Lecture-6 - Project Planning Technique

23-Jun-20
CE 4023 Construction Practices and

Management
Md. Ashraful Alam
Assistant Professor, Department of CE, UU
Project and its Characteristics
A project is a temporary endeavor involving a connected sequence

of activities and a range of resources, which is designed to achieve
a specific and unique outcome and which operates within time,
cost and quality constraints and which is often used to introduce
change.
Characteristic of a project
• A unique, one-time operational activity or effort
• Requires the completion of a large number of interrelated

activities
• Established to achieve specific objective
• Resources, such as time and/or money, are limited

• Typically has its own management structure
• Need leadership
Md. Ashraful Alam, Assistant Professor,

23-Jun-20
Difference Between Project and Operation

Project Mngt Operation Mngt
Non--repetitive
Non Repetitive
Multi-skilled or very highly
Multi- Limited skills, a huge learning
specialized workforce effect
Scope, performance, time Profit generated, cost reduced
and cost quality of product/services
Subcontracting is essential Generally avoided
Very high risk as generally Generally avoided, use of
no chance of recursion improvement always here
Fixed, ceases with Continuous in nature
assignment Maintenance of existing things
Creation of new thing
Important Aspects of a Project:
• Starting Date
• Specific Goals and Conditions
• Defined responsibilities
• A Budget
• A Planning
• A fixed end date
• Parties involvement

23-Jun-20
Objectives of Project Management
Dependent on all the 3

Fixed tenure Start to End attributes
C = f (P, T, S)
Time
Expectations
Cost Scope
Within Budget
Performance
Service achieved upto

expectation
Project Stakeholders
Project stakeholders are individuals and organizations that

are actively involved in a project or whose interest may be
+ve/--ve ly affected as a result of project execution or project
+ve/
completion..
completion
Key Stakeholders are:
Project Manager
Customer
Performing Organization
Project Team members
Sponsor

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Examples of Project …
Can this be a project?
Project and its Characteristics …cont
• Most realistic projects are large and complex

• Tens of thousands of steps and millions of dollars may be
involved
• Managing large-scale, complicated projects effectively is a
difficult problem and the stakes are high
• The first step in planning and scheduling a project is to
develop the work breakdown structure (WBS)
• Time, cost, resource requirements, predecessors, and
people required are identified for each activity
• Then a schedule for the project can be developed

23-Jun-20
Project Life cycle and its Phases
A project has 4 phases
1. Concept Phase
2. Planning Phase
3. Implementation Phase
4. Termination Phase
CDEF
Overall 85% effort and 40% time of the overall project is consumed
during the implementation phase, whereas planning phase consume 9%
efforts and 30% of time.
Project Life Cycle and its phases

23-Jun-20
Influence of Change Vs Cost of Change
Risky aspects of a project. As the project progress, the cost to make

change increases drastically and value addition becomes difficult
Classification of Projects
On the basis of duration, quantum of investment, ownership

nature and risk involvement.
Project Classification based on Risks

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Classification of Projects…cont.
Greenfield Project: Totally a new venture by a fresh

entrepreneur/promoter
Brownfield Project: An existing project goes for addition of
product/capacity. This is 3 types:
a. Expansion Project: An increase in the capacity of existing
plant/project without any other change. Example; A biscuit
industry increasing its capacity from 20 MT/month to 35
MT/month
b. Vertical Integration: When a firm owns its upstream
supplier and downstream customers
i. Forward integration - from construction firm to real estate company
ii. Backward integration – from steel pipe industry plans to manufacture
its raw materials i.e. steel
Diversification Project: By combining two firms one with

better financial resource but poor technical capabilities and
another firm with strong technical capabilities but poor
financial resources (obtain financial synergy). The objective
is to reduce risk in operations.
I. Concentric diversification: The goal is to achieve a complete
range of products. Example; Honda from car to motorcycle
manufacturing.
II. Conglomerate diversification: When a firm diversifies into
areas that are unrelated to its current line of business. This is
due to limited opportunity in the current line of business.
Example; Merger and Acquisitions due to short time to enter
in a new business. Tata entering into consultancy business.

