potential benefits from project management are:

 Minimizing the need for continuous reporting

 Identification of time limits for scheduling
 Measurement of accomplishment against plans
 Early identification of problems so that corrective action
may follow
 Improved estimating capability for future planning

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Unfortunately, the benefits cannot be achieved

without overcoming obstacles such as:

 Project complexity

 Customer's special requirements and scope changes

 Organizational restructuring

 Project risks

 Changes in technology

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 What is a successful project?
 Customer Requirements satisfied/exceeded
 Completed within allocated time frame
 Completed within allocated budget
Why do projects fail?
 Inadequate planning (the devil is in the details)
 Lack of monitoring progress
 Unresolved conflicts
 Lack of committed and dedicated resources
 Roles and responsibilities of the Project Manager
The Project Manager is responsible for delivering the project, with
authority and responsibility from the Project Board to run the project on a
day-to-day basis.
The project manager, operating within agreed reporting structures, is
responsible for:
managing the accomplishment of the required deliverables
planning and monitoring the project
managing project risks, including the development of contingency plans

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liaison with programme management (if the project is part of a programme)
and related projects to ensure that work is neither overlooked nor duplicated
monitoring overall progress and use of resources, initiating corrective action
where necessary
applying change control and configuration management processes
reporting through agreed lines on project progress
liaison with appointed project assurance representatives to assure the overall
direction and integrity of the project

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maintaining an awareness of potential interdependencies with other projects
and their impact
adopting and applying appropriate technical and quality strategies and
standards
identifying and obtaining support and advice required for the management,
planning and control of the project
managing project administration

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 Work Breakdown Structure(WBS)
 To plan a project, the total scope of work must be identified, subdivided
into manageable segments, assigned to individuals responsible to do the
work, and documented.
 It is a methodology for converting a large-scale project into detailed
schedules of activities for planning, scheduling, and control purposes.
 The objective of developing a WBS is to study the elemental components of
a project in detail.
 Work Breakdown Structure(WBS)
 A work-breakdown structure (WBS) in project management,
is a deliverable-oriented breakdown of a project into smaller
components.
 A work breakdown structure is a key project deliverable
that organizes the team's work into manageable sections.
 Work Breakdown Structure(WBS)
 The Project Management Body of Knowledge (PMBOK 5) defines the work-
breakdown structure A hierarchical decomposition of the total scope of
work to be carried out by the project team to accomplish the project
objectives and create the required deliverables.
 A work-breakdown structure element may be a product, data, service, or
any combination thereof.
 A WBS also provides the necessary framework for detailed cost
estimating and control.
 Work Breakdown Structure(WBS)
 In a project or contract, the WBS is developed by starting
with the end objective and successively subdividing it into
manageable components in terms of size, duration, and
responsibility (e.g., systems, subsystems, components, tasks,
subtasks, and work packages) which include all steps
necessary to achieve the objective.
 Work Breakdown Structure(WBS)
 The work-breakdown structure provides a common framework
for the natural development of the overall planning and control
of a contract and
 is the basis for dividing work into definable increments from
which the statement of work can be developed and technical,
schedule, cost, and labor hour reporting can be established.
 Work Breakdown Structure(WBS)
 A work breakdown structure permits summing of subordinate
costs for tasks, materials, etc., into their successively higher
level "parent" tasks, materials, etc.
 For each element of the work breakdown structure, a description
of the task to be performed is generated.
 This technique (sometimes called a system breakdown structure)
is used to define and organize the total scope of a project.
 Work Breakdown Structure(WBS)
 The WBS is organized around the primary products of the
project (or planned outcomes) instead of the work needed to
produce the products (planned actions).
 Since the planned outcomes are the desired ends of the project,
they form a relatively stable set of categories in which the costs
of the planned actions needed to achieve them can be collected.
 Work Breakdown Structure(WBS)
 A well-designed WBS makes it easy to assign each project
activity to one and only one terminal element of the WBS.
 The WBS also helps map requirements from one level of
system specification to another.
 The WBS may be displayed horizontally in outline form, or
vertically as a tree structure (like an organization chart).
 Using a WBS, a large project may be broken down into smaller
subprojects which may, in turn, be further subdivided into
another, lower level of more detailed sub component activities, and
so on.
 Eventually, all the tasks for every activity are identified,
commonalities are discovered, and unnecessary duplication can be
eliminated.
 Thus by applying the WBS approach, the overall project planning
and control can be improved.
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 Each WBS component is successively broken down into
smaller details at lower levels.
 Descending levels provide increasingly detailed
definition of project tasks.
 The complexity of project and the degree of control
desired determine the number of levels in the WBS.
 Level 1: This level contains only the final project
purpose.
 Level 2: This contains the major sub-components of
the project.
 Level 3: Contains definable components of the level - 2
subdivisions.
..
.
 Subsequent levels are constructed in more specific
detail depending on the level of control desired.
 If a complete WBS becomes too crowded, separate
WBSs may be drawn for level 2 components.
 Each WBS element is assigned a code that is used
for its identification throughout the project life
cycle.
 Alphanumeric codes may be used to indicate element
level as well as component group.
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 Design principle for work breakdown structures

1. Design principles= 100% rule

 An important design principle for work breakdown
structures is called the 100% rule.
 The 100% rule states that the WBS includes 100% of
the work defined by the project scope and captures all
deliverables – internal, external, interim – in terms of
the work to be completed, including project management.
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 The 100% rule is one of the most important principles
guiding the development, decomposition and evaluation
of the WBS.
 The rule applies at all levels within the hierarchy: the
sum of the work at the "child" level must equal 100% of
the work represented by the "parent" and the WBS
should not include any work that falls outside the actual
scope of the project.
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2. Mutually exclusive elements

 In addition to the 100% rule, it is important that

there is no overlap in scope definition between
different elements of a work breakdown structure.

3. Plan project outcomes, not project actions

4. Level of detail

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Project Breakdown Structure
Project Breakdown Structure
Project Breakdown Structure
Project Breakdown Structure
Project Breakdown Structure
 Project Organization
 Like any organization, projects can be managed and controlled
by using different type of organizational structure.

 Before selecting an organizational structure, the project team

should assess the nature of the job to be performed and its
requirements.
 The organizational structure may be defined in terms of
functional specializations, departmental proximity,
operational relationships, or product requirements

 Large and complex projects should be based on well-

designed structures that permit effective information
and decision processes.
Functional organization:
This is the most common type of formal organization, whereby
people are organized into groups dedicated to a particular functions.
Depending on the size and the type of auxiliary activities involved in
the project, several minor, but supporting, functional units can be
developed for a project.
The project headquarters is located in the specific functional
department.

