Network Planning Methods

Example PERT & CPM

3-1

Terms Used in Project Management

Activity : A certain amount of work or task required in the
project
Activity duration: In CPM the best estimate of time to
complete an activity . In PERT the expected time or
average time to complete an activity
Critical activity : An activity that has no room for schedule
slippages : if it slips the entire the entire project completion
will slip. An activity with zero slack
3-2

 Critical path: The chain of critical activities for the project

.The longest path through the network
Dummy activity :An activity that consumes no time but
shows precedence among activities
Earliest finish (EF): The earliest that an activity can finish
from the beginning of the project
Earliest start ( ES): The earliest that an activity can start
from the beginning of the project

3-3

 Event :A beginning , a completion point ,or a

milestone accomplishment within the project . An
activity begins and ends with events
Latest finish (LF) : The latest that an activity can finish
from the beginning of the project
Latest start (LS) :The latest that an activity can start from
the beginning of the project
Most likely time ( t m) : The time for completing the
activity that is is the consensus best estimate, used in
PERT
3-4

 Optimistic Time (to): The time for completing an activity if

all goes well : used in PERT
Pessimistic Time (tp): The time for completing an activity
if bad luck is encountered : used in PERT
Predecessor activity : An activity that must occur before
another activity .
Slack : The amount of time that an activity or group of
activities can slip without causing a delay in the
completion of the project
Successor activity : An activity that must occur after
another activity
3-5

Conventions used in drawing network diagrams

(Arrows & Circles )
Activity on Arrow (AOA) : The activities are denoted by
Arrows and events are denoted by circles
Activity on Node(AON) : Activities are denoted by
circles(or nodes) and the precedence relation ships
between activities are indicated by arrows

3-6

AOA Project Network for House

Lay
foundation
3

Design house
and obtain
financing

3
2

Dummy
0

1
Order and
receive
materials

4
Select
paint

Build
house

3
1

Finish
work

Select
carpet

AON Project Network for House

Lay foundations

Build house

4
3

2
2
Start

Finish work

7
1

1
3
Design house
and obtain
financing

3
1
Order and receive
materials
3-7

5
1
Select paint

6
1
Select carpet

Situations in network diagram

B

A must finish before either B or C can start

C

A
C

both A and B must finish before C can start

B
A

both A and C must finish before either of

B or D can start

A must finish before B can start

Dummy

both A and C must finish before D can start

C
D

3-8

Forward Pass
Earliest Start Time (ES)
earliest time an activity can start
ES = maximum EF of immediate predecessors
Earliest finish time (EF)
earliest time an activity can finish
earliest start time plus activity time

EF= ES + t

Backward Pass
Latest Start Time (LS)

Latest time an activity can start without delaying critical

path time
LS= LF - t
Latest finish time (LF)
latest time an activity can be completed without delaying
critical path time
LS = minimum LS of immediate
predecessors
3-9

CPM analysis
Draw the CPM network
Analyze the paths through the network
Determine the float for each activity
Compute the activitys float
float = LS - ES = LF - EF
Float is the maximum amount of time that this activity can be delay
in its completion before it becomes a critical activity, i.e., delays
completion of the project
Find the critical path is that the sequence of activities and events where
there is no slack i.e.. Zero slack
Longest path through a network
Find the project duration is minimum project completion time

3-10

PERT / CPM
Network planning methods that generate:
Relationship between activities
Project duration
Critical path
Slack for non critical activities
Crashing (cost / time trade-offs)
Resource usage

3-11

St. Pauls Hospital

Activity
A
B
C
D
E
F
G
H
I
J
K

Immediate
Predecessor(s)

Description

Select administrative and medical staff.

Select site and do site survey.
Select equipment.
Prepare final construction plans and layout.
Bring utilities to the site.
Interview applicants and fill positions in nursing,
support staff, maintenance, and security.
Purchase and take delivery of equipment.
Construct the hospital.
Develop an information system.
Install the equipment.
Train nurses and support staff.
3-12

A
B
B
A
C
D
A
E,G,H
F,I,J

St. Pauls Hospital

Immediate
Predecessor(s)

Activity AON Network

Description
I
A
B
C
D
E
F
G
H
I
J
K

Select administrative and medical staff.