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Divestment Project: Retrenchment of some or all of the

activities in a given business of the firm or sells out some of
the businesses as such. It involves redefining of business.
Causes are:
Obsolescence of product/service
Increase level of competition
Better opportunity of investment
Increased concentration on fewer project lines
Reasons for Project Failure
In general but not limited to the following list:

1. Poorly defined scope/objectives
2. Underestimated time and cost
3. Large project planning
4. Improper technology selection
5. Defective planning process

23-Jun-20
Work Breakdown Structure
Work Breakdown Structure (WBS)
Project must be divided into manageable tasks and then logically

order
The definition of tasks and their sequences is referred as the Work
Breakdown Structure (WBS)
WBS is essential in Planning and executing the Project.
• A method of breaking down a project into individual elements

• It defines tasks that can be completed independently of other
tasks, facilitating resource allocation, assignment of
responsibilities and measurement and control of the project
• It is the foundation of project planning
• It is developed before identification of dependencies and
estimation of activity durations

23-Jun-20
WBS Example - Banquet

Banquet WBS
Provide
Level 1 1.0
Banquet
Level 2
1.1 1.2 1.3 1.4 1.5 1.6
Plan and Room and

Dinner Guests Staff Speakers
Supervise Equipment
1.3.1
1.1.1 Create 1.2.1 Make 1.4.1 Make 1.5.1 Hire
Identify Site/ 1.6.1 Invite
Plan Menu Guest List Shoppers
Room
1.2.2
1.4.2
1.1.2 Make Create 1.3.2 Set up 1.5.2 Hire 1.6.2
Receive
Budget Shopping Tables/Chairs Cooks Transport
RSVPs
List
1.1.3 Prepare 1.6.3
1.3.3 Lay out 1.4.3 Create 1.5.3 Hire
Disbursements/ 1.2.3 Shop Coordinate
Settings/Utensils Name Tags Servers
Reconciliation Topics
1.1.4
1.4.4 Review 1.5.4 Hire 1.6.4 Backup
Coordinate 1.2.4 Cook 1.3.4 Decorate
Special Needs Hosts for No-shows
Activities
Level 3 1.3.5 Prepare

1.2.5 Serve 1.5.5 Hire 1.6.5 Send
Equipment, Pots,
Dinner Cleanup Thank Yous
Etc.
Automobile WBS
Building a Car Level 1
Chassis Body Powertrain Electrical Level 2
Engine Transmission Level 3
Block Pistons Oil Pan Level 4
Design Level 5
Work Packages Build
Test

23-Jun-20
WBS is more than…

Once the WBS has been drawn, a bottom-up cost estimate can
be produced starting at the lowest branch of the family tree. In
this method, each work package is costed and arranged in such
a way that the total cost of the packages on any branch must
add up to the cost of the package of the parent package on the
branch above
WBS Work Package – Level of Detail
• WHO will be the responsible individual or organization?

• How much TIME will the activity take?
• What COST is associated with accomplishing the activity?
• Can PROGRESS be tracked easily?
All the questions need clear answers for proper project
planning.

23-Jun-20
Project Management
• It is nothing more (or less) than knowing what

the status of a project is:
☺ when it should be done
☺ how much (and if) it has slipped from the
original schedule
☺ what the bottlenecks are
☺ what you might drop to save some time
Project Management Models History
• One of the earliest techniques was the Gantt chart

(used by US Navy).
• This type of chart shows the start and finish times
of one or more activities, as shown below:

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Project Planning, Scheduling & Controlling
Project Planning:
1. Setting goals.
2. Defining the project.
3. Tying needs into timed project activities.
4. Organizing the team.
Project Scheduling:
1. Tying resources to specific activities.
2. Relating activities to each other.
3. Updating and revising on regular basis.
Before Project
Project Controlling:
During Project 1. Monitoring resources, costs, quality and
budgets.
2. Revising and changing plans.
3. Shifting resources to meet demands.
Project Planning…
• Resource Availability and/or Limits

• Due date, late penalties, early completion
incentives
• Budget
• Activity Information
• Identify all required activities
• Estimate the resources required (time) to complete
each activity
• Immediate predecessor(s) to each activity needed
to create interrelationships

23-Jun-20
Project Scheduling and Control

Techniques
Gantt Chart
Critical Path Method (CPM)

Program Evaluation and Review Technique (PERT)
PERT and CPM
• The program evaluation and review technique (PERTPERT)

and the critical path method (CPM
CPM) are two popular
quantitative analysis techniques to help plan, schedule,
monitor, and control projects
• They were developed because there was a critical
need for a better way to manage.
• Originally the approaches differed in how they estimated
activity times
• PERT used three time estimates to develop a
probabilistic estimate of completion time
• CPM was a more deterministic technique
• They have become so similar they are commonly
considered one technique, PERT/CPM

23-Jun-20
From project networks, we determine
• The project duration

• The critical path
• Tasks on the critical path
• Tasks not on the critical path
• Slack or float associated with non-critical
tasks
• Earliest start, earliest finish, latest start
and latest finish times
Six Steps of PERT/CPM
1. Define the project and all of its significant activities or

tasks
2. Develop the relationships among the activities and decide
which activities must precede others
3. Draw the network connecting all of the activities
4. Assign time and/or cost estimates to each activity
5. Compute the longest time path through the network; this is
called the critical path
6. Use the network to help plan, schedule, monitor, and
control the project
 The critical path is important since any delay in these
activities can delay the completion of the project

23-Jun-20
Q?
Given the large number of tasks in a project, it is easy
to see why the following questions are important
1. When will the entire project be completed?
2. What are the critical activities or tasks in the project,
that is, the ones that will delay the entire project if
they are late?
3. Which are the non
non--critical activities, that is, the ones
that can run late without delaying the entire project’s
completion?
4. If there are three time estimates, what is the
probability that the project will be completed by a
specific date?
Q?
5. At any particular date, is the project on schedule,

behind schedule, or ahead of schedule?
6. On any given date, is the money spent equal to, less
than, or greater than the budgeted amount?
7. Are there enough resources available to finish the
project on time?
8. If the project is to be finished in a shorter amount of
time, what is the best way to accomplish this at the
least cost?

23-Jun-20
Drawing the PERT/CPM Network
• There are two common techniques for drawing PERT

networks
• Activity
Activity--on-
on-node (AON
AON) where the nodes represent
activities
• Activity
Activity--on-
on-arc (AOA
AOA) where the arcs are used to represent
the activities
• The AON approach is easier and more commonly found in
software packages
• One node represents the start of the project, one node for
the end of the project, and nodes for each of the activities
• The arcs are used to show the predecessors for each
activity
Drawing the PERT/CPM Network…(some Basics)
• Use of nodes and arrows

• Arrows  An arrow leads from tail to head directionally
• Indicate ACTIVITY, a time consuming effort that is required to
perform a part of the work.
• Nodes  A node is represented by a circle
• Indicate EVENT, a point in time where one or more activities start
and/or finish.
• Activity
• A task or a certain amount of work required in the project
• Requires time to complete
• Represented by an arrow
• Dummy Activity
• Indicates only precedence relationships
• Does not require any time of effort

23-Jun-20
Drawing the PERT/CPM Network…(some Basics)
• Event
• Signals the beginning or ending of an activity
• Designates a point in time
• Represented by a circle (node)
• Network
• Shows the sequential relationships among activities using
nodes and arrows
Activity-on-node (AON)
nodes represent activities, and arrows show
precedence relationships
Activity-on-arrow (AOA)
arrows represent activities and nodes are events for
points in time
Situations in Network Diagram