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Functional Project Organization

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Functional Project Organization
Advantages
technological depth

Drawbacks
lines of communication outside functional department
slow
project rarely given high priority

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Product organization:
Another approach to organize a project is to use the end product
or goal of the project as the determining factor for personnel
structure.
This is often referred to as the pure project organization or,
simply, project organization.
The project is set up as a unique entity within the parent
organization.
It has its own dedicated technical staff and administration.

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 This type of organization is common in large project-oriented
organizations or organizations that have multiple product lines.

 Unlike the functional structure, the product organization

decentralizes functions.

 It creates a unit consisting of specialized skills around a given

project or product.

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The Pure Project Organization

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 The Pure Project Organization
 Advantages
Effective and efficient for large projects
Resources available as needed
Broad range of specialists
short lines of communication
 Drawbacks
Expensive for small projects
Specialists may have limited technological depth
May require high levels of duplication for certain specialties

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Matrix organization:

the matrix organization is a popular choice of management professionals.

 A matrix organization exists where there is multiple managerial

accountability and responsibility for a job function.

It attempts to combine the advantages of the functional structure and

the product organization structure.

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 There are usually two chains of command: horizontal and vertical.
 The horizontal line deals with the functional line responsibility
while the vertical line deals with the project line of
responsibility.
 The project manager has total responsibility and accountability
for the project success.
 The functional managers have the responsibility to achieve and
maintain high technical performance of a project.

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 The project that is organized under a matrix structure
may relate to specific problems, marketing issues, product
quality improvement, and so on.

 The project line in the matrix is usually of temporary

nature while the functional line is more permanent.

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Matrix Organization Structure

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Project Management-Project life Cycle
 It is convenient to think of project work as taking place in
several distinct stages.
 This chain of stages is commonly referred to as the "project life
cycle".
 The stages are closely linked to one another and follow a logical
progression.

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1.Start-up
 Purpose

 Strategic fit/objectives

 Scope(Draft)

 Terms of reference

 Draft schedule

 Budget estimate

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2. Planning
 set final Scope

 Select team members

 Plan deliverables

 Quality plan

 Baseline Schedule

 Communication plan

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3. Execution
 Execution of key deliverables

 Monitor/control of project activities

 Quality, time, cost and risk managements

 Issue resolution/reporting

 Communication

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4. Close out
 Celebrate/ Handing over the project to client

 Contract Close-out

 Team feedback

 Recommendations for further action

 Post implementation review

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 Bar Charts
 Bar charts are the pictorial representation of various tasks required to
be performed for accomplishment of the project objectives.

 These charts have formed the basis of development of many other

project management techniques.

 Henry L Gantt (1861 – 1919) around 1917 developed a system of bar

charts for scheduling and reporting progress of a project.
 These charts latter were known as Gantt Charts.

 It is a pictorial representation specifying the start and finish time for various
tasks to be performed in a project on a horizontal time-scale.

 Each project is broken down to physically identifiable and controllable units,

activity.

 Once the project has started the Gantt chart/ bar chart/ can further be used as a
tool for project control.
 Therefore, the bar charts are used for project planning and control tools.

 A bar chart consists of two co-ordinate axes, one(usually horizontal axis=in

practice the time scale is superimposed on a calendar) representing the time
elapsed and the other(the vertical axis = preferably at equi-distance) represent
the jobs or activities to be performed

 The beginning and the end of each bar represent the time of start and the time
of finish of that activity.
 Each bar represent the specific job or activity of the project.
 The length of the bar, therefore, represents the time required for the completion of
that job or activity.
 The project controlling is achieved by drawing a second line under the planned schedule
to indicate activity progress.
 The relative position of the progress line to planned line indicates percentage complete
and remaining duration, while the relative position between the progress line and time now
indicates actual progress against planned progress.
 Figure below presents a baseline Gantt chart and a tracking
Gantt chart for a project.
 The solid bar below the original schedule bar represents
the actual start and finish times for completed activities or
any portion of any activity completed.

 Use verb-noun form for naming activity, e.g. "create

drawings" or "build prototype". Use action verbs such as
"create", "define" and "gather" rather than "will be made"
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progress line

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Example on bar chart:

From the bar chart below, we conclude the following:

i.Activities P and Q can start simultaneously. Both the activities are

independent. However activity Q is completed much earlier than
activity P.

ii.Activity R starts only when activity Q is complete.

iii.However, activity S is independent of activity R. It starts earlier

than R is completed earlier.

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iv. Activity T starts only when activity S is complete

v. Activities U and R can start simultaneously –when

activity Q is complete.

vi. Activity V can start when activity P and S are complete.

End of activity V marks the completion of the project.

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Figure shows another bar chart for the project related to purchase
and installation of a lathe. The complete project consists of five
distinct activities. Each activity can not be started unless the previous
activity is finished

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From the above two examples, we find that there are:

some operations or activities, which can take place concurrently

while there are some activities that succeed a preceding activity

and can not be started unless the preceding activity is complete.

The concurrent activities or jobs are represented by bars

running parallel or overlapping each other time-wise.

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Exercise: The activity break down for a certain project is as under.
Activity No. 1 2 3 4 5 6 7

Duration 1 2 4 3 1 2 4
(weeks)
Activity 2 and activity 3 can be done concurrently, and both must follow
activity 1. Activity 2 must precede activity 4. Activity 5 can not begin
until both activities 2 and 3 are completed. Activity 6 can be started only
after activities 4 and 5 are complete. Activity 7 is the last activity which
can be started only after completion of activity 5. Prepare the bar char
for the project.
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 Example of Gantt Chart
Activity Month
0 | 2 | 4 | 6 | 8 | 10
Design house
and obtain
financing
Lay foundation
Order and
receive
materials
Build house
Select paint

Select carpet

Finish work
1 3 5 7 9
Months
 Example

 Draw the bar chart for "finalization of

design and work orders" for a building
project.

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Activity Description Time of
Completion
A Site selection and survey 4 weeks
B Design 6 weeks
C Preparation of drawings 3 weeks
D Preparation of specification
and tender document 2 weeks
E Tendering 4 weeks
F Selection of contractor 1 week
G Award of work order 1 week

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Bar chart for a building Project

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 The benefits of Gantt chart can be clearly seen
not only are the calculations simple but it
combines all the above information on one page.

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 Milestone Charts
 Milestones are tools used in project management to mark specific points
along a project timeline.

 These points may signal anchors such as a project start and end date, a
need for external review or input and budget checks, among others.

 In many instances, milestones do not impact project duration. Instead, they

focus on major progress points that must be reached to achieve success.

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 Milestone Charts
 “Milestones” are important checkpoints or interim goals for a project.

 Can be used to catch scheduling problems early.

 “Milestones” are name by noun-verb form, e.g. "report due", "parts

ordered", "prototype complete".

 Your plan will evolve so be flexible and update on a regular basis. It also
helps to identify risk areas for project.

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 Milestone Charts
 Milestone chart is modification over the original Gantt chart.