Select site and do site survey.
A
F
K
Select equipment.
Prepare final construction plans and layout.
Bring utilities to the site.
Start
Finish
C and fill positions
G
Interview
applicants
in nursing,
support staff, maintenance, and security.
Purchase and take delivery of equipment.
D
H
J
ConstructBthe hospital.
Develop an information system.
Install the equipment.
Train nurses and support
staff.
E
3-13

A
B
B
A
C
D
A
E,G,H
F,I,J

St. Pauls Hospital

Immediate
Predecessor(s)

Completion Time
I
Activity
Description
15
A
B
C
D
E
F
G
H
I
J
K

Select administrative and medical staff.

A do site survey.
F
K
Select site and
12
10
9
Select equipment.
Prepare final construction plans and layout.
C
G
BringStart
utilities to the site.
Finish
10
35
Interview applicants and fill positions in nursing,
support staff, maintenance, and security.
B
D
H
J
Purchase and
take
delivery
of
equipment.
9
10
40
4
Construct the hospital.
Develop an information system.
E
Install the equipment. 24
Train nurses and support staff.
3-14

A
B
B
A
C
D
A
E,G,H
F,I,J

Path

St. Pauls Hospital

Expected Time (wks)

A-I-K
36
A-F-K
31 Critical
Immediate
Completion Time
A-C-G-J-K
70 Path
I
Activity
Description
Predecessor(s)
B-D-H-J-K
72
15
B-E-J-K
46
A
Select administrative and medical
staff.
B
Select site

A and do Fsite survey.

K
9
C
Select 12
equipment.10
A
D
Prepare final construction plans and layout.
B
E
Bring utilities to the
site. G
B
C
Start
Finish
F
Interview
applicants
positions in nursing,
10 and fill 35
support staff, maintenance, and security.
A
G
Purchase
C
B and takeDdelivery of
H equipment.
J
9 the hospital.
10
40
4
H
Construct
D
I
Develop an information system.
A
J
Install the equipment.
E,G,H
E
K
Train nurses and 24
support staff.
F,I,J
3-15

Critical Path
The longest path in the network
Defines the shortest time project can be completed
Critical path activity delay
project delay

3-16

Earliest Start and Earliest Finish

Begin at starting event and work forward
ES is earliest start
ES = 0 for starting activities
ES = Maximum EF of all
predecessors for
non-starting activities

ES

Activity
Name

EF

EF is earliest finish
EF = ES + Activity time

LS

3-17

Activity
Duration

LF

Earliest Start / Earliest Finish

I
15
A

12

10

10

35

10

40

Start

E
24
3-18

Finish

Earliest Start / Earliest Finish

12 I 27

Earliest start time

Start

Earliest finish time

15

0 A 12

12 F 22

63 K 72

12

10

12 C 22

22 G 57

10

35

0 B 9

9 D 19

19 H 59

59 J 63

10

40

Critical
path

9 E 33

24
3-19

Finish

Latest Start and Latest Finish

Begin at ending event and work backward
LF is latest finish
LF = Maximum EF for
ending activities
LF = Minimum LS of all
successors for
non-ending activities

LS is latest start

ES

LS

LS = LF Activity time

3-20

Activity
Name

Activity
Duration

EF

LF

Latest Start / Latest Finish

Latest start time
0
2

Start

A 12
12

14

Critical
path
0
0

B 9
9

12 I 27
48
63

15

Latest finish time

12 F 22
53
63

63 K 72
63
72

10

12 C 22
14
24

22 G 57
24
59

9 D 19
9
19

19 H 59
19
59

10

Finish

35

40

10

9 E 33
35
59

24

3-21

59 J 63
59
63

What do you
notice about
ES/LS & EF/LF?