B
A
A must finish before either B or C
C can start
A
C
Both A and B must finish before C
B can start
A
C Both A and b must finish before
B either of C or D can start
D
A B
A must finish before B can start
Dummy
both A and C must finish before D can
C start
D

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Situations in Network Diagram
Activity-on-Node (AON):
• Uses nodes to represent the activity
• Uses arrows to represent precedence relationships
Interpreting Network into Bar Chart

23-Jun-20
ANC
Example of PERT/CPM
• ANC, Inc. has long been trying to avoid the expense of

installing air pollution control equipment
• The local environmental protection group has recently given
the foundry 16 weeks to install a complex air filter system on
its main smokestack
• ANC was warned that it will be forced to close unless the
device is installed in the allotted period
• They want to make sure that installation of the filtering system
progresses smoothly and on time
ANC
Example of PERT/CPM
• Activities and immediate predecessors for ANC Inc.
IMMEDIATE
ACTIVITY DESCRIPTION
PREDECESSORS
A Build internal components —
B Modify roof and floor —
C Construct collection stack A
D Pour concrete and install frame B
E Build high-temperature burner C
F Install control system C
G Install air pollution device D, E
H Inspect and test F, G

23-Jun-20
ANC
Example of PERT/CPM
• Network for ANC Inc.
A C F
Build Internal Construct Collection Install Control
Components Stack System
E H
Start Inspect Finish
Build Burner
and Test
B D G
Modify Roof Pour Concrete and Install Pollution
and Floor Install Frame Device
Time Activity
• The time estimates in PERT are

Optimistic time (aa) = time an activity will take if
everything goes as well as
possible. There should be only a
small probability (say, 1/100) of this
occurring.
Pessimistic time (b
b) = time an activity would take
assuming very unfavorable
conditions. There should also be
only a small probability that the
activity will really take this long.
Most likely time (m
m) = most realistic time estimate to
complete the activity

23-Jun-20
Time Activity
• PERT often assumes time estimates follow a beta probability

distribution
• The beta probability distribution is often used when there is no
solid historical data upon which to activity time base estimates
• Found to be appropriate in many cases for determining an
expected value and variance for activity completion times
Probability of 1 in 100
of a Occurring
Probability
Probability of 1 in 100
of b Occurring
Activity Time
Most Most Most
Optimistic Likely Pessimistic
Time Time Time
(a) (m) (b)
Time Activity
• To find the expected activity time (tt), the beta distribution

weights the estimates as follows
a  4m  b
t
6
• To compute the dispersion or variance of activity

completion time,
time we use the formula
2
ba
Variance   
 6 

23-Jun-20
Time Activity
• Time estimates (weeks) for ANC Inc.

EXPECTED
MOST TIME,
OPTIMISTIC PROBABLE PESSIMISTIC t = [(a + 4m + VARIANCE
ACTIVITY a m b b)/6] [(b – a)/6]2
A 1 2 3 2 4/36
B 2 3 4 3 4/36
C 1 2 3 2 4/36
D 2 4 6 4 16/36
E 1 4 7 4 36/36
F 1 2 9 3 64/36
G 3 4 11 5 64/36
H 1 2 3 2 4/36
25
How to find Critical Path?
• We accept the expected completion time for each task as the

actual time for now
• The total of 25 weeks in Table does not take into account the
obvious fact that some of the tasks could be taking place at the
same time
• To find out how long the project will take we perform the
critical path analysis for the network
• The critical path is the longest path through the network

23-Jun-20
• ANC’s network with expected activity times
A 2 C 2 F 3
E 4 H 2
Start Finish
B 3 D 4 G 5
• To find the critical path, need to determine the following

quantities for each activity in the network
1. Earliest start time (ES

ES): the earliest time an activity can begin
without violation of immediate predecessor requirements
2. Earliest finish time (EF
EF): the earliest time at which an activity can
end
3. Latest start time (LS
LS): the latest time an activity can begin without
delaying the entire project
4. Latest finish time (LF
LF): the latest time an activity can end without
delaying the entire project

