PROJ ECT MANAGEMENT

Q. 2003 / 6(b) : Activities of a project are described below. Calculate the following
1.
2.
3.
4.

Total Time for completing the project

Critical Path
ES, EF, LS and LF times for all activities
Total Float and Free Float available for non-critical activities

ACTIVITY

ESTIMATED
DURATION
3
1
2
7
8
3
1
2

A
B
C
D
E
F
G
H

IMMEDIATE
PREDECESSORS
A
A, B
A, D
B
E, F
D

Answer
ACT
A
B
C
D
E
F
G
H
ES
EF
LF
LS
TF
FF

DUR
3
1
2
7
8
3
1
2
=
=
=
=
=
=
=
=
=

PRED
A
A, B
A, D
B
E, F
D

SUC.
B,C,E
C,F
E,H
G
G
-

ES
0
3
4
0
7
4
15
7

EF
3
4
6
7
15
7
16
9

LS
4
11
14
0
7
12
15
14

LF
7
12
16
7
15
15
16
16

TF
4
8
10
0
0
8
0
7

FF
0
0
0
0
0
8
0
0

Zero for activities without predecessors = EF of predecessors

Maximum/highest EF of predecessors
ES + Duration
Maximum / Highest of EF for activities without successors
LS of successors = Minimum / Least of LF for more than one successors
LF - Duration
LF-EF or LS-ES, where TF is zero those activities are critical activities
LF-ES-Duration
ES of successor EF of activity ( if there are more than one successor then
take the minimum of ES)

Total time taken for the project is 16 days and the critical path is D-E-G as the total
floats for these activities are zero.

A urobindo

Page 1 of 23

PROJ ECT MANAGEMENT

Q 2003/ 7(b)
The table below gives activities, their normal estimated durations and their
relationships for a small project. It also indicates the minimum possible durations if
crashed and extra cost incurred for such crashing. The management desires the
project to be completed in a shorter duration than normally expected, but the extra
funds available for this purpose is limited to Rs.500,000/- only. What would be the
shortest duration of the project after crashing under the budget limitations ?
ACTIVITY
A
B
C
D
E
F
G
H
I

IMMEDIATE
PREDECESSOR
A
B
A
C,D
C,D
E,F
G

DURATION
NORMAL
CRASH
5
3
5
1
10
5
7
2
6
2
11
5
6
4
5
1
4
1

COST (in Rs.000)

NORMAL
CRASH
400
600
300
500
400
700
400
600
300
500
600
930
300
600
200
400
200
500

Answer :
ACT

PRED.

SUCC

A
B
C
D
E
F
G
H
I

A
B
A
C,D
C,D
E,F
G

C,E
D
F,G
F,G
H
H
I
-

Cost Slope
(Cost / Duration)

DUR
N C
5 3
5 1
10 5
7 2
6 2
11 5
6 4
5 1
4 1

COST
N
C
400
600
300
500
400
700
400
600
300
500
600
930
300
600
200
400
200
500
3100 5330

ES

EF

LS

LF

TF

FF

0
0
5
5
5
15
15
26
21

5
5
15
12
11
26
21
31
25

0
3
5
8
20
15
21
26
27

5
8
15
15
26
26
27
31
31

0
3
0
3
15
0
6
0
6

0
0
0
3
15
0
0
0
0

Crash Cost Normal Cost

= -----------------------------Normal Dur. Crash Dur.

E
A

A urobindo

COST
SLOPE
100
50
60
40
50
55
150
50
100

TECH. SEQ.
P1 : AE H
P2 : ACFH
P3 : ACGI
P4 : BDFH
P5 : BDGI

ND
16
31
25
28
22

CD
6
14
13
9
8

Page 2 of 23

PROJ ECT MANAGEMENT

SR.NO.
0
1

CRASH
ACTIVITY
F&H&C

BY
DAYS
3

P1

P2

P3

P4

P5

16
13

31*
22

25
22

28
22

22
22

ACT.
COST
3100

CRASH
COST
495

The extra fund available to crash the project is limited upto Rs.500,000. Considering
the technological sequence the Normal Duration (ND) of Path P2 : ACFH is 31 days.
Hence, we take activities in this path for crashing first. In the path the cost slope of
activity A is 100, C is 60, F is 55 and H is 50. Considering 3 days crashing of each
activity F, H & C the crashing cost comes to 3 x (50+55+60) = Rs.495,000 which is
within the limitation of Rs.500,000.
Hence the project can be crashed by 9 days to finish in 22 days.