 Milestones are key events of main activity represented by

bar; these are specific points in time which mark the
completion of certain portions of the main activity.

 These points can easily be identified over the main bar.

 If the activity is broken or sub-divided into a number of sub-activities, each
one of which can be easily recognized during the progress of the project.

 Therefore, controlling can be easily done and inter relationships between

other similar activities can be easily established.

 The beginning and end of these sub-divided activities or tasks are termed as
milestones.
 Each main task contains some specific points in time which can be
easily recognized, and through which controlling can be achieved.

 Each milestone can be considered to be specific event along the main

activity.

 Each milestone is represented either by a circle or by a square, and is

serially marked.
 Network Diagram
 As project becomes larger and more complex, the Gantt
chart was found to be lacking for a planning and control
tool, because it could not indicate the logical
relationships between activities.

 For a project plan to be effective it must equally address

the parameters of activity time and network - logic.
 Network Diagram
 A network is a flow diagram consisting of activities and events,
connected logically and sequentially
 It is always possible to break up the entire project into a number
of distinct, well defined jobs or tasks (called activities).
 The beginning or end of each such activity constitutes an event
of the project.
 Network Diagram
 In the network diagram, an activity is represented by
arrows while events are represented by nodes.
 The shape of the nodes may be: circular, square,
rectangular, oval, or any other regular geometrical figure.
But it is usually, by circles, as shown
 In networking of projects, the arrow diagram is of
primary importance. Some of the advantages of network
diagram or arrow diagram are:

 It clearly shows the inter-relationship between

events.

 The project is seen as integrated whole, thus making

it easier for control.
 Event : is defined as an instant in time.
 In a project, an event, marks the initiation of an activity, and
the completion of an activity,
 An event is that particular instant of time at which some
specific part of a plan has been or is to be achieved.
 Design completed, pipe line laid, electricity installed, etc are
examples of events.

o
 It is represented by a circle ‘ ’ in a network which is also

known as a node or connector.

An event has three basic properties:

(i) An event is either the start or completion of an activity,

(ii) An event represents a noteworthy, significant and

recognizable point in the project. Events act as control points
in a project.

(iii) An event is an accomplishment occurring at an instantaneous

point in time, but requiring no time or resources itself.
SPECIFYING THE EVENTS
 A particular event in the network diagram may be specified
as : Tail event ; Head event and Dual role event.

1. Tail event: is the one

which marks the beginning of
an activity. If a particular
tail event represents the
commencement of the
project, it is known as the
initial event,
2. Head event: All activities have an
ending marked by head event. If a
particular head event marks the
completion of the project it is known
as the final event or ,end event.

3. Dual role events: are head

event to some activity and tail
event to other activity. All
events except initial and final
events are dual event.
 An event can be further classified into the following
categories:
a. Merge event: When more than one activity come
and join an event,
b. Burst event: When more than one activity leave an
event,
c. Merge and burst event: An activity may be a
merge and burst event at the same time
 Different types of event formation

Merge event Burst event Merge and burst event

INTER RELATIONSHIP BETWEEN EVENTS
The order or sequence relates various events as:
a. Successor events: the event or events that follow
another
event are called successor events to that event.
a. Predecessor events: the event or events that occur
before another event are called predecessor events to
that event
 Activity: Any individual operation, which utilizes resources and
has a beginning and an end.
 Activity is the actual performance of a task.
 Activity is the work required to complete a specific event.
 An arrow is commonly used to represent an activity with its
head indicating the direction of progress in the project(from
left to right).

 The length of arrow does neither A represent the magnitude of

work involved nor the time required for its completion.
 A project is divided into a time consuming activities.
 An activity is a recognizable part of a project that requires
time and resources (manpower, material, space, facilities
etc.) for its completion.

Example; of activity lathe installed = not

excavate trench= activity activity( event)
mix concrete = activity design completed = not
prepare specifications=activity activity(event)
assemble parts = activity prepare budget = activity
 The activity can either be identified in terms of
events(number) or in terms of activity by the use of
alphabet.

INTER RELATIONSHIPS
 depending upon the interdependency, we can categorize
activities as (i) parallel activities, and (ii) serial activities.
 parallel activities: can be performed simultaneously and
independent to each other
 Serial activities: are to be performed one after the
other, in succession.
 Predecessor activity: Activities that must be completed
immediately prior to the start of another activity.
 Successor activity: Activities that cannot be started
until one or more of other activities are completed, but
immediately succeed them
 Dummy activity: An activity which does not consume any
kind of resource but merely depicts dependence of
activity.
 the dummy activity is inserted in the network to clarify
the activity pattern in the following two ways:

 To make the activities with common starting and

ending/finishing/ points unique and distinguishable.
 To identify and maintain the proper precedence
relationship between activities that are not
connected with arrows.
activity predecessor
N -
O -
P -
Q O, P
R N, P
 For example, consider a situation where A and B are
concurrent activities, C is dependent on A, and D is
dependent on A and B both.
 Such a situation can be handled by using a dummy
activity
activity predecessor
A -
B -
C A
D A, B
 Another situation, consider a case where activities B and C
have the same job reference and they can be started
independently on completion of activity A. But, activity D
could be started only completion of B and C.

activity predecessor
A -
B A
C A
D B, C
1 - 123
 More on Dummy activity.
 If a dummy job is the only one emanating/originating/ from
its initial node(1), it can be removed and the activity
terminating at that node can be directly connected to that
node to which the dummy was terminating.
activity predecessor
A -
B A
C B
P -
Q -
R A, P, Q
 More on Dummy activity.
 If a dummy activity (node1 2) is the only one terminating
into a node, the dummy can be removed and the two
node(1 2) at the two ends of the dummy can be merged
into one.
activity predecessor
A -
B A
C A, P
D A, Q
P -
Q -
 More on Dummy activity.
 If two or more activities, emanating from different
nodes, have identical set of predecessors some of
which also appear in different predecessor sets of
other activities, the two activities (having identical
predecessors) should emanate from a single node. This
node can then be connected to their predecessor
activities by dummies. As shown below
More on Dummy activity.
activity predecessor
P -
A -
C -
R -
Q A, P
B A, C
D A, C
S C, R
 More on Dummy activity.
 If two or more activities, terminating into different
nodes, have identical set of successors, the latter having
other predecessors as well, the two activities (having
identical set of successors) should terminate into one
single node.
 This node can then be connected to their successors
through appropriate dummies. As shown below.
More on Dummy activity.

activity predecessor
P -
A -
B -
R -
Q P, A, B
S R, A, B
 Rules for Drawing Network Diagram
 In order to draw a network diagram, the following
general rules have to be considered:
 Each activity is represented only by one arrow in the
network:
• This implies that no single activity can be represented
twice in the network.
 No two activities can be identified by the same events:
 For example, activities a and b have the same end events. The
procedure is to introduce a dummy activity either between a and one
of end events or between b and one of the events.
 Modified representations after introducing a dummy activity d is
shown in figure
• As a result of using the dummy, activities a and b can now
be identified by unique end events.
• It must be noted that a dummy activity does not consume
any time or resource.
 Arrows should normally not cross each other.