23-Jun-20
• In the nodes, the activity time and the early and late start
and finish times are represented in the following manner
ACTIVITY t
ES EF
LS LF
• Earliest times are computed as

Earliest finish time = Earliest start time
+ Expected activity time
EF = ES + t
Earliest start = Largest of the earliest finish times of
immediate predecessors
ES = Largest EF of immediate predecessors
EXPECTED
MOST TIME,
How to find Critical Path? A

B
1
2
2
3
3
4
2
3
4/36
4/36
C 1 2 3 2 4/36
D 2 4 6 4 16/36
E 1 4 7 4 36/36
F 1 2 9 3 64/36
G 3 4 11 5 64/36
H 1 2 3 2 4/36
25
• At the start of the project we set the time to zero

• Thus ES = 0 for both A and B
A t=2
ES = 0 EF = 0 + 2 = 2
Start
B t=3
ES = 0 EF = 0 + 3 = 3

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EXPECTED
MOST TIME,
How to find Critical Path? A

B
1
2
2
3
3
4
2
3
4/36
4/36
C 1 2 3 2 4/36
D 2 4 6 4 16/36
E 1 4 7 4 36/36
F 1 2 9 3 64/36
• ANC’s ES and EF times G 3 4 11 5 64/36
H 1 2 3 2 4/36
25
A 2 C 2 F 3
0 2 2 4 4 7
E 4 H 2
Start 4 8 13 15 Finish
B 3 D 4 G 5
0 3 3 7 8 13
EXPECTED
MOST TIME,
A 2 C 2 F 3 OPTIMISTIC PROBABLE PESSIMISTIC t = [(a + 4m + VARIANCE
0 2 2 4 4 7
A 1 2 3 2 4/36
B 2 3 4 3 4/36
C 1 2 3 2 4/36
E 4 H 2
D 2 4 6 4 16/36
E 1 4 7 4 36/36
F 1 2 9 3 64/36
G 3 4 11 5 64/36
B 3 D 4 G 5
0 3 3 7 8 13 H 1 2 3 2 4/36
25
• Latest times are computed as
Latest start time = Latest finish time

– Expected activity time
LS = LF – t
Latest finish time = Smallest of latest start times

for following activities
LF = Smallest LS of following activities
 For activity H
LS = LF – t = 15 – 2 = 13 weeks

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EXPECTED
MOST TIME,
A 1 2 3 2 4/36
How to find Critical Path? B 2 3 4 3 4/36

C 1 2 3 2 4/36
D 2 4 6 4 16/36
E 1 4 7 4 36/36
• ANC’s LS and LF times F 1 2 9 3 64/36
G 3 4 11 5 64/36
H 1 2 3 2 4/36
25
A 2 C 2 F 3
0 2 2 4 4 7
0 2 2 4 10 13
E 4 H 2
4 8 13 15
B 3 D 4 G 5
0 3 3 7 8 13
1 4 4 8 8 13
• Once ES, LS, EF, and LF have been determined, it is a simple

matter to find the amount of slack time/float that each activity has
Slack = LS – ES, or Slack = LF – EF
• From Table, we see activities A, C, E, G, and H have no slack time

• These are called critical activities and they are said to be on the
critical path
• The total project completion time is 15 weeks
• Industrial managers call this a boundary timetable

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A 2 C 2 F 3
0 2 2 4 4 7
0 2 2 4 10 13
Slack!
E 4 H 2
4 8 13 15
B 3 D 4 G 5
0 3 3 7 8 13
1 4 4 8 8 13
EARLIES EARLIES LATEST LATEST ON

