OPERATIONS MANAGEMENT L3: PROJECT NETWORK DIAGRAMS

Iron triangle of project management:

 Different scenarios may have a different focus:

o A music festival has to be delivered in time
o An aircraft has to be designed and built to quality
o A fixed grant research project has to be delivered on budget
 But all factors are important in all projects to certain extent

Advantages of using activity network graphs to manage projects

 Managers get:
o A graphical display of project activities 
o Plus an estimate of how long the project will take
o An indication of which activities are the most critical to timely project
completion
o An indication of how long any activity can be delayed without delaying
the project.

Introduction
 A project is composed of :
o Activities and 
o Events
 Activities are represented by arcs (Arrows)
o Are directed. This the activity must take place after the occurrence of
the first node in order for the second node to be obtained
 Activities have a duration
 Events are represented by nodes (circles)
o Well defined occurrence in time
 The direction of the arrow determines the precedence relationship
between events (nodes) 

Activity network – Rules

 The events (nodes) must be numbered so that an activity (an arc) always leads
form a smaller to larger one
 Each node must have at least one arc leading inti it and at least one node
coming out of it except the first and last node.
 Any two nodes may be directly connected together by maximum one arc
Dummy activities:
 Use dummy activities to modify networks when two nodes are joined by two
arcs

 Use dummy variables to avoid loops. The leads to the following additional
rules;
o The network should contain no loops
o Each event along a path must have all preceding events and activities
completed before it can be realised
 Dummy variables have zero duration and utility 

The project network or activity diagram

 Sequential relationships are established by asking of each activity in turn
o What activities must precede it?
o What activities can be done at the same time?
o What activities can be done at the same time?

Example of a project network diagram: Building Hong Kong International Airport

The forward or earliest analysis:

 We want to know how long it takes for an event (node, circle) to be reached
 Need to know estimates of the time required to complete each of the activities
 Then we can work out how long it will take to complete the project
Latest expected completion time
 Certain events may be delayed with no effect on the completion of the
complete project.
 The latest completion time tells us when a node must be reached in order to
avoid a delay in the whole project.
 We work this out using a “backwards analysis”

Slack time
 The slack time associated with each node is the difference between the latest
and earliest time
 The slack time represents the expected delay that can be tolerated when
reaching a node that causes no delay in the time to complete the project.
 For the HK international airport example (next page), nodes 1,4,5 and 6 have
zero slack time. Node 2 has 2 years of slack time. Node 3 has 1 year of slack
time.
 The critical path (which identifies the important activities not to delay) goes
through the nodes with zero slack time.
 Remember dummy variables have no duration, so
the latest time for node 2 is 4-0=4

For node 1 there are three routes back. From node 2, we

have 4-2=2, from node 3 we have 4-3=1 and from node 4 we
have 4-4=0. Create a list (2, 1, 0) and pick the smallest
number, 0.
Then, we do the same as
before, but work backwards.
The time to reach node 5 from
the last node (6) is equal to 7-
2=5
Starting at the last node, put
the earliest time to reach the
last node in the latest time
slot

The critical path:

 The critical path follows all the nodes with a slack time of zero
 A delay in the critical path will mean that the project completion time is
delayed
 It is obvious that if you wish to reduce the time to complete a project then
effort should be concentrated on the critical path(s)
 Brings to light the fallacy of “across-the-board” speed-up activities

Time compression opportunities

 Focus on the critical path – critical activities
 Reducing the durations of non-critical activities will be a wasteful use of
resource

Example: Project network diagram

 The following precedence table describes project.
 Draw its project network diagram and analyse the diagram to determine the
minimum time to complete the project and the critical activities.

Activity Duration Preceding Activity

A 10 -

B 5 -

C 5 -

D 10 C
 E 10 A, B, D

F 17 A, B, D

G 10 A, B, D

H 5 G

Practice: 1 
 Construct a activity network diagram to represent the following
dependencies
o B & C both follow A
o D follows B
o E follows C
o D & E precede F

Practice: 2
 Draw the activity network diagram for the following project
o U is the first activity
o S and L can proceed simultaneously when U is finished
o P and T begin when L is finished and can go on together
 o H follows T
o Z follows H
o N and A can start after S
o O follows N
o O, A, P and Z must all be done before R, the last activity of the
project, can begin

Practice: 3
 Draw the activity network diagram for the following project
o U is the first activity
o S and L can proceed simultaneously when U is finished
o P and T begin when L is finished and can go on together
o H follows T
o Z follows H
o N and A can start after S
o O follows N
o O, A, P and Z must all be done before R, the last activity of the
project, can begin

Practice: 4
 Given the precedence relationships in the following table draw the project
network diagram and identify the critical path

Activity Duratio Preceding

n Activities
A 10 -
B 5 -
C 8 -
D 7 C
E 4 B, D
F 10 A, E
G 12 F