 If this crossing is not avoidable, the length of the arrow

should be broken to bridge over the other, as shown in
figure.
 Any arrow should represent singular situation, i.e.
individuality and separate entity of an activity must be
maintained in a network diagram.
 Thus, the network shown in figure is wrong since activity P
has two arrows.
 Check the precedence relationship in the arrow
diagram, by the following questions.
 What activity must be completed immediately
before this activity can start?
 What activities must follow this activity?
 What activities must occur simultaneously with this
activity?
 Apart from this, a few important suggestions for drawing
good networks are:
 Try to avoid arrows which cross each other.
 Use straight arrows.
 Do not attempt to represent duration of activity by arrow
length.
 Use arrows from left to right, vertical and standing arrows
may be used if necessary.
 Use dummies freely in rough draft but final network should
not have any redundant dummies.
 The network has only one entry point (start/initial/ event) and
one point of emergence (end event).
COMMON PARTIAL SITUATIONS IN NETWORK
B is controlled by A.
(Operation B cannot begin until .
operation A is completed.)

C is controlled by A and B.
(Operation C cannot begin until
operations A and B are completed.)

Activities B and C are controlled by

activity A. (Neither of activities Band C
can start unless A is completed.)
Activities C and D are controlled by
activities A and B. Neither of activities
C and D can start until A and B are
completed.

Activity D is controlled by A and B,

while activity E is controlled by activity
B and C.
Activity E is controlled by C

Activity D is controlled
by A, B and C. However,
activity E is controlled by Band C.
COMMON PARTIAL SITUATIONS IN NETWORK
Activity X is controlled by D and A;
activity Y is controlled by A, Band C,
while activity Z is controlled by D only.
Activity C is controlled by A. Activity Y
is controlled by C.

Activity A controls C and D, while

activity B controls D and E. Thus D is
controlled by both A and B. Activity E
is controlled by B.
 NUMBERING THE EVENTS
 It is essential to number the events or node points.
 The activities joining the nodes can better be identified on
the network by the event number or node numbers at the
tail and head of the activity.
 The event numbering should be scientifically done so that
they reflect their logical sequence.
 In a big network, the problem of numbering can be
simplified if the rules devised by D.R. Fulkerson are
followed.
 The sequential numbering to the events may be assigned in
the following steps
1. There is a single initial event in a network diagram. This initial
event will have arrows coming out of it and none entering it.
Number this initial event as 1.
2. Neglect all the arrows emerging out of the initial event
numbered 1. Doing so will apparently provide one or more new
initial events.
3. Number these .apparently produced new initial events as 2, 3, 4
etc.
4. Again neglect all emerging arrows from these numbered events;
this will create few more initial events.
5. Follow step 3.
6. Continue this operation until the last event, which has no
emerging arrows, is numbered.
Example. Using, Fulkerson rule, number the events of the
network shown in figure
Example:
Draw a network diagram for, the project having
9 activities, with the following inter-relationships:
i. C follows D but precedes F.
ii. C follows B but precedes H.
iii. G follows F but precedes I.
iv. E follows A but precedes I.
v. D follows A.
vi. H and I terminate at the same time.
vii. A and B start at the same, time.
Example:
A project consists of six activities designated from A to F,
with the following relationships :
i. A is the first job to be performed.
ii. B and C can be done concurrently, and must follow A.
iii. B must precede D.
iv. E must succeed C, but it cannot start until B is complete.
v. The last operation F is dependent on the completion of
both(D and E).
Draw the network diagram.
Example: The maintenance project of a building consists ten
jobs. The predecessor relationships are identified by their
node numbers, as indicated below: Draw the network
diagram for the project.
Activity A B C D E

Events 1,2 2,3 2,4 3,6 3,5

Activity F G H I J

Events 4,5 4,7 5,8 6,8 7,8

 Example

Activity Description Precedence Time

(Weeks)
A Excavate - 2
B Lay the foundation A 4
C Put up the rough wall B 10
D Put up the roof C 6
E Install the exterior plumbing C 4
F Install the interior plumbing E 5
G Put up the exterior siding D 7
H Do the exterior painting E,G 9
I Do the electrical work C 7
J Put up the wall board F,I 8
K Install the flooring J 4
L Do the interior painting J 5
M(end) Install the exterior fixtures H 2
N(end) Install the interior fixtures K,L 6
 5
G
D

H
E D1 8 M
A B C 4 6 10 13
1 2
3
N
I F

11

7 J L
D2
9

K
12
1 - 147
 Activity Times and Level of Detail.
 The most common network scheduling methods are:
 Critical Path Method (CPM): activity-oriented and
 Program Evaluation and Review Technique (PERT): event oriented.
 Both methods (CPM and PERT) are extensively used as dynamic
control tools in the management of a large project.
 They give the project manager a comprehensive picture of the
project status at any time.

1 - 148
 Critical Path Method (CPM)
 CPM was initially set-up to address the time cost trade-off dilemma,
where there is a complex relationship between project time to
complete and cost to complete.
 CPM enables the planner to model the effect various project time
cycles have on direct costs.
 Shortening the project duration will reduce indirect costs, but may
increase the direct costs.
 This technique is often called Project crashing

1 - 149
 Program Evaluation and Review Techniques (PERT)
 A project is composed of many diversified activities which contribute to
its completion according to a predetermined schedule.
 There may be many uncertainties associated with the activities of project
 PERT is a technique that statistically present knowledge about these
activities and the activity uncertainties.
 The PERT system uses a network diagram consisting of events which must
be established to reach project objectives.

1 - 150
UNCERTAINTIES: USE OF PERT
 As soon as the work of network construction for a project is over, the item of
concern is the determination of time required for the occurrence of each event.
 Since the activities are to be performed in future, the time period required for
the execution of each activity or job can only be estimated.
 The PERT is the non-deterministic approach or the probabilistic approach to
state limits of activity duration will lie. Between these limits the probability of
executing the activity is calculated.

1 - 151
 PERT system is preferred those projects in which correct
time determination for various activities cannot be made.
 PERT application is favorable in projects where much of
their design and Construction or production requires new
developments in materials and technology.
 Hence, PERT is used research and development type
projects. All this is to say that there is a large amount of
uncertainties in the development of new systems.
1 - 152
PERT TIME ESTIMATES
Time is the most essential and basic variable in PERT system.
In the PERT network an estimate is made of not only the most
probable time required to complete the activity, but some measure of
uncertainty is also incorporated. In this estimate, two more time
estimates are considered: the pessimistic estimate and the optimistic
estimate.
Thus to take the uncertainties into account, PERT planners make
three kinds of time estimates:
1 - 153
1. The optimistic time estimate(tO):-
 This is the shortest possible time in which an activity
can be completed, under ideal conditions.
 This particular time estimate represents the time in
which we could complete the activity or job if everything
went along perfectly, with no problems or adverse
conditions.
 Better than normal conditions are assumed to prevail.
1 - 154
2. The pessimistic time estimate(tP):-

It is the best guess of the maximum time that would be

required to complete the activity.