T START, T FINISH, START, FINISH, SLACK, CRITICAL
ACTIVITY ES EF LS LF LS – ES PATH?
A 0 2 0 2 0 Yes
B 0 3 1 4 1 No
C 2 4 2 4 0 Yes
D 3 7 4 8 1 No
E 4 8 4 8 0 Yes
F 4 7 10 13 6 No
G 8 13 8 13 0 Yes
H 13 15 13 15 0 Yes
A 2 C 2 F 3
0 2 2 4 4 7
0 2 2 4 10 13
CPM
E 4 H 2
4 8 13 15
B 3 D 4 G 5
0 3 3 7 8 13
1 4 4 8 8 13
CPM of ANC Inc.
A 2 C 2 F 3
0 2 2 4 4 7
0 2 2 4 10 13
E 4 H 2
4 8 13 15
B 3 D 4 G 5
0 3 3 7 8 13
1 4 4 8 8 13

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Probability of Project Completion
• The critical path analysis helped determine the expected project

completion time of 15 weeks
• But variation in activities on the critical path can affect overall
project completion, and this is a major concern
• If the project is not complete in 16 weeks, the foundry will have to
close
• PERT uses the variance of critical path activities to help determine
the variance of the overall project
Project variance = ∑ variances of activities

on the critical path
EXPECTED
MOST TIME,
Probability of Project
A 1 2 3 2 4/36
Completion B 2 3 4 3 4/36
C 1 2 3 2 4/36
D 2 4 6 4 16/36
E 1 4 7 4 36/36
F 1 2 9 3 64/36
G 3 4 11 5 64/36
ACTIVITY VARIANCE
H 1 2 3 2 4/36
A 4/36 25
B 4/36
C 4/36
D 16/36
E 36/36
F 64/36
G 64/36
H 4/36
 Hence, the project variance is
Project variance = 4/36 + 4/36 + 36/36 + 64/36 + 4/36 = 112/36 = 3.111

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Project standard deviation   T  Project variance

 3.11  1.76 weeks
• We assume activity times are independent and total project
completion time is normally distributed
• The project’s expected completion date is 15 weeks.
• Assume that the total project completion time follows a normal
probability distribution
• Chart tells us that there is a 50% chance of completing the entire
project in less than 15 weeks and a 50% chance it will exceed 15
weeks
Standard
Deviation = 1.76
Weeks
• The standard normal equation can be applied as follows
Due date  Expected date of completion

Z
T
16 weeks  15 weeks
  0.57
1.76 weeks
• From Probability Distribution Table we find the probability

of 0.71566 associated with this Z value
• That means there is a 71.6% probability this project can be
completed in 16 weeks or less

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• Probability of ANC Inc meeting the 16-week deadline
Expected Time is 0.57 Standard

15 Weeks Deviations
Probability
(T ≤ 16 Weeks)
is 71.6%
15 16
Time
Weeks Weeks
Summary of CMP and PERT
CPM PERT
It defines Critical Path Method It denotes Programme Evaluation
and Review Technique
It was first developed by DuPont It was first developed by NASA
for its Chemical Plant Project for its ballistic missiles project
It uses deterministic time It uses probabilistic time
approach approach
It is based on assumption that It uses three time estimates.
exact time of any activity is Optimistic, most likely and
known pessimistic
It does not consider any It can measure the probability of
probabilistic aspect project completion in some
practical time

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Some Definitions
Network: Network is a diagrammatic representation of

various activities showing their interdependencies and
dependencies, without drawing on scale. Network is the
most commonly used tool for planning and controlling any
project.
Critical Activities: The activities which are crucial for
completion of a project on schedule time.
Project Duration: A project is said to be completed only
when all the activities involved are completed.
Exercise
Find the critical path of those activities. Also find the

total float and free float of those
Activity Precedence Activity Duration (days)

