Unit -4 (Project Design and Network Analysis)

 Introduction

 Importance of Network Analysis

 Network Techniques

Project Management

It is the complete set of tasks; technique tool applied during project execution, Project mgmt. includes planning,
scheduling and controlling of activities.

Need for Project Management

 A project requires huge investment which it should not go waste.

 A loss in any project would have direct or indirect impact on the society.
 It prevents failure in project.
 Change in economic conditions may affect a project.
 Technology used may change during the course of project execution.

Network Analysis

A network diagram is a model that uses small circles (nodes) connected by lines or branches to represent
precedence relationship. Networks are frequently used to show the precedence relationship among the activities.
CPM & PERT are network technique for analysing a system in term of activities and events that must be
completed in a specific sequence in order to achieve a goal.

Objective of Network Analysis / Importance of networking analysis

 Helpful in planning- network analysis is powerful tool for planning, scheduling & controlling.
 Inter-relationship of various activities – it creates inter-relationship and inter-dependence of various
activities of project or a programme.
 Cost control- in certain cases we can measure cost of delay in the completion of the project.
 Minimization of maintenance time- it helps the management to minimize the total maintenance time.
 Reduction of time- time can also be reduced using networking analysis.
 Control on ideal resources.
 Avoiding delays, interruption- it develop discipline and systematic approach in planning scheduling etc.
Term used in Networking Analysis
  Activity: an effort that is required to complete a part of a project. It is denoted by 
 Processor activity: an activity that must occur before another activity.
 Successor activity: an activity that must occur after another activity.
 Dummy activity: an activity that ensure no time but shows precedence between events.
 Activity duration: in CPM, the best estimate of the time to complete an activity. In PERT, the expected
time or average time to complete activity.
 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 everything goes wrong used in PERT.
 Most likely time (tm): the time for completing an activity that is the consensus best estimates used, in
PERT.
 Expected time (te): the average time for completing an activity.
 Earliest Start time (EST): the earliest that an activity can start, from the beginning of the project.
 Earliest Finish time (EFT):the earliest that an activity can finish, from the beginning of the project
(EFT = EST +time)
 Latest Start time (LST): the latest that an activity can start, from the beginning of the project, without
causing a delay in the completion of the project. (LST = LFT- time).
 Latest Finish time (LFT): the latest that an activity can finish, from the beginning of the project,
without causing a delay in the completion of the project.
 Slack: the amount of time that an activity or group of activity can slip without causing a delay in the
completion of the project. It is also known as “float”.
 Critical activity: an activity that has no room for schedule slippage, if I slip the entire project
completion will slip. An activity with zero slack.
 Critical path: the chain of critical activity for the project. The longest path through the network.
 Event: a beginning, completion point or milestone accomplishment within the project. An activity
begins and ends with an event. It is denoted by circle 
 Total float: it is for activity is time difference between the maximum time available to perform the
activity and duration. (TF= EFT-LFT)
 Free float: It is that time by which an activity can be rescheduled without affecting the succeeding
activity (FF= TF- head slack).
 Independent time: the time by which an activity can be rescheduled with affecting both preceding and
succeeding activities is known as independent activity. (IF=FF – tail slack).

Program Evaluation and Review Technique (PERT)

A networking approach to planning, monitoring, controlling and evaluation of complex projects.

Critical Path (CPM)

A quantitative technique which is used for planning and coordinating large projects.

Difference between PERT and CPM

 PERT CPM
1) It is basically a probabilistic network. It is basically deterministic network
2) It is build-up of event-oriented diagram It is build-up of activities oriented diagram
3) Used for R & D project Used for repetitive work
4) PERT requires three time estimates for each The activity time estimates are deterministic and
activity may be determined by fairly based on previous
experience.
5) It makes use of dummy activities to represent It doesn’t make use of dummy activities
the proper sequencing of the activities
6) It has nothing to do with cost of project It deals with cost of a project schedules and their
minimisation
7) It doesn’t deal with concept of crashing It deals with concept of crashing
8) Time is average No averaging of time is involved
9) The origin is military (navel) The origin id industrial
10) It lays emphasis on reduction of the executive It laid emphasis on the reduction in completion time
time of project without too much cost with the least increases in project cost. It is cost
implication. It is time based based.