This particular time estimate represents the time it might

take us to complete a particular activity if every thing went
wrong and abnormal situations prevailed.

(in case climatic conditions, explosions, accidents, etc.,

come into effect to retard the activity).
1 - 155
3. The most likely time estimate(tL):-
The most likely time or most probable time is the time that
represents the time the activity would most often require if normal
conditions prevail.
This time estimate lies between the optimistic and pessimistic
time estimates.
 This time estimate reflects a situation where conditions are
normal, and things are as usual.
the duration that would occur most often if the activity was
repeated many times under the same conditions
1 - 156
THE BETA DISTRIBUTION
The beta distribution is a
typical type of probability
distribution, which fits well
for PERT analysis.
 A beta distribution is the
one which is not symmetrical
about its apex (as shown in
figure a & b). 1 - 157
FREQUENCY DISTRIBUTION
If a normal curve is plotted between the time of completion
and the number of jobs completed in that time, a frequency
distribution curve, shown below can be obtained.
From the curve it is clear that there are large numbers of
cases of the activity that are completed in the most likely time.
Point P corresponds to the optimistic time(to), point R
corresponds to the pessimistic time(tp) while point Q
corresponds to the most likely time (tL)

1 - 158
1 - 159
MEAN, VARIANCE AND STANDARD DEVIATION
Mean. Mean of the distribution may be defined by the
algebraic sum of time durations taken by various jobs divided
by the number of the jobs/activities/:

Deviation. Deviation is the difference between the time

under consideration and the mean time. This difference may
be either positive or negative,
1 - 160
 Variance, Variance is the mean of the squared deviations.

1 - 161
 Variance is commonly used in statistics as measure of
variability of the distribution.

 Standard deviation, It is simply the square root of the

variance.

1 - 162
 Normal Probability Distribution: The probability curve is
not necessarily symmetrical about its apex. If the curve is
symmetrical, then it is known to have normal distribution.
The mean of normal distribution is denoted by µ.

 Calculating the standard deviation of the minimum time( tO)

and maximum time( tP) are known within +/-3σ. The standard

deviation is given by: (t p  t o )

 
6
1 - 163
1 - 164
EXPECTED TIME (tE)

Is the average time taken for the completion of the

activity or job.

In computing the expected time, a weight of 1 is given to

the optimistic time to, weight of 4 to the most likely time(tL)
and weight of 1 to the most pessimistic time(tp)
( t o  4t l  t p )
Thus, tE 
6
1 - 165
 The three time estimates to (optimistic time),tp

(pessimistic time) and tL (most likely time) are identified

on the Beta-distribution.

 Theses three times were imposed on a normal distribution

to calculate the activity’s expected time tE as,

( t o  4t l  t p ) a  4m  b
tE  
6 6
2 t - t 
2
b -a  p o 
var ience, v  

 
  

 6  6
   1 - 166
 
 Let us take examples of estimated times of completion of two jobs A and
B, as under.

to tL tp

Job A 4 6 11
 The
Job B expected
5 time for10
these jobs are:
12

( t o  4t l  t p ) ( 4  ( 4 * 6)  11)
(t E ) 
 Similarly
A (tE)B=9.5days   6.5days
6 6

1 - 167
 EXPECTED TIME FOR ACTIVITIES IN SERIES
 When a number of activities are in series, the expected
time for the path, along the activities can be found by
first finding the expected time (tE) for each activity, and
then taking their sum.
 For example, consider the three activities 11-12, 12-13 and
13-14 shown in figure below with their time estimates(tO,
tL and tP) marked,

1 - 168
 The computation is as shown in table below:

activity tL tp tE
to

11-12 4 6 8 6
12-13 5 7 11 7.333
13-14 4 10 12 9.333
∑tE =22.66

1 - 169
 The standard deviation for the last event ( network ending
event) in series of activity, is given by:
Where: σ1, σ2,…, σn are the standard
 t      ...  
2
1
2
2
2
n
E
dev. Of each activities .
σtE= standard dev of the network
ending event
For the above example,
for 11-12 σ1 =(8-4)/6=0.667, for 12-13 σ2 =(11-5)/6=1 and
for 13-14 σ1 =(12-4)/6=1.337 (0.667) 2  (1) 2  (1.333) 2
Hence the stand. Dev. Of event 14, σtE=
 1.322
 1.795 1 - 170
 A similar approach can be made for a network consisting
of several path, each path with a number of activities
in series.
 When tE for each path in a network is known, the
critical path can be chosen easily.
 A critical path is the one which consumes maximum of
time resources.

1 - 171
Example: For a particular activity of a project, time
estimates received from two engineers X and Yare as
follows:
to tL tr
Engineer X 4 6 8
Engineer Y 3 5 8
State who is more certain about the time of completion of
the job:
Hence engineer X has
reliable estimate for
the activity.

1 - 172
Example: The network for a certain project is shown in
figure. Determine the expected time for each of the path?
Which path is critical?
Solution:
In the PERT analysis, the
expected time tE is taken
as the basis for finding
the critical path.

1 - 173
 Thus, expected
time for each
activity can be
found.
 The expected time
(tE) for any path is
equal to ∑tE of all
activities. The
computations are
shown in Table.

1 - 174
 Time Estimate and Critical Path in
Network Analysis:
 Once the network of a project is constructed, the time analysis
of the network becomes essential for planning various activities
of the project.

 An activity-time is a forecast of the time an activity is

expected to take from its starting point to its completion under
normal conditions.
The main objective of the time analysis is to prepare a planning
schedule of the project, which should include the following
factors:
 Total completion time for the project.
 Earliest time when each activity can start.
 Latest time when each activity can be started without delay of the
total project.
 Float for each activity, i.e., the amount of time by which the completion
of an activity can be delayed without delaying the total project
completion.
 Identification of critical activities and critical path.
path
The following notations are used for the basic scheduling
computation techniques:
(i, j ) = Activity (i, j) with tail event i and head event j.

TE or E i = Earliest occurrence time of event i.

TL or L j = Latest allowable occurrence time of event j.