a - 8
b - 9
c a 9
d a,b 4
e a 6
f c 5
g c,d,e 7

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Forward and Backward Pass

Forward Pass
Backward Pass

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Free Float and Total Float

Free Float:
Float: The amount of time that a schedule activity can
be delayed without delaying the early start date of any
immediately following schedule activities
Free Float = ESs – EFp - Lag
Total Float:
Float: The total amount of time that a schedule
activity may be delayed from its early start without delaying
the project finish date, or violating a schedule constraint.
It is the amount of time a task can be delayed without delaying the
project end date. Total Float = LS – ES or LF - EF
Practical Definition:
Slack or Float provide flexibility in the project schedule. When
leveraged properly, project managers can shift activities and
resources to meet the project objectives and priorities. It is the
amount of time an activity can be delayed without impacting other
activities or the project end date and changes over the course of the
project implementation
Free Float and Total Float…cont.

23-Jun-20
Free Float Example
Free Float and Total Float
A 2 B 1 E 4
0 2 2 3 3 7
0 2 9 10 10 14
C 6 D 6
2 8 8 14
2 8 8 14
F 2
2 4
12 14
H 2 G 3
0 2 14 17
12 14 14 17

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Summary of Float
Slack and Float are the same thing. We differentiate between

Total Float and Free Float to understand the amount of delay
we can tolerate without impacting the project schedule and
successor activities, respectively.
The concept and use of float helps us keep our project on

schedule and use resources more efficiently as the project
progresses. The lack of float or its disappearance gives us
clear indication our project is out of control and corrective
measures must be taken. Additionally, by using what-
what-if
scenarios, we can understand impacts to the project.
Understanding float and its use is one industry trick of

successful project managers.
CPM Exercise
Find the completion time and critical path.
Activity Duration (mins) Predecessor

Make Menu 30 -
Shop for Ingredients 60 Make Menu
Prepare Ingredients 60 Shop for Ingredients
Prepare Appetizers 60 Shop for Ingredients
Cook Food 30 Prepare Ingredients
Wash Tableware 45 Make Menu
Set Table 15 Wash Tableware
Serve Dinner 0 Set Table, Cook Food, Prepare Appetizers

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Keeping the Project on Track - Control
Two things to know: (1)Where

(1)Where you suppose to be and
(2) where you are
Principle: Unless you know both cost and schedule, you
have absolutely no idea where your project actually is.
C = Cost
C = f (P, T, S) P = Performance
T = Time
S = Scope
PERT – a cost accounting system
• Although PERT is an excellent method of monitoring and

controlling project length, it does not consider the very
important factor of project cost
• PERT/Cost is a modification of PERT that allows a
manager to plan, schedule, monitor, and control cost as well
as time
• PERT/Cost is an accounting information system that helps
management gauge progress against scheduled time and
cost estimates
• It is a project oriented system that is based on analyzing a
segmented project
• Each segment is a collection of work package
• When discrepancies are found between the actual progress
and the expected progress, corrective action can be taken.

23-Jun-20
Assumptions:
Once started a work package is performed continuously until it
is finished
The cost associated with a work package are spread evenly
throughout its duration
• Value of Work to Date = p x [Work Package Budget]

• Expected Remaining Completion Time =
(1-p) x Original Expected Completion Time
• Cost Overrun/Underrun Analysis

• For each work package (completed or in progress)
we calculate
Cost Overrun =
[Actual Expenditures to Date] - [Value of Work to Date]
Corrective Actions:
If a project is found to be
Behind the schedule and or
Experiencing cost overruns

23-Jun-20
Management seeks out the causes for these problems -

• Correct the project completion time or cost estimates.
• Reassess work package completion times and cost estimates.
• Identify departments or contractors that cause delays.
Possible Corrective actions, to be taken whenever needed -
• Focus on uncompleted activities.
• Determine whether crashing activities is desirable.
• In the case of cost underrun, channel more resources to
problem activities.
• Reduce resource allocation to noncritical activities
A 2 C 2 F 3
0 2 2 4 4 7
PERT – a cost accounting 0 2 2 4 10 13
system
E 4 H 2
4 8 13 15
B 3 D 4 G 5
Project Completion time = 15 weeks 0

