IB Business Management Course Companion: toolkit worked example

Critical Path Analysis

 
Critical path analysis is a tool that helps a business to schedule and manage complex and
time-sensitive projects. It is used to map out all important tasks that are essential to complete
a project. It helps to set realistic deadlines for a project and monitor the achievement of
project goals, providing remedial action where required. The following aspects will be required
in critical path analysis:

1. Completion of a critical path diagram

2. Identification of the critical path
3. Calculation of free and total float

Worked example

The owners of Company XYZ have identified various activities required in the planning and
construction of a given project. These are shown in the table below:

Activity Duration Preceded by

(planning and (months)
construction)
A 10
B 9
C 4
D 6
E 6 A
F 7 A, B
G 12 C, D
H 6 A, B
I 3 G, H
J 7 E, F
K 10 I, J

© Oxford University Press 1

IB Business Management Course Companion: toolkit worked example

1. Completion of a critical path diagram for Company XYZ showing the earliest starting
time (EST) and the latest finishing time (LFT) for each activity.

10 E6
2
10
A10 J7
17
5
17
10 F7
B9 4
10
0 24 K10 34
1 7 8
0 24 34
H6
D6

C4 I3

6 G12 18
3 6
9 21

= Critical path
EST = Earliest starting time
LFT = Latest finishing time
= A dummy

EST
Number
LFT

= Activity node

Note:
When calculating the EST of an activity, you work from left to right and you add the duration of
the next activity to the previous EST; always choose the largest number to add on if given a
choice.
When calculating the LFT of an activity, you work from right to left and you subtract the
duration from the previous LFT; always choose the largest number to subtract if given a
choice.

© Oxford University Press 2

IB Business Management Course Companion: toolkit worked example

2. Identification of the critical path. The critical path is: activity A, a dummy, F, J, K.

3. Calculation of free and total float for each activity.

Activity Total float Free float

(LFT – EST – duration) (EST end – EST start – duration)
A
B 1 1
C 5 2
D 3 0
E 1 1
F – –
G 3 0
H 5 2
I 3 3
J – –
K – –

Practice question
The table below shows the production process of a GPS device.

Task Order/dependency Time (days)

A Design device layout Can start at the same time as B and C 30
B Create electronics Can start at the same time as A and C 60
C Create software Can start at the same time as A and B 90
D Build body Must follow A 20
E Combine parts Must follow D 20
F Activate electronics Must follow B and E 5
G Activate software Must follow C and F 5
H Insert special features Must follow G 6
I Test Must follow H 3

© Oxford University Press 3

IB Business Management Course Companion: toolkit worked example

1. Complete the diagram below based on the information given in the table above, by
calculating the earliest starting time (EST) and latest finishing time (LST) for each
activity.

2. Identify the critical path.

3. Calculate the free and total float for each activity in the table below.

Activity Total float Free float

(LFT – EST – duration) (EST end – EST start – duration)
A

I
 

© Oxford University Press 4