CHAPTER 7

Project Scheduling
 Chapter Objectives
– Parsing a project into activities.
– Network representation of project scheduling models.
– Gantt charts.
– Earliest / Latest start / S lack times for an activity.
– PERT analysis
– CPM analysis
– Resource Leveling.
– PERT / COST.
7.1 Introduction
• A project is a collection of tasks that must be
completed in minimum time or at minimal cost.

• Tasks are called “activities”.

– Estimated completion time (and sometimes costs) are
associated with each activity.
– Activity completion time is related to the amount of
resource committed to it.
– The degree of activity details depends on the
application and the level of specificity of data.
• Determining precedence relations among the
activities is crucial to developing optimal
schedules.
• Objective of Project Scheduling
– Project Scheduling is used to plan and control a project
efficiently and economically.

– With Project Scheduling we can:

• characterize the activities
• monitor the project progress.
 • Project Scheduling provides us with the following
Information
–The minimal expected completion time for a project.
– The critical activities.
– The earliest and latest time to start and finish an activity.
– The amount of slack time for each activity .
– The most cost effective completion alternatives.
– The activities on which extra resources should be spent.
– Whether or not a project is on schedule or within budget.
– A schedule that offers a constant level of resources
utilization.
– A schedule that completes a project in minimum time given
limited resources.
7.2 Identifying the Activities of a
Project
KLONE COMPUTERS, INC.

• KLONE Computers manufactures personal computers.

• It is about to design, manufacture, and market the

Klonepalm 2000 palmbook computer.
• There are three major tasks to perform
– Manufacture the new computer.
– Train staff and vendor representatives.
– Advertise the new computer.

• KLONE needs to develop a precedence relations

chart.

• The chart gives a concise set of tasks and their

immediate predecessors.
 Activity Description
Activity Description
A Prototype model design
B Purchase of materials
Manufacturing C Manufacture of prototype model
activities D Revision of design
E Initial production run

F Staff training
Training activities G Staff input on prototype models
H Sales training

Advertising activities I Pre-production advertising campaign

J Production advertising campaign
From the activity description chart, we can
determine immediate predecessors for
each activity.
 Precedence Relationships Chart

Immediate Estimated
Activity Predecessor Completion Time
A None 90
B A 15
C B 5
D G 20
E D 21
F A 25
G C,F 14
H D 28
I A 30
J D,I 45
7.3 Gantt Charts
• A Gantt Chart is a graphical presentation that
displays activities and monitor their progress.

• Time is measured on the horizontal axis.

• Each activity is listed on the vertical axis.

• A horizontal bar is drawn proportionately to its
expected completion time.

• In an earliest time Gantt chart the bars begin at the

earliest moment the activity can be started.

• The end of the bar represents the earliest completion

time for the activity.
 90
105
90 115
A 15 129
B
Here‘s how we build 5 149 194
C an Earliest Time Gantt Chart 20
D Immediate Estimated 194
Activity Predecessor Completion Time 21
E 25
A None 90
F B A 15
14
C B 5
G 28
D G 20
H E D 21
F A 25 30
I G C,F 14 45
J H D 28
I A 30
J D,I 45
 Scheduling Sequence of Activities
Activities
that can beExpected Precedence/ Activity Schedule
scheduledCompletion time Finish time From To
1 A 90 0 90
2 B 15 A(90) 90 105
F 25 90 115
I 30 90 120
3 C 5 B(105) 105 110
4 G 14 C(110),F(115) 115 129
5 D 20 G(129) 129 149
6 E 21 D(149) 149 170
H 28 149 177
7 J 45 D(149), I(120) 149 194
• Monitoring Project Progress

– Gantt chart can the used as a visual aid for tracking the
progress of project activities.

– Appropriate percentage of a bar is shaded to document the

completed work.

– The manager can easily see if the project is progressing on

schedule (with respect to the earliest possible completion
times of activities).
• Gantt charts has advantages and disadvantages
– Advantages .
• Gives earliest completion date.
• Provides a schedule of earliest possible start and finish times of
activities.
• It is easy to construct.