A urobindo

Page 3 of 23

PROJ ECT MANAGEMENT

Q. 2003 / 8(b)
The progress observed at the end of the seventh day from the beginning on a 12 day
duration project is a s given in the table. The actual cost incurred till date ie
reported to be Rs.3100.00
Draw a Gantt Chart for the project and find the project performance on the basis of
cost and schedule performance indices. (assume the activity costs are incurred
uniformly over its duration)
Activity

Immediate
Predecessor

Estimated
duration in
days

Budgeted
Cost of
activity

A
B
C
D
E
F
G
H
I
j

A
B
B
D
E
C
F
G

3
1
4
4
5
2
3
4
2
3

600
200
800
700
500
200
500
400
600
300

% of
Completion
at end of 7
days
100
100
75
100
95
80
50
0
0
0

Answer
Act.

Pred.

Dur.

Bud.
Cost

A
B
C
D
E
F
G
H
I
j

A
B
B
D
E
C
F
G

3
1
4
4
5
2
3
4
2
3

600
200
800
700
500
200
500
400
600
300
4800

% of
Completion at
end of 7 days
100
100
75
100
95
80
50
0
0
0

BCWP
600
200
600
700
475
160
250
0
0
0
2985

%
Scheduled
Completion
100
100
100
100
100
100
33.33
0
0
0

BCWS
600
200
800
700
500
200
167.7
0
0
0
3167.7

BCWS (Budgeted Cost of Work Scheduled)

= % Scheduled completion X Total Budgeted Cost = 3167.7
BCWP (Budgeted Cost of Work Performed )
= % Actual Completed X Total Budgeted Cost = 2985
ACWP ( Actual Cost of Work Performed)
= % Actual Completed X Actual Cost incurred till date of reporting
= 3100

A urobindo

Page 4 of 23

PROJ ECT MANAGEMENT

Gantt Chart
Act.

10

11

12

A
B
C
D
E
F
G
H
I
J
Date of reporting
Cost Performance Indices (CPI)
= BCWP/ACWP = 2985 / 3100 = 0.96
Schedule Performance Indices (SPI) = BCWP/BCWS = 2985 / 3167.7 = 0.94
Cost of Completion = Budgeted Cost / CPI = 4800 / 0.96 = 5000
Time of Completion = Scheduled Duration/SPI = 12/0.94 = 12.76 i.e. 13 days
Q. 2003 / 2(b)
Following data is available about actual sales for the past 14 years.
YR
Sales

1
2.3

2
2.2

3
2.0

4
2.25

5
2.60

6
3.0

7
3.5

8
4.1

9
3.8

10
4.0

11
4.3

12
4.2

13
4.8

14
5.2

Find the Forecast for the yr 15 using Two Years as well as three years moving
averages. Which of the two forecasts is more reliable on the basis of Mean Squared
Error (MSE) criterion ?
Q.2003 / 3(b)
Q. 2003 / 4 (b)

A urobindo

Page 5 of 23

PROJ ECT MANAGEMENT

Q.2002 / 4 (b) : DECISION TREE ANALYSIS
Motor City Auto.Co. must decided whether or not to introduce a new car, which
features a radically new pollution control system. They must also decide whether or
not first to see if results of test marketing a limited production show promise or not.
The test marketing of limited production will cost Rs.4.0 crores.
The marketing department has estimated that :
If the new car achieve high acceptance by the public, company profits will
increase by Rs.25 crores.
Low acceptance will reduce company profits by Rs.15 crores.
Not introducing the car will not affect the profit.
Probabilities for different outcomes through alternate actions are :
If test marketing is done, the possibility of high acceptance is 0.40
The assumed probability for a favourable result from test marketing is 0.50
The conditional probability for high acceptance after a favourable result is
0.64
If the car is introduced inspite of unfavourable test marketing results ,
probability for low acceptance is 0.84
Construct DECISION TREE and determine the optimal course of action.
HA (0.64)

Answer :

Introduce

C
2

D2

LA (0.36)

Not-Introduce

Favourable (0.5)
C1

Test

Un-favourable (0.5)