Dij = Estimated completion time of activity (i , j)

( E S ) ij = Earliest starting time of activity (i , j)

( E f ) ij

( LS ) ij = Latest starting time of activity (i , j)

( L f ) ij = Latest finish time of activity ( i , j)
The basic scheduling computation can be put under the
following two categories.
i)Forward Pass Computations:
 Before starting computations, the occurrence time of initial
event of the network is fixed.
 Then, the forward pass computation yields the earliest start and
earliest finish time for each activity (i, j), and indirectly the
earliest expected occurrence time for each event.
 This is mainly done by using the following steps:
Step 1. The computations begin from the ‘start ’ node and
move towards the ‘end ’ node.
Step 2.
a) Earliest starting time of activity (i, j) is the earliest event
time of the tail event i.e.,
( E S ) ij  E i

b) Earliest finish time of activity (i, j) is the earliest

starting time of activity (i, j) plus the activity time.
i.e.,
( E f ) ij  ( E S ) ij  Dij or

( E f ) ij  E i  Dij
c) Earliest event time for event j is the maximum
of the earliest finish times of all activities
ending into that event. That is,
Ej  max.i [(Ef )ij for all immediate predecessor of (i, j) ]or Ej  max.i [Ei  Dij ]
ii) Backward Pass Computations

 The latest event time, (L) indicates the time by which all activities
entering into that event must be completed without delaying the
completion of the project.

 These can be computed by reversing the method of calculation used

for earliest event times.

 This is done in the following steps:

Step 1. For ending event assume,
latest finish time is equal to earliest finish time
EL

Remember that all E’s have been computed by forward pass

computations.

Step 2. Latest finish time of activity (i, j) is equal to the

latest event time of event j. i.e.,

( L f ) ij  L
Step 3. Latest starting time of activity (i , j) = the latest completion
time of activity (i , j) minus the activity time, or

( LS ) ij  ( L f ) ij  Dij or

( L S )ij  L j  Dij

Step 4. Latest event time for event i is the minimum of the latest
start time of all activities originating from the event, i.e.,

Li  min. j [(LS )ij for all immediate successors of (i, j)]

 min. j [(L f )ij - Dij ]
 min. j [ L j  Dij ]
 Determination of Float and Slack Times
 Total float: The amount of time by which the completion of an
activity could be delayed beyond the earliest expected completion
time without affecting the overall project duration time.
 Mathematically, the total float of an activity (i , j) is the difference
between the latest start time and the earliest start time of that
activity. Hence the total float for an activity (i , j), denoted by

(T f ) ij  ( Latest start  Earliest start )

(T f ) ij  ( LS ) ij  ( E S ) ij
 Event slacks: For any given event, the event slack is defined as
the difference between the latest event and earliest event times.
Mathematically, for a given activity (i, j),

Head event slack  L j  E j

Tail event slack  Li  E i

 Determination of the Critical Path
i. Critical event: Since the slack of an event is the
difference between the latest and earliest event times.
i.e.,
Slack (i )  Li  Ei

 the events with zero slack times are called critical

events.
events
 In other words, the event i is said to be critical if:-
E i  Li
ii) Critical activity:
 Since the difference between the latest start time and earliest
start time of an activity is usually called as total float,

 the activities with zero total float are known as critical activities.

 In other words an activity is said to be critical if a delay in its

start will cause a further delay in the completion date of the
entire project.
 Obviously, a non-critical activity is such that the time between

its earliest start and its latest completion dates (as allowed by

the project) is longer than its actual duration. In this case,

non-critical activity is said to have a slack or float time.

iii) Critical path:
 The sequence of critical activities in a network is called the
critical path.
 The critical path is the longest path in the network from
the starting event to ending event and defines the minimum
time required to complete the project.
 The length of the path is the sum of the individual times of
the activities lying on the path.
 If the activities on a critical path are delayed by a day, the project would also
be delayed by a day unless the times of the future critical activities are
reduced by a day by different means.
 The critical path is denoted by double or darker lines to make distinction from
the other non-critical paths.
 Thus the critical path has two features:
 If the project has to be shortened, then some of the activities on that path
must also be shortened.
 The application of additional resources on other activities will not give the
desired result unless that critical path is shortened first.
 Example on CPM

Figure
Expanded network
for building a house
showing
concurrent
activities.

Table
Possible Paths to
complete the
House-Building
Network
(to p14)
1 - 191
 Solution:
To find the critical path:
Completion time for:
path A: 12  3  4  6  7, 3 + 2 + 0 + 3 + 1 = 9 months (Critical
Path)
path B: 1  2  3  4  5  6  7, 3 + 2 + 0 + 1 + 1 + 1 = 8 months

path C: 1  2  4  6  7, 3 + 1 + 3 + 1 = 8 months
path D: 1  2  4  5  6  7, 3 + 1 + 1 + 1 + 1 = 7 months

The critical path is the longest path through the network; the
minimum time the network can be completed. 1 - 192
 ES is the earliest time an activity can start. ESij = Maximum (EFi)
EF is the earliest start time plus the activity time. EFij = ESij + Dij

Branches ESij = max(EFi) EFij=ESij+tij

1-2 ES12= max(EF1)= EF12=ES12+t12=
2-3 ES23=max(EF2)= EF23=ES23+t23=
2-4 ES24=max(EF2)= EF24=
3-4 ES34=max(EF3)= EF34=
4-5
ES45=max(EF4)= EF45=
4-6
ES46=max(EF4)= EF46=
5-6
6-7 ES56=max(EF5)= EF56=
ES =max(EF )= EF =
Forward pass computation:-The
67
overall computation is shown
6 67
in next slide 1 - 193
 - ES is the earliest time an activity can start. ESij = Maximum (EFi)
- EF is the earliest start time plus the activity time. EFij = ESij + tij

add all ti for

note 2 Branch ESij = max (EFi ) EFij = ESij + tij
1 -2 ES12 = max (EF1) = 0 EF12 = ES12 + t12
= 0 + 3 =3
2-3 ES23 = max (EF2) = 3 EF23=ES23+t23
=3+2=5
2-4 ES24 = max(EF2) = 3 EF24=ES24+t24
=3 + 1 = 4
Add all t to note 4 3-4 ES34= max (EF3) = 5 EF34=ES34 + t34
=5+0=5
and take the longest 4 -5 ES45= max (ES4) = 5 EF45 = ES45 + t45
time =5+1=6
4 -6 ES46=max(EF4) = 5 EF46=ES46+t46
Max (node 3+t34, =5 + 3 = 8
5-6 ES56=max(EF5) = 6 EF56=ES56 +t56
node2+t24) =6 + 1 = 7
6-7 ES67=max(EF6) =8 EF67=ES67+t67
max (5+0, 3+1) = 8+ 1 = 9

=max(5,4)=5 Max(node4+t46,node5+t56
=max(5+3,5+1)=8 1 - 194
 The Project Network
Activity Scheduling- Earliest Times
- ES is the earliest time an activity can start. ESij = Maximum (EFi)