Limitation of PERT

 The basic difference comes in the way of time estimates for the completion of activities because
activities are of non – repetitive.
 This technique does not consider recourses required at various stages of the project.
 Use of these techniques for active control of a project requires frequent updating and receiving the
PERT calculations and this proves quite a costly affairs.

Limitation of CPM

 CPM fails to incorporate statistical analysis in determining the time estimates

 It operates on the assumption that there is a precise known time that each activity in the project will take
but this may not be true in actual life.
 It is difficult to use CPM as a controlling device for the simple reason that one must repeat the entire
evaluation for the reason that one must repeat the entire evaluation of the project each time when
changes are introduced into the network. It may be remembered that CPM was initially developed as a
static planning as a static planning model and not as a dynamic controlling devices.

Crashing of Network

Crashing is employed to reduce the project completion time by spending extra resource cost. However, beyond
point a cost increase more quickly when time is reduced. Similarly, beyond point B, the time increase whiles the
cost decrease. Since for technical reasons, time may not be reduced in definitely point. Therefore we call this
limit crash point. There is also a most cost efficient duration called normal point.

Thus extending the activity duration beyond normal point may increase costs. It is clear that, one must be
interested in the critical region of the curve contained between point A and B to establish a trade off between
time and cost, the direct cost of completing an activity per unit time is completed as follows:
Cost slope = crash cost – normal cost / normal time – crash time.

Numerical of networking analysis

Total float – The amount of time by which completion of an activity could be delayed. It can be calculated as
LST –EST

Free float – The time by which the completion of an activity can be delayed beyond the earliest finish time. It
can be calculated as Total float – Head slack

Independent float – The amount of time by which the start of an activity can be delayed. It can be calculated as
Free float – Tail slack

Independent float < Free float < Total float

Slack vs Float – The basic difference between slack and float times is that slack is used for events only whereas
float is applied for activities.

Type A (Event and One Time is given)

Draw Network diagram, Find Critical Path. Find EST, EFT, LFE, LST, Total Float, Free Float and Independent
Float from the following.

Event: 1-2 1-3 2-5 2-3 2-4 3-4 4-6 5-6

Time: 2 3 4 3 5 2 1 3

Solution. Critical Path is 1-2-5-6 = 2+4+3 = 9

Event Time EST EFT LFT LST TF FF IF

1-2 2 0 2 2 0 0 0-0=0 0-0=0
1-3 3 0 4 6 3 3 3-1=2 2-0=2
2-5 4 2 6 6 2 0 0-0=0 0-0=0
2-3 3 2 5 6 3 1 1-1=0 0-0=0
2-4 5 2 7 8 3 1 1-1=0 0-0=0
 3-4 2 5 7 8 6 1 1-1=0 0-1=-1
4-6 1 7 8 9 8 1 1-0=1 1-1=0
5-6 3 6 9 9 6 0 0-0=0 0-0=0
EFT =EST + Time

LST =LFT –Time

Total Float = LST – EST

Free Float = Total Float – Head slack

Independent Float = Free Float – Tail slack

Type B (Activity and one Time is given)

Network diagram, Critical Path. Find EST, EFT, LFE, LST, Total Float, Free Float and Independent Float.

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

Processor activity : - - A A B,C B,C F F D,G E,H,I

Time : 15 15 3 5 12 8 1 14 3 14

Solution. Critical Path is 1-2-3-4-6-7 = 15+3+8+14+14 =54

Activity Time EST EFT LFT LST TF FF IF

A(1-2) 15 0 15 15 0 0 0-0=0 0-0=0
B(1-3) 15 0 15 18 3 3 3-0=3 3-0=3
C(2-3) 3 15 18 18 15 0 0-0=0 0-0=0
D(2-5) 5 15 20 37 32 17 17-10=7 7-0=7
E(3-6) 12 18 30 40 28 10 10-0=10 10-0=10
F(3-4) 8 18 26 26 18 0 0-0=0 0-0=0
G(4-5) 1 26 27 37 36 10 10-10=0 0-0=0
H(4-6) 14 26 40 40 36 0 0-0=0 0-0=0
I(5-6) 3 27 30 40 37 10 10-0=10 10-10=0
J(6-7) 14 40 54 54 40 0 0-0=0 0-0=0
Type C. (Event and Three Time is given)

Network diagram, Critical Path. Find EST, EFT, LFE, LST, Total Float, Free Float and Independent Float.