HA (0.16)

Introduce

C
3

D3

D1

LA (0.84)

Not-Introduce

NoTest

HA (0.40)

Introduce

C
4

D4

LA (0.60)

Not-Introduce

A urobindo

Page 6 of 23

PROJ ECT MANAGEMENT

Evaluation of Chance points :
C2 = (0.64 x 25) + (0.36 x 15) = +10.6, hence D2 = +10.6
C3 = (0.16 x 25) + (0.84 x 15) = - 8.6, hence D3 = 0
C4 = (0.40 x 25) + (0.60 x 15) = + 1.0, hence D4 = + 1.0
C1 = (0.50 x D2) + (0.50 x D3) = (0.50x10.6) +(0.50x 0) = +5.3
Hence D1 :

If decision for test marketing then

= Profit Test marketing cost = 5.3-4.0= Rs. 1.3 crore
If no test marketing the profit is Rs.1.0 crores

Hence the decision is to go for test marketing and then introduce the new car.
Q 2002 / 6 (b)
A new pharmaceutical product is to be released on a deadline for which 44 days are
left. Activities involved in product launch with their interdependencies and
probabilistic times for completion are given in the table. Draw a project network and
find the probability of completing the project in time.
Activity
A
B
C
D
E
F
G
H
I
J
K
L

Predecessor
A
A
B
D
C
D
G
C,G
I
H
J, K

Optimistic
6
1
16
3
2
7
1
1
2
2
1
1

Time Delays
Most Likely
10
2
20
5
3
10
2
3
2
3
1
2

Pessimistic
14
3
30
7
4
13
3
5
2
4
1
3

Extract from Z value table with some cumulative probabilities for normal
distribution curve is given.
Answer : Project estimation
Maximum Time or Pessimistic Time (tp)
Minimum Time or Optimistic Time (to)
Most Likely Time (tm)
Average Time (ta ) = (to + 4 tm + tp ) / 6 ------- Classical Formula

A urobindo

Page 7 of 23

PROJ ECT MANAGEMENT

Act.

Pred.

Succ.

Duration
ES EF LS LF
(to)
(tm)
(tp)
(ta )
A
B,C
6
10
14
10
0
10 10 10
B
A
D
1
2
3
2
10 12 26 28
C
A
F,I
16
20
30
21
10 31 10 31
D
B
E,G
3
5
7
5
12 17 28 33
E
D
2
3
4
3
17 20 38 41
F
C
7
10
13
10
31 41 31 41
G
D
H,I
1
2
3
2
17 19 33 35
H
G
K
1
3
5
3
19 22 35 38
I
C,G
J
2
2
2
2
31 33 36 38
J
I
2
3
4
3
33 36 38 41
K
H
L
1
1
1
1
22 23 38 39
L
J, K
1
2
3
2
36 38 39 41
Calculate average time considering the Classical formula and this is
for calculating ES,EF,LS & LF.

TF

Var

Var2

0
16
0
16
21
0
16
16
5
5
16
3
to be

1.33

1.77

2.33

5.43

1.0

1.0

considered

As highest EF is 41, the LF of all activities with no successors i.e last activities E,F,J &
L will be 41. Then the LS can be calculated.
ACF are critical activities as there is no float available. As the distribution would be a
normal distribution we have to calculate the variance of critical activities only.
Variance of critical activities = (tp - to ) / 6
________

(var)

_____
=

8.196 = 2.86

Is the standard deviation for the normal

distribution curve. I.e. = 2.86

= 41
+1 = 43.86
+2 = 46.72
+3 = 49.58

-3 -2 -1

+1

-1 =38.14
-2 = 35.28
-3 = 32.42

+2 +3

There is very remote chance that the project will go beyond +3 = 49.58 i.e. 50
days i.e. 99.9 % chance . The earliest time period during which the project can be
completed is 32 days i.e. -3 = 32.42 i.e. 0.001 % chance. To find out the
possibility that the project can be completed in 44 days :
Z = (Desired Duration- Minimum Duration)/ = (44-41)/2.86 = 1.049
Z value of 1.049 from the normal distribution table is 0.8531 and hence the
possibility of completing the project within 44 days is 85.31%.