- EF is the earliest start time plus the activity time. EFij = ESij + tij

Earliest activity start and finish times

1 - 195
 Branches LSij = LFij-tij LFij=min(LSj)
1-2 LS12 = Li12-t12 = LF12=min(LS2)=
2-3 LS23 = LF23-t23 = LF23=min(LS3)=
2-4 LS24 = LF24-t24 =
LF24=min(LS4)=
3-4 LS34 = LF34-t34 =
LF34=min(LS4)=
4-5
LS45 = LF45-t45 = LF45=min(LS5)=
4-6
LS46 = LF46-i46 = LF46=min(LS6)=
5-6
LS56 = LF56-t56 = LF56=min(LS6)=
6-7
LS67 = LF67-t67 =
LF67=min(LS7)=

Backward pass computation: The overall computational is shown in next slide 1 - 196
 LS is the latest time an activity can start without delaying critical path time. LS ij = LFij - tij
LF is the latest finish time LFij = Minimum (LSj)

Min(node3-t23,node4-t24)
=Min(5-2,5-1)=Min(3,4)=3
Branches LSij=LFij-tij LFij=min LSj

1-2 LS12=LF12-t12 = 3-3 =0 LF12 = Min(LS2) =3

2-3 LS23=LF23-t23=5-2=3 LF23=Min(LS3) = 5

2-4 LS24=LF24-t24=5-1=4 LF24=Min(LS4)=5 Min(node 6-t46,node5-t45)

3-4 LS34=LF34-t34=5-0 = 5 LF34=Min(LS4) = 5 =Min(8-3,7-1)
4-5 LS45=LF45-t45 = 7-1=6 LF45=Min(LS5)=7 =Min(5,6)=5

4-6 LS46=LF46-t46=8-3=5 LF46=Min(LS6)=8

5-6 LS56=LF56-t56=8-1=7 LF56=Min(LS6)=8
Min(node 7-t67)
6-7 LS67=LF67-t67=9-1=8 LF67=Min(LS67)=9
=Min(9-1)=8

Start with the end node first

Same as EF67
from the previous slide 1 - 197
 The Project Network
Activity Scheduling - Latest Times
- LS is the latest time an activity can start without delaying critical path time. LS ij = LFij - tij
- LF is the latest finish time LFij = Minimum (LSj)

1 - 198
 The Project Network Calculating Activity Slack Time
- Slack, Sij, computed as follows: Sij = LSij - ESij or Sij = LFij - EFij

1 - 199
1 - 200
Example 2

1 - 201
Example: on PERT and CPM

1 - 202
Solution:-

a  4m  b 2
t 
v  
b - a 
6  6 



1 - 203
Table:- Activity Earliest and Latest Times and Slack

1 - 204
Determining the CPM

Figure: Earliest and latest activity times, and critical path

1 - 205
 Project Crashing
 In CPM, time is related to cost and the objective is to develop an optimum time-cost
relationship.
 Many times, it becomes necessary to complete the project earlier than the normal
time (latest allowable time).
 In such situations, the cost of expediting the operations or activities has to be
considered.
 Crashing makes use of the cost estimate along with the time estimate and provides a
schedule for completing the activities at the minimum total cost.

1 - 206
 During crashing activity, the overall project duration can be reduced by
reducing the duration of only the critical activities in the project
network by deploying more resources.
 In CPM analysis of crashing there are two time and cost estimates for
each activity:
'normal estimate' and
'crash estimate.'
estimate

1 - 207
 PROJECT COST
 For any project, the relationship between total cost and overall duration is shown in the Figure
below.

 It is clear from the figure that:

(a) If a project goes on indefinitely, the cost will increase,

(b) Similarly, cost will increase if project is expedited/shortened,

(c) Cost is minimum at some optimum project duration .

 Our main concern is to find the project duration which will keep the total project cost at a
minimum.
minimum

1 - 208
1 - 209
 Total Project Cost is the sum of two separate costs:

A. the indirect cost related to the control or direction of

that work, financial overhead, lost production, and the
like , and

B. the direct cost for accomplishing the work.

1 - 210
A. INDIRECT PROJECT COST

Indirect costs on a project are those expenditures which cannot be clearly

allocated to the individual activities of a project, but are assessed as a whole.

The indirect cost includes the expenditure related to administrative and

establishment charges, overhead, supervision, expenditure on a central, store
organization, loss of revenue, lost profit, penalty etc. etc.

1 - 211
B. DIRECT PROJECT COST
Direct project costs are those expenditures which are directly chargeable to and can be
identified specifically with the activities of the project.
These include labor cost, material cost, equipment cost, etc
Figure below shows a generalized curve between direct cost and project duration.
The project has the highest cost corresponding to the crash duration and has normal cost
corresponding to the normal duration.
duration
Thus we have two types of costs and two types of times defined below.

1 - 212
1 - 213
 Normal time: is the standard time that an estimator would usually allow for an activity.

 Crash time : is the minimum possible time in which an activity can be completed, by employing
extra resources.

 Crash time is that time, beyond which the activity cannot be shortened by any amount of increase
in resources.

 Normal cost: is direct cost required to complete the activity in normal time duration.

 Crash cost: is the direct cost corresponding to the completion of the activity, within crash time.

1 - 214
 SLOPE OF DIRECT COST CURVE

 The straight line or segmented approximation of the direct Cost curve is helpful in
carrying out the project cost analysis,

 In such analysis, the cost slope is used.

Cost Slope

 The cost slope is the slope of the direct cost curve, approximated as straight line.

 It is defined as follows

1 - 215
1 - 216
 TOTAL PROJECT COST AND OPTIMUM DURATION
 The total project cost is the sum of the direct costs and indirect costs.
 Figure below shows the indirect cost curve, direct cost curve and the
corresponding total cost curve.
 From the total cost curve ACB of figure below, we find that the minimum total
cost is obtained at some duration known as the optimum duration. The
corresponding cost is known as the minimum cost.
 If the project duration is increased, total cost will increase, while if project
duration is decreased to the crash value, project cost will be the highest.

1 - 217
1 - 218
 THE NETWORK COST OPTIMIZATION

 The normal time that the project will take for its completion will be the sum of
the normal time durations of each activity along the critical path.

 Similarly, the minimum time that the project will take for its completion will be
the sum of the crashed time duration of each activity along the critical path,

 If all the activities (critical as well as non-critical) are crashed, the cost will be
very high without any additional advantage

1 - 219
 The non-critical activities need not be speeded up, since their crashing is not going
to decrease the project duration further.

 However, it may happen that certain non-critical activities may become critical in
the process of crashing the critical activities.

 It is therefore essential to proceed step by step in crashing one critical activity

at a time and examining whether any other non-critical activity has also become
critical in that process or not.

1 - 220
 For this, it is better to start with crashing first that critical activity which
has the lowest cost slope.