What do you notice about ES/LS & EF/LF?

For Activity A
ES = 0
LS = 2
Meaning: Due to some reason of if activity A is not started
at 0 weeks but 1, 2 or 3 weeks, even then completion of
project is not delayed
For Activity B
ES = 0
LS = 0
Meaning
Any delay in start would delay project completion.

3-22

Activity Slack Analysis

Slack
= LS
ES
Latest
start
time
or A
0
2

12
14

Slack = LF12 EF

12 I 27
48
63

15

Latest finish time

12 F 22
53
63

63 K 72
63
72

10

12 C 22
14
24

22 G 57
24
59

9 D 19
9
19

19 H 59
19
59

Start
Slack
63 = 010
K = 63Critical

Finish

35

path

or
0
0

B 9

SlackK = 72 9 972 = 010

40

9 E 33
35
59

24

3-23

59 J 63
59
63

Activity Slack Analysis

LS

12 I 27
48Slack
63

0
2
A012 0
1214 14
129
9
9 35
12 53
22 24
Critical
19 19
path
12 48
B 9 59
59
63 9 63

2
0
12 F 22
53 2 63
10
0
26
41
12 C 22
14 2 24
10
0
36
0 19
9 D
9 0 19

Node Duration ES
Latest
start time
A
B
C
D
E
F
Start
G
H
I
J
K

12
9
10
10
24
10
35
40
15
4
6

0
2

0
0

15

Latest finish time

63 K 72
63
72

22 G 57
24
59

Finish

35

19 H 59
19
59

40

10

59 J 63
59
63

Activity slack = maximum delay time

9 E 33
35
59

Critical
24 path activities have zero slack
3-24

Activity Slack
How much would we like to reduce
the time for activity B?

Start

B 25

5 20 25

25
35
25 10 35

0
5
0 5 5

5
20
10 15 25

3-25

Finish

PERT
PERT is based on the assumption that an activitys duration follows a
probability distribution instead of being a single value
Three time estimates are required to compute the parameters of an
activitys duration distribution:
pessimistic time (tp ) - the time the activity would take if things did
not go well
most likely time (tm ) - the consensus best estimate of the activitys
duration
optimistic time (to ) - the time the activity would take if things did go
well

Mean (expected time):

te =

tp + 4 tm + to
6
2

Variance: Vt
3-26

=2

tp - to
6

PERT analysis
Draw the network.
Analyze the paths through the network and find the critical path.
The length of the critical path is the mean of the project duration
probability distribution which is assumed to be normal
The standard deviation of the project duration probability distribution is
computed by adding the variances of the critical activities (all of the
activities that make up the critical path) and taking the square root of that
sum
Probability computations can now be made using the normal distribution
table.

3-27

Probability computation
Determine probability that project is completed within specified
time
x-
Z=

where = tp = project mean time

= project standard mean time
x = (proposed ) specified time

3-28

Normal Distribution of Project Time

Probability

= tp
3-29

Time

PERT Example
Immed. Optimistic Most Likely Pessimistic
Activity Predec. Time (Hr.) Time (Hr.) Time (Hr.)
A
-4
6
8
B
-1
4.5
5
C
A
3
3
3
D
A
4
5
6
E
A
0.5
1
1.5
F
B,C
3
4
5
G
B,C
1
1.5
5
H
E,F
5
6
7
I
E,F
2
5
8
J
D,H
2.5
2.75
4.5
K
G,I
3
5
7
3-30