A urobindo

Page 8 of 23

PROJ ECT MANAGEMENT

Q. 2002 / 7(b)
The table below defines activities within a small project :
Activity
Predecessor
Duration (days)
Normal
Crash
A
6
4
B
4
3
C
A
5
3
D
A
7
4
E
B
6
5
F
B
8
5
G
C,E
10
6
H
D,F
9
7

Cost (Rs.000)
Normal
Crash
24
34
12
22
20
28
29
47
26
34
34
52
27
47
34
48

The project attracts a penalty of Rs.10,00 per day for the project completion beyond
18 days. Draw the project network by PDM(AON) method and find out the number of
days delay intended beyond the stipulated date to minimize the total project cost.
Answer :
ACT

PRED.

SUCC

A
B
C
D
E
F
G
H

A
A
B
B
C, E
D, F

C,D
E,F
G
H
G
H
-

Precedence Diagram
( Activity on Node)

DUR
N C
5 4
4 3
5 3
7 4
6 5
8 5
10 6
9 7

COST
N
C
24
34
12
22
20
28
29
47
26
34
34
52
27
47
34
48
206

COST
SLOPE
5
10
4
6
8
6
5
7

ES

EF

LS

LF

TF

FF

0
0
6
6
4
4
11
13

6
4
11
13
10
12
21
22

0
1
7
6
6
5
12
13

6
5
12
13
12
13
22
22

0
1
1
0
2
1
1
0

0
0
0
0
1
1
0
0

Crash Cost Normal Cost

Cost Slope
= -----------------------------(Cost / Duration)
Normal Dur. Crash Dur.

C
A
D

E
B

TECH. SEQ.
P1 : A-C-G
P2 : A-D-H
P3 : B-E-G
P4 : B-F-H

ND
21
22
20
21

CD
13
15
14
15

A urobindo

Page 9 of 23

PROJ ECT MANAGEMENT

Penalty is Rs.10,00.00 per day beyond 18 days

SR.NO.

CRASH
ACTIVITY
A
H
G&H

0
1
2
3

BY
DAYS
1
1
1

P1

P2

21
20
20*
19

22*
21*
20*
19

P3
20
20
20*
19

P4

ACT.
COST
206
206+5
211+7
218+12

21
21*
20*
19

PENALTY
COST
40
30
20
10

TOTAL
COST
246
241
238
240

1st crashing : P2 (A-D-H) as this sequence takes maximum no. of days. Activity A is to be
crashed as this activity has the minimum slope amongst the three activities involved in this
sequence.
2nd Crashing : P2 & P4 as this sequence has the maximum no. of days after the first crashing.
Activity H is to be crashed as this activity has the minimum cost slope.
3rd crashing : All paths as all have equal no. of days. This is to test whether the total cost
increases or decreases after the previous crashing. Activity G & H are to be crashed as the
cost slopes are minimum in these cases.
As the total cost goes up in 3 rd crashing, it is advisable to adopt Sr.No.2. ie. Pay penalty for 2
days and complete the project in 20 days instead of 18 days.
Q.2002 / 8 (b)
The following information is available at the end of day 40 of a new plant erection project.
Determine if the project is under control based on Earned Value evaluation system, and if not,
what is the likely extent of cost and time over-runs at completion.
Activity

Predecessor

A
B
C
D
E
F

A
A
C
B,D
E

Duration
10
8
12
0
18
16

Total Budget
In Rs.000
300
400
350
0
405
450

Act. Cost till

date
250
450
380
0
400
-

Act.
%
of
completion
100
100
100
0
70
0

Answer :
Act.

Pred.

Dur.

A
B
C
D
E
F

A
A
C
B,D
E

10
8
12
0
18
16

Total
Budget
In Rs.000
300
400
350
0
405
450
1905

Act. Cost
till date

Act. % of
completion

EV=BCWP

% Sched.
Completion

250
450
380
0
400
1905

100
100
100
0
70
0

300
400
350
0
283.5
0
1333.5

100
100
100
0
100
0

BCWS
300
400
350
0
405
0
1455

ACWP ( Actual Cost of Work Performed)

= % Actual Completed X Actual Cost incurred till date of reporting

A urobindo

Page 10 of 23

PROJ ECT MANAGEMENT

= 1905 given in the problem
We have to calculate BCWP i.e. Earned value of the project and BCWS.
BCWP (Budgeted Cost of Work Performed )
= % Actual Completed X Total Budgeted Cost = 1333.5
BCWS (Budgeted Cost of Work Scheduled)
= % Scheduled completion X Total Budgeted Cost
0