– Disadvantages
• Gives only earliest or latest possible schedule.
• Does not show whether the project is behind schedule.
• Does not clarify the effects of delays in any one activity on the
start of another activity, thus the project completion time.
7.4 Building PERT/CPM Networks
• The PERT/CPM approach to project scheduling
– A network representation of the project that reflects activity
precedence relationships.
– It is designed to perform a thorough analysis of possible
project schedules.
– Primary objectives of PERT/CPM
• To determine the minimal possible completion time for the project.
• To determine a range of start and finish time for each activity, so
that the project can be completed in minimal time.
• PERT is a scheduling method in which activity
completion times are treated as a random variable.

• CPM is a scheduling method which assumes the

completion time for an activity is deterministic,
dependent only on the amount of money spent to
complete it.

• Both methods require one to identify the activities and

the precedence relationships between activities.
7.5 The PERT/CPM Approach for
Project Scheduling
KLONE COMPUTERS, INC. - Continued
• Management at KLONE would like to schedule the
activities so that the project is completed in minimal
time.
• Management wishes to know:

– The earliest completion date for the project.

– The earliest and latest start times for each activity which will not alter
this date.
– The earliest finish times for each activity which will not alter this date.
– Activities with rigid schedule and activities that have slack in their
schedule.
An Activity On Node (AON) Network Representation
of the Klonepalm 2000 Computer Project

B C
Immediate E Estimated
15 5 Activity Predecessor
21 Completion Time
A None
None 90
B AA 15
C BB 5

FINISH
A F G D D G H 20
90 25 14 E 20 D 28 21
F AA 25
G C,F 14
H D 28
I I AA J 30
30 J D,I 45 45
• Earliest start time / Earliest finish time
– Make a forward pass through the network as follows:

• Evaluate all the activities which have no immediate

predecessor.
– The earliest start for such an activity is zero ES = 0.
– The earliest finish is the activity duration EF = Activity duration.

• Evaluate the ES of all the nodes for which EF of all the

immediate predecessor has been determined.
– ES = Max EF of all its immediate predecessors.
– EF = ES + Activity duration.

• Repeat this process until all nodes have been evaluated

– EF of the finish node is the earliest finish time of the project.
 Earliest Start / Earliest finish
Evaluate the ESallofthe
Evaluate allactivities
the nodeswhich
for which
have EF has been determined
no immediate predecessor
90,105 105,110 149,170
B
B C
C E
E
15 5 21
170
110,124
0,90 90,115 115,129 129,149 149,177

FINISH
FINISH
F G D H 177
A F G D H
A 25 14 20 28
90

120,165 194
194
90,120 149,194
I J
I J
30 45

EARLIEST FINISH TIME

• Latest start time / Latest finish time
– Make a backward pass through the network as follows:

• Evaluate all the activities that immediately precede the finish

node.
– The latest finish for such an activity is LF = minimal project
completion time.
– The latest start for such an activity is LS = LF - activity duration.
• Evaluate the LF of all the nodes for which LS of all the
immediate successor has been determined.
– LF = Min LS of all its immediate successors.
– LS = LF - Activity duration.
• Repeat this process backward until all nodes have been
evaluated.
 Latest Start / Latest finish

90,105 105,110 149,170

B C 110,115 173,194 E
95,110 B C E
15 5 21

90,115 115,129 129,149 149,177

90, 115 129,149
115,129 129,149
153,173 166,194
5,95 0,90 129,149

FINISH
FINISH
A 0,90 F G 129,149 D 146,166 H
A F G 129,149 20 D H
90 25 14 129,149 28
129,149
129,149
29,119
149,194 194
90,120
149,194
119,149
I J
I J
45
30
• The Critical Path and Slack Times

– Activity start time and completion time may be delayed by

planned reasons as well as by unforeseen reasons.

– Some of these delays may affect the overall completion date.

– To learn about the effects of these delays, we calculate

the slack time, and form the critical path.
– Slack time is the