Find the probability that the project is completed in 31 days

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

a : 3 2 6 2 5 3 3 1 4

m : 6 5 12 5 11 6 4 9 19

b : 15 14 30 8 17 15 7 27 28

Event a m b Averag Variance EST EFT LFT LST TT FF

e
1-2 3 6 15 7 4 0 7 15 8 1 1-8=-8
1-6 2 5 14 6 4 0 6 6 0 0 0-0=0
2-3 6 12 30 14 16 7 21 29 15 8 8-8=0
2-4 2 5 8 5 1 7 12 33 28 21 21-11=10
3-5 5 11 7 11 4 21 32 40 29 8 8-8=0
4-5 3 6 15 7 4 12 19 40 33 21 21-8=13
5-8 1 4 7 4 1 32 36 44 40 8 8-0=8
6-7 3 9 27 11 16 6 17 17 6 0 0-0=0
7-8 4 19 28 27 16 17 44 44 17 0 0-0=0

Average = a+4m+b / 6
Variance = square of b-a / 6

The critical path is 1-6-7-8 and the project length is given by 6+11+27 = 44 day

Variance = 4+16+16 = 36

Standard Deviation = 6

The probability of completing the project within 31 days is given by Z = 31 – 44 / 6 = 2.16 = 0.48 (using table)

Hence required probability is 0.50 – 0.48 = 0.0114 or 1.14%.

Type D (Activity and Three Times are given)

Network diagram, Critical Path. Find EST, EFT, LFE, LST, Total Float, Free Float and Independent Float

Find the probability that the project is completed in 30 days

Activity :A B C D E F G H

Predecessor Activity :- - A A A B,C D E,F,G

a : 2 10 8 10 7 9 3 5

m : 4 12 9 15 7.5 9 3.5 5

b : 12 26 10 20 11 9 7 5

Event predecesso a m b Average Variance EST EFT LFT LST TT FF IF

r
A(1-2) - 2 4 12 5 25/9 0 5 5 0 0
 B(1-3) - 10 12 26 10 64/9 0 14 15 15 15
C(2-3) A 8 9 10 9 1/9 5 14 15 15 10
D(2-4) A 10 15 20 15 25/9 5 20 20 20 15
E(2-5) A 7 7.5 11 8 4/9 5 13 24 24 19
F(3-5) B,C 9 9 9 9 0 14 23 24 24 10
G(4-5) D 3 3.5 7 4 4/9 20 24 24 24 4
H(5-6) E,F,G 5 5 5 5 0 24 29 29 29 5
Critical path is 1-2-4-5-6 = 5+15+4+5=29 weeks

Variance = 25/9+25/9+4/9+0 = 6

Probability of completing project in 30 days is Z =30 – 29 / square root of 6 = 0.41 = 0.15 (using table)

Hence the required probability is 0.50+0.15 =0.65

Type E (Crashing of Project)

Determine the project duration which will result in minimum total project cost. Indirect cost is 400 per day.

Activity Predecessor Normal cost Normal Time Crash cost Crash Time
A - 800 2 1400 1
B - 1000 5 2000 2
C - 1000 5 1800 3
D A 500 1 500 1
E B 2000 4 3000 3
F C,D,E 900 5 1600 3
G A 1500 5 2100 3
H B 1200 6 1600 4
Solution – The Critical path is B –E-F = 5+4+5 = 14 days.
Critical Activity Crash cost slope = (crash cost – normal cost) / (normal time – crash time)

B (2000 – 1000) / (5-3) = 333

E (3000 -2000) / (4-3) = 1000

F (1600 – 900) / (5-3) = 350

Step1. The cost of project without crashing is total direct normal cost + total indirect cost for 14 days

(800+1000+1000+500+2000+900+1500+1200) + 14 * 400 = 14500

Step 2.Crash the activity for 3 days from 5 to 2 days at the rate of 333 per days. The project duration reduces to
14-3 11 days

New total cost = (800+1000+1000+500+2000+900+1500+1200) + 3 *333 + 11 *400 = 14300

Step 3.Now crash the activity E for 1 day from 4 to 3 days.

New total cost = (800+1000+1000+500+2000+900+1500+1200) +3*333+2*350+1*1000+8*400 = 14800.

Hence the optimal project duration is 9 days with associated cost of 14200.