10

10

10

18

22

10
12

18

22

22

40

40

56

16

22
0

From the above diagram it can be seen that at the end of 40 th day all activities upto
should be completed as per schedule. Hence, percentage of scheduled completion
will be 100 % for all activities upto E, although the actual % of completion of E is
only 70%.
Cost Performance Indices (CPI)
= BCWP/ACWP = 1335.5/1480 = 0.90
Schedule Performance Indices (SPI) = BCWP/BCWS = 1335.5/1455 = 0.92
Cost of Completion = Budgeted Cost / CPI = 1905 / 0.90 = 2116.7
Time of Completion = Scheduled Duration/SPI = 56/0.92 = 60.9 i.e. 61 days
Hence the cost over-run would be Rs.211,700.00 and the duration for completion
would be 61 days instead of 56 days.

A urobindo

Page 11 of 23

PROJ ECT MANAGEMENT

Q. 2001 / 6 (b)
Following table lists the various details of project activities
Activity
Predecessor
DURATION in WEEKS
(to)
(tm)
(tp)
A
1
1
7
B
1
4
7
C
2
2
8
D
A
1
1
1
E
B
2
5
14
F
C
2
5
8
G
D, E
3
6
15
1. Draw the project network using the AOA convention and identify all paths through
it.
2. Find expected average duration and variance for each activity.
3. What is the expected duration of the project with 50% chance of completion
4. What would be your level of confidence to accept the project deadline of 20
weeks
Note : A normal distribution curve covers 50.0%, 84.1% and 97.7% area to its left
for 0, +1 and +2 SD from the mean respectively.
Answer :
(i) Project Network Diagram using AOA convention

A(2)
1

D(1)

Critical Path : B-E-G = 17 weeks

B(4)
3

E(6)

G(7)
6

F(5)

C(3)

Other Paths are :

A-D-G : 10 days &
C-F = 8 weeks

4
(ii) Average Time (ta ) = (to + 4 tm + tp ) / 6

& Variance = (tp - to) / 6

Act.

ES

EF

LS

LF

TF

Var

0
0
0
2
4
3
10

2
4
3
3
10
8
17

7
0
9
9
4
12
10

9
4
12
10
10
17
17

7
0
9
7
0
9
0

1
1
1
0
2
1
2

A
B
C
D
E
F
G

Pred
.
A
B
C
D, E

A urobindo

DURATION
(to)
(tm)
1
1
1
4
2
2
1
1
2
5
2
5
3
6

in WEEKS
(tp)
(ta )
7
2
7
4
8
3
1
1
14
6
8
5
15
7

Var2

4
4

Page 12 of 23

PROJ ECT MANAGEMENT

(iii) As the distribution curve is normal curve, variance of only critical activities are
considered for calculating the standard deviation.
________

Standard Deviation

: = (var)

__

9 = 3.0

50 %

As per the distribution curve the expected

duration of the project with 50% chance
of completion is 17 days.

84.5 %

97.3 %

= 17
+1 = 20
+2 = 23

99.9 %

-3 -2 -1

+1

+2 +3

(iv) Project Deadline of 20 weeks means +1 as the distribution curve is a normal

curve and the standard deviation is 3. At +1 i.e. 20 days the distribution curve
covers 84.1% area to its left indicating that the level of confidence would be 84.1%.
Q. 2001/7(b)
Project Network using AOA Convention

A(9)
1

B(8)
C(15)

SR.NO.
0
1
2
3
4

CRASH
ACTIVITY
E
C
F

A urobindo

Critical Path :
P1 : B-E-F = 20 Days

D(5)
E(10)

F(2)
5

Other Paths are : P2-ADF & P3-CF

dummy(0)

BY
DAYS
4
1
1

P1
20*
16
16
15

Normal Duration : 20 days

Crash Duration : 12 days
Optimum duration cannot be found
out as overheads/day is not given