PERT Example

PERT Network
D

C
B

I
F
G

3-31

PERT Example
Activity

Expected Time

A
B
C
D
E
F
G
H
I
J
K

6
4
3
5
1
4
2
6
5
3
5

3-32

Variance
4/9
4/9
0
1/9
1/36
1/9
4/9
1/9
1
1/9
4/9

PERT Example
Activity ES
A
B

0
0

F
G
H
I
J
K

6
6 11
6
9
9
13
13
19
18

C
D
E

EF

LS
6
4
9
15
7
13
11
19
18
22
23

3-33

LF
0
5
6
20
12
9
16
14
13
20
18

Slack
6
9
9
9
13
13
18
20
18
23
23

0 *critical
5
0*
6
0*
7
1
0*
1
0*

PERT Example
Vpath = VA + VC + VF + VI + VK
= 4/9 + 0 + 1/9 + 1 + 4/9
= 2
path = 1.414
z = (24 - 23)/(24-23)/1.414 = .71
From the Standard Normal Distribution table:
P(z < .71) = .5 + .2612 = .7612

3-34

PROJECT COST

3-35

Cost consideration in project

Project managers may have the option or requirement to crash the project,
or accelerate the completion of the project.
This is accomplished by reducing the length of the critical path(s).
The length of the critical path is reduced by reducing the duration of the
activities on the critical path.
If each activity requires the expenditure of an amount of money to reduce
its duration by one unit of time, then the project manager selects the least
cost critical activity, reduces it by one time unit, and traces that change
through the remainder of the network.
When there is more than one critical path, each of the critical paths must
be reduced.
If the length of the project needs to be reduced further, the process is
repeated.
3-36

Project Crashing
Crashing
reducing project time by expending additional resources

Reduction in activity duration by any change in its

resources, resource use, method or material is
referred to as crashing of the activity
Crash time
an amount of time an activity is reduced
Crash cost
cost of reducing activity time
Goal
reduce project duration at minimum cost

3-37

Activity crashing

Crash
cost

Crashing
activity

Slope = crash cost per unit

time
Normal Activity

Normal
cost

Normal
time

Crash
time

Activity time
3-38

Time-Cost Relationship

Crashing costs increase as project duration decreases

Indirect costs increase as project duration increases
Reduce project length as long as crashing costs are less than
indirect costs

Time-Cost Tradeoff
Min total cost
= optimal
project time

Total project cost

Indirect
cost

Direct
cost
time
3-39

Project Crashing example

2
8

1
2

7
4

1
1
2

3
4

5
4

3-40

6
4

Time Cost data

Activity

Normal
time

Normal
cost Rs

Crash
time

Crash
cost Rs

Allowable
crash time

slope

1
2
3
4
5
6
7

12
8
4
12
4
4
4

3000
2000
4000
50000
500
500
1500

7
5
3
9
1
1
3

2800
3500
6000
71000
1100
1100
21000

5
3
1
3
3
3
1

400
700
2000
8000
1100
1100
7000

75000

3-41

Project duration = 36

2
8

12

From..

7
4

1
12

3
4

6
4

5
4

2
8

To..

12

7
4

1
7

Project
duration = 31
Additional cost
= R2000

R400

3
4

3-42

5
4

6
4

GANTT CHART

3-43

Gantt Chart
Gantt Chart was developed by
Henry Laurence Gantt (1861-1919) was a
mechanical engineer and management consultant
who is most famous for developing the Gantt
chart in the 1910s. These Gantt charts were
employed on major infrastructure projects
including the Hoover Dam and Interstate highway
system. He refined production control and cost
control techniques.
3-44

Example of Gantt Chart

0

Month
4
|

Activity
Design house
and obtain
financing
Lay
foundation

Order and
receive
materials
Build house
Select paint
Select carpet
Finish work

Month
3-45

10

Gantt Chart
Activities in Buy a House
`

BUY A HOUSE

LOCATION

FINANCING

FIND
HOUSE

- Criteria

- Determine
affordability

- Type of
House

- Visit
Locations

- Determine
mortgage
provider

- Find Real
Estate
Agent

- Lockup
mortgage
commitment

- Look for
House

- Make
Offer, P&S
Agreem't

10

3-46

- Closing

TASK
1-criteria
2-visit loc.
3-affordability
4-mortgage co
5-mortg lock
6-type of hse
7-real est agent
8-look for hse
9-offer, P&S
10-closing

PREDECESSOR
3
1
3
4
1
2, 6
7
5, 8
9