1
3
4
3
4
7
8
8
8
13
13
At the end of 10 weeks a progress assessment is made

IMMEDIATE Expenditure
ACTIVITY DESCRIPTION PREDECES (Actual) Status
SORS
A Build internal components — 2600 Finish
B Modify roof and floor — 5000 Finish
C Construct collection stack A 3000 Finish

Pour concrete and install
D B 5000 Finish
frame
Build high-temperature
E C 700 Finish
burner
F Install control system C 5600 40%
G Install air pollution device D, E 700 Finish
H Inspect and test F, G 2000 25%

Work packages to focus on

23-Jun-20
PERT – a cost • Value of Work to Date = p x [Work Package Budget]

• Cost Overrun = [Actual value to date] –[Estimated value]
accounting
system
Project Cost Control – Cost Analysis
Work Budgeted Values Percentage Estimated Actual Cost

Package Complete Value Vaule Overrun
Time Cost
A 2 2000 100% 2000 2600 600
B 3 3000 100% 3000 5000 2000
C 2 4500 100% 4500 3000 -1500
D 4 2500 100% 2500 5000 2500
E 4 500 100% 500 700 200
F 3 13000 40% 5200 5600 400
G 5 1500 100% 1500 700 -800
H 2 6000 25% 1500 2000 500

Lecture-6 - Project Planning Technique

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23-Jun-20

CE 4023 Construction Practices and

Project and its Characteristics

A project is a temporary endeavor involving a connected sequence

• Requires the completion of a large number of interrelated

• Resources, such as time and/or money, are limited

Md. Ashraful Alam, Assistant Professor,

Difference Between Project and Operation

Important Aspects of a Project:

Md. Ashraful Alam, Assistant Professor,

Objectives of Project Management

Dependent on all the 3

Service achieved upto

Project stakeholders are individuals and organizations that

Key Stakeholders are:

Md. Ashraful Alam, Assistant Professor,

Can this be a project?

Project and its Characteristics …cont

• Most realistic projects are large and complex

Md. Ashraful Alam, Assistant Professor,

Project Life cycle and its Phases

A project has 4 phases

Project Life Cycle and its phases

Md. Ashraful Alam, Assistant Professor,

Influence of Change Vs Cost of Change

Risky aspects of a project. As the project progress, the cost to make

On the basis of duration, quantum of investment, ownership

Project Classification based on Risks

Md. Ashraful Alam, Assistant Professor,

Greenfield Project: Totally a new venture by a fresh

Diversification Project: By combining two firms one with

Md. Ashraful Alam, Assistant Professor,

Divestment Project: Retrenchment of some or all of the

Reasons for Project Failure

In general but not limited to the following list:

Md. Ashraful Alam, Assistant Professor,

Work Breakdown Structure

Work Breakdown Structure (WBS)

Project must be divided into manageable tasks and then logically

• A method of breaking down a project into individual elements

Md. Ashraful Alam, Assistant Professor,

Work Breakdown Structure (WBS)

WBS Example - Banquet

Plan and Room and

Level 3 1.3.5 Prepare

Work Breakdown Structure (WBS)

Building a Car Level 1

Chassis Body Powertrain Electrical Level 2

Engine Transmission Level 3

Block Pistons Oil Pan Level 4

Md. Ashraful Alam, Assistant Professor,

WBS is more than…

WBS Work Package – Level of Detail

• WHO will be the responsible individual or organization?

Md. Ashraful Alam, Assistant Professor,

• It is nothing more (or less) than knowing what

Project Management Models History

• One of the earliest techniques was the Gantt chart

Md. Ashraful Alam, Assistant Professor,

Project Planning, Scheduling & Controlling

• Resource Availability and/or Limits

Md. Ashraful Alam, Assistant Professor,