P2
16
16
16
15

P3
17
17*
16
15

Crash
Cost/day
15000
30000
40000

Cumm. Crash Cost

60000
90000
130000

Page 13 of 23

PROJ ECT MANAGEMENT

Q. 2001 / 8 (b)
Gantt Chart with monthly and cumulative cash flows

'S' Curve for the Cash Flows

800

Cum m ulative Costs

700
600
500
400
300
200
100

M
ay
-0
Ju 1
n01
Ju
l-0
A 1
ug
-0
Se 1
p0
O 1
ct
-0
No 1
v0
De 1
c0
Ja 1
n0
Fe 2
b0
M 2
ar
-0
A 2
pr
-0
M 2
ay
-0
Ju 2
n02
Ju
l-0
A 2
ug
-0
Se 2
p0
O 2
ct
-0
No 2
v0
De 2
c02

Tim e

The cost of a project rises gradually, then rises steeply and towards the completion
of the project slows down again, thus resembling the alphabet S.

A urobindo

Page 14 of 23

PROJ ECT MANAGEMENT

Q.2000/5(b) DECISION TREE ANALYSIS

Investible Surplus

= Rs. 100 crores

Investing this amount in existing business will given assured return of 8%.
Alternatively , the amount can be invested in diversification, which if:
1. successful will give estimated return of 17% and
2. unsuccessful will give estimated return of 2%.
In a decision tree analysis, Decision points are mutually exclusive and are
represented by a small box
, whereas chance points are represented as

8%
Existing business

D1
successful

17%

Diversification

C
1
unsuccessful

2%

Let a be the chance of success, then the chance of failure is (1-a)

Evaluation of Chance C-1 = (a x 17%) + (1-a) x 2%
Minimum of amount of risk to diversify would be that the evaluation of C1 equals
assured return of Investible surplus in old business i.e. 8%
Hence, 17a+2(1-a) = 8 which implies a= 0.4
Hence probability of success would be 0.4 and failure would be 0.6, in case the
Investible surplus is utilized in diversification.

A urobindo

Page 15 of 23

PROJ ECT MANAGEMENT

Q. 2000 / 7 (b) : Project Network on AOA Convention

8
B(5)
A(3)

K(2)

D(4)

G(5)

C(7)

H(8)

E(6)

L(4)

F(4)

Critical Path : A- C- E G H - L

Total Time taken for completion of Project is 33 days

Calculation of Total Floats and Free Floats
ACT.
A
B
C
D
E
F
G
H
K
L

PRED.
A
A
B
C
C
D,E
G, F
G
H, K

SUCC.
B,C
D
E,F
G
G
H
H,K
L
L
-

DUR
3
5
7
4
6
4
5
8
2
4

ES
0
3
3
8
10
10
16
21
21
29

EF
3
8
10
12
16
14
21
29
23
33

LS
0
7
3
12
10
17
16
21
27
29

LF
3
12
10
16
16
21
21
29
29
33

21

21

TF
0
4
0
4
0
7
0
0
6
0

FF
0
0
0
4
0
7
0
0
6
0

Project Network on AON Convention

0

12

D
5

10

16

10

16

ES

EF

23

12

16

21

27

29
29

E
7

12

16

L
6

10

33
4

10

16

10

14

29
21

33

29

TF

H
4

FF

DUR

LS

LF

A urobindo

17

21

21

29

Page 16 of 23

PROJ ECT MANAGEMENT

Q.2000/8 (b)
BCWS (Budgeted Cost of Work Scheduled)
= % Scheduled completion X Total Budgeted Cost
BCWP (Budgeted Cost of Work Performed )
= % Actual Completed X Total Budgeted Cost
ACWP ( Actual Cost of Work Performed)
= % Actual Completed X Actual Cost incurred till date of reporting
Activity

1
2
3
4
5
6
7
8
9
10
TOTAL
1.
2.
3.
4.
5.
6.
7.