 Then we take another critical activity which is having next higher cost slope.

 While crashing an activity fully (i.e. by ∆t duration), it should be examined

whether this crashing affects any other non-critical activity or not.

1 - 221
 STEPS IN TIME - COST OPTIMIZATION

 The time-cost optimization is done in the following steps:

1. ESTABLISH: direct cost-time relationships for various activities of the project, by
analyzing past cost records
2. DETERMINE: cost slopes for various activities and arrange them in the ascending
order of cost slope.
3. COMPUTE: direct cost for the network with normal duration of activities.
4. CRASH: the activities in the critical path as per ranking, i.e. starting with the critical
activity having the lowest COST slope.

1 - 222
5) CONTINUE: crashing the critical activities in the ascending order of the slope.
6) CRASH: parallel non-critical activities which have become critical by the reduction of critical path
duration due to crashing insteps 4 and 5.
7) CONTINUE: crashing process through steps 4 to 6, till a stage is reached beyond which no further
crashing is possible.
8) FIND: Total cost of project at every stage by adding indirect costs to the direct costs determined
above.
9) PLOT: total cost-duration curve.
10) PICK UP: the optimum duration corresponding to which least total project cost is obtained.

1 - 223
 The process of time-cost optimization is illustrated with the following examples.

ILLUSTRATIVE EXAMPLE

Example 1. Table below gives the information about various critical activities of network shown in
figure below:

The project overhead costs are @ Birr 300.00 per day. Determine:

uDirect cost-duration relationship.

uTotal cost-duration relationship and the corresponding least cost plan (network cost optimization)

1 - 224
Table

Figure
1 - 225
Solution
Step 1: Cost-slopes.
Figure above shows the network, with the normal duration of each activity
entered below its activity arrow, while the crash duration entered in the
bracket.
The cost slope for each activity will be as follows:

1 - 226
Step2. Normal duration direct cost

The normal duration for the project=9+5=14 days. ,

Therefore; Normal duration direct cost = 8000+5000.

= 13000.
Step 3. Activity 2-3 has the least slope. Let us therefore crash this activity first
Duration by which activity 2-3 can be crashed =2 days.
Extra cost of crashing activity = 2-3 by 2 days
= 250x2=500
Project duration=9+3=12 days.
Therefore; direct cost for 12days project duration==1300+500 = 13500

1 - 227
Step4. After having fully crashed activity 2-3, let us crash activity 1-
2 from its normal duration of 9 days to its crash duration of 6 days.
∆t=9-6=3 days.
Extra cost of crashing=3 x 500=1500
Project duration=6+3=9 days.
Therefore; direct cost for 9 days project duration=13500+1500=15000
The corresponding network with all the activities crashed is shown in figure
below:

1 - 228
Step 5: Total cost of project
The total cost of the project, for any duration, is obtained by adding
the indirect costs to the corresponding direct costs. The values are
tabulated in Table below:

1 - 229
Step 6. Cost and duration on curve(Cost-Time Curve)
 Figure below shows the cost-time curves for direct cost,
indirect cost and total cost.
 The total cost is minimum for a project duration of 12 days.
 Thus the optimum duration of the project is 12 days and
minimum cost corresponding to it is Birr. 17100.

1 - 230
1 - 231
 Resources Allocation
INTRODUCTION
A resource is a physical variable, such as men, materials, machines, space, money that is required
for completing various activities/jobs of a project.
Availability of manpower (supervisory staff, technical and specialist personnel, skilled and
unskilled labor etc.,) and materials etc. may be restricted.
Then, the various activities of the project are to be scheduled in such a way that the demand of
various resources is more or less uniform all along the project duration.

1 - 232
RESOURCES USAGE PROFILES: HISTOGRAMS
In a network, various activities are involved, and each activity requires some resources to perform it
There may be activities which are to be performed simultaneously and may require common resources.
The requirements of resources to execute these simultaneous activities may exceed the available
resources
However, at some other period of the execution of the same project, there may be very few activities
which may require these resources,
This can be best known by plotting the resources usage profiles or histograms.

1 - 233
Illustrative Example:
Consider a network shown in figure below, having 14 activities. The
duration of each activity is marked under its activity arrow.

1 - 234
Table below shows the requirements of masons (marked by M) and laborer
(marked by L) for each activity.
Let us analyze the project from resources requirements point of view

1 - 235
1 - 236
 Figure below shows the time scaled version of the network, assuming early start times for
each activity.

 The activities along the critical path have been arranged along horizontal line.

 The dotted lines show the total float of each activity.

 The requirements of masons (M) and laborers (L) for each activity is marked under the
activity arrow.

 The table below the time scale shows total requirements of masons and laborers each day.

1 - 237
1 - 238
 Figures (a) and (b) show the variation in the requirements of masons and
laborers respectively, with time.
 These diagrams are known as resources usage profiles or histograms.

1 - 239
1 - 240
 If 13 masons are employed to meet the peak demand, they will sit idle during the non-peak periods.

 This will be highly uneconomical unless we employ them on temporary basis (only as per actual
requirements each day).

 However, skilled persons such as masons, foremen etc. are required to be employed on the permanent
basis.

 Therefore, the planning should be done in such a manner that resources are utilized in a more or less
uniform manner.

 This can be achieved by the following two approaches:

1 - 241
a) Resources, smoothing:

The total project duration is not changed, but some of the activities start times are
shifted by their available floats so that a uniform demand for the resources is
generated.

However, the resources are considered to be unlimited.

The start times of some of the activities are so shifted within their available floats
that uniform demand is created for the resources.

1 - 242
Illustrative Example:
We find that the peak requirements of masons are there 7 th and 8th day.
Also, the requirements of masons on 5th and 6th day are high.
 Also, the requirements of mason on 11th day and onwards are very low.
By inspection, we find that activity 5-9 has a total float of 7 days.

1 - 243
Hence the start time of activity 5-9 can be shifted by 7 days.
As a first trial therefore, let us shift activity 5-9 by 7 days, so that it starts
on 12th day ,instead of 5th day.
Figure below shows revised network, along with the modified resources
accumulation table.
From the figure, we find that the peak demand for masons has decreased from
13 (for 7th and 8th day) to 8 (for 7th and 8th day).

1 - 244
1 - 245
 In the second trial, we can shift activity 8-9 by its total
float period of 2 days.

 This will result in smoothing the labor requirements.

 From the figure below, we observe that the demand of

laborers has been decreased.

1 - 246
1 - 247
Figure below also show the corresponding histograms for the masons and
the laborer:

1 - 248
1 - 249
b) Resources leveling:

 The activity start times are so rescheduled that the peak demand for a
particular resource does not cross the available limit of the resources.

 Thus, the resources are considered to be limited.

 In rescheduling the activities, the floats are first used, but if it does not
give the desirable results, the total project duration may be changed.

1 - 250