% Completion
Scheduled Actual
(A)
(B)
100
100
100
100
70
60
55
50
30
25
10
0
0
0
0
0
0
0
0
0

BCWS
BCWP
Cost Variance
CPI
SPI
Cost of Completion
Time of Completion

=
=
=
=
=
=
=

Cost in Rs. Lakhs

Budgeted Actual
(C )
(D)
10.0
12.0
12.0
12.5
18.0
12.0
25.0
13.0
20.0
6.0
15.0
0
10.0
0
8.5
0
6.5
0
5.0
0
130.0
55.5

BCWS

BCWP

(AXC)
10
12
12.6
13.75
6
1.5
0
0
0
0
55.85

(BXD)
10
12
10.8
12.5
5
0
0
0
0
0
50.3

Cost
Variance
0
0
-1.8
-1.25
-1
-1.5
0
0
0
0
-5.55

Rs.55.85 lakhs
Rs.50.3 lakhs
BCWP-ACWP = 50.3 55.5 = -5.20
BCWP/ACWP = 50.3/ 55.5 = 0.91
BCWP/BCWS = 50.3/ 55.85 = 0.90
Budgeted Cost / CPI = 130/0.91 = Rs.142.86 lakhs
Sch. Duration/SPI = 35/0.90 = 38.89 i.e. 39 weeks.

Hence the project is likely to be completed in 39 weeks instead of the scheduled

35 weeks and the project cost is likely to escalated upto Rs.142.86 lakhs.

A urobindo

Page 17 of 23

PROJ ECT MANAGEMENT

Q. 1999/6(b)

(7)

(14)

(11)

(4)

(5)

(7)

(6)

(18)
6

(11)

The longest path is the critical path

i.e. (1-2) (2-3) (3-5) (5-8) = 36 days
Average Time (ta ) = (to + 4 tm + tp ) / 6

& Variance = (tp - to) / 6

Act

Var

Var2

2
2
4
1
2
2
4
1
4

4
4
16
1
4
4
16
1
16

1-2
1-6
2-3
2-4
3-5
4-5
6-7
5-8
7-8

DURATION
(to)
(tm)
3
6
2
5
6
12
2
5
5
11
3
6
3
9
1
4
4
19

in WEEKS
(tp)
(ta )
15
7
14
6
30
14
8
5
17
11
15
7
27
11
7
4
28
18

As the distribution curve is normal curve, variance of only critical activities are
considered for calculating the standard deviation.
________
__
Standard Deviation

: = (var)2

25 = 5.0

50 %
84.1 %

97.3 %

A standard deviation of +1.0 to the mean

value under Normal Distribution Curve
covers 84.1% area to its left
i.e. +1 = 41, where = 36 & = 5

99.9 %

-3 -2 -1

+1

+2 +3

Hence the expected time for completion of project with 84.1 % probability is 41
days.

A urobindo

Page 18 of 23

PROJ ECT MANAGEMENT

Q.1999/ 7 (b)
ACT. PRED DUR SUCC ES EF LS LF
A
8
C
0
8 2 10
B
7 D,E,F 0 7 0 7
C
A
6
G
8 14 10 16
D
B
8
G
7 15 8 16
E
B
4
H
7 11 11 15
F
B
8
I
7 15 7 15
G
C,D
5
J
15 20 16 21
H
E
6
J
11 17 15 21
I
F
6
J
15 21 15 21
J
G,H,I 10
21 31 21 31

TF
2
0
2
1
4
0
1
4
0
0

RES.
4
8
5
4
8
6
5
4
5
6

Gantt Chart

Resource Graph
If the resources are limited to
20 workers then the days of
over allocation of resources
are on the 8th day , 9th day ,
10th day and 11th day.

25
R 20
E
S
15
O
U
R 10
C
E 5
S

31

28

25

22

19

16

13

10

0
TIME

Q.1999/ 8 (b)

A urobindo

Page 19 of 23

PROJ ECT MANAGEMENT

Total Project Budget

Scheduled Completion
Date of Reporting
BCWP
ACWP
BCWS
Cost Variance
CPI
SPI
Cost of Completion
Time of Completion

=
=
=
=
=

Rs.250.00 Crores
80 weeks
End of 50 weeks
Rs.170.00 Crores
Rs.180.00 Crores
Rs. 187.00 Crores
BCWP-ACWP = 170 180 = - 10 Crores
BCWP/ACWP = 170/180 = 0.94
BCWP/BCWS = 170/187 = 0.91
Budgeted Cost / CPI = 250/0.94 = Rs.265.96 Crores
Sch. Duration/SPI = 80/0.91 = 87.91 i.e. 88 weeks.

Till the date of reporting the actual cost of work performed has exceeded the
Budgeted by Rs.10 Crores. The cost of completion would exceed the budgeted cost of
completion by Rs.15.96 crores and the time of completion would exceed the
scheduled completion period of 80 weeks by 8 weeks.
Notes :
Network Relationships : Start to Start (SS)
Finish to Start (FS)
Finish to Finish (FF)
Start to Finish (SF)
SS : Start of the successor depends upon the start of the predecessor
FS : Start of the successor depends upon the Finish of the predecessor
FF : Finish of the successor depends upon the Finish of the predecessor
SF : Finish of the successor depends upon the start of the predecessor
In SS relationship, there can be a lag i.e. SS+Lag meaning the successor starts 3
days after the start of the predecessor activity. It can also be represented as % i.e
SS+20% meaning the successor starts after 20% of the predecessor activity is
completed.
0

10

SS + 3
5

10

In FS Relationship, there can be lag or a lead,

0

10

LAG

13

18

10

FS + 3
10

LEAD

12

FS - 3
5

10

Q. 1998 / 6(b)

A urobindo

Page 20 of 23

PROJ ECT MANAGEMENT

ACTIVITY
A
B
C
D
E
F

DURATION
5
3
4
7
5
3

G
H

2
6

I
J
K

3
4
2

5
A

FS-2

PREDECESSOR
A
A
C
C
B
D
E
F
G
G
H
I

RELATIONSHIP
FS
FS
SS
FF
FS
FS
FS
FS
FS
FS
SS
FS

FF

14

FS

11

FS

12

17
H

14

14

23

SS+4

+1

21

17

25

17

LEAD/LAG
-2
+3
+4
-1
-2
+4
-

23

21

25

FS-1

12
C

15

FS+3

FF+1

FS-2

SS

12

15

11

16

16

E
FF+4

18

G
5

12

18

17

17

24

I
2

FS

21

19

K
3

FS

21

26

24

FS

24

26

Critical Path : A C D F H J K

Q.1998/7(b)

A urobindo

Page 21 of 23

PROJ ECT MANAGEMENT

ACTIVITY
1-2
2-4
1-3
3-4
4-7
3-5
4-6
6-7
7-9
5-9

NORMAL DUR.
5
6
4
7
9
12
10
7
6
12

CRASH DUR.
2
3
2
4
5
3
6
4
4
7

NORMAL COST
600
700
100
400
600
1600
1500
400
300
400

CRASH COST
900
1000
200
800
920
1960
1800
490
420
850

Draw network diagram and find Critical Path. In case the project duration is required
to be crashed by two days, which activities will get crashed.
(5)
1

(6)
2

(9)
4
(10)

(7)

(4)

7
(6)

(7)
6

5
(12)

9
(12)

ACT.
PRED
SUCC
ND
CD
ES
EF
1-2
2-4
5
2
0
5
2-4
1-2
4-7,4-6
6
3
5
11
1-3
3-4,3-5
4
2
0
4
3-4
1-3
4-7,4-6
7
4
4
11
4-7
2-4,3-4
7-9
9
5
11
20
3-5
1-3
5-9
12
3
4
16
4-6
2-4,3-4
6-7
10
6
11
21
6-7
4-6
7-9
7
4
21
28
7-9
4-7,6-7
6
4
28
34
5-9
3-5
12
7
16
28
There are two critical paths in the problem
CP 1 : (1-2-4-6-7-9) and CP 2 : (1-3-4-6-7-9) and
Other Paths are P3 (1-2-4-7-9) = 26 days and P4

LS
0
5
0
4
19
10
11
21
28
22

LF
5
11
4
11
28
22
21
28
34
34

TF
0
0
0
0
8
6
0
0
0
6

NC
600
700
100
400
600
1600
1500
400
300
400

CC
900
1000
200
800
920
1960
1800
490
420
850

Project Duration is 34 days

(1-3-5-9) = 28 days

Crash Cost Normal Cost

Cost Slope
= -----------------------------(Cost / Duration)
Normal Dur. Crash Dur.

In case the project is to be crashed by

two days, then it is advisable to crash that activity in the critical path which has the
minimum cost slope. Ie. Activity 6-7 has a cost slope of 30 and by crashing this
activity by two days the increase in cost would be 60.
Q.1998/8(b)

A urobindo

Page 22 of 23

slope
100
100
50
133
80
40
75
30
60
90

PROJ ECT MANAGEMENT

The peak requirement of resources are on the Day 7 where the resource required is
12.

A urobindo

Page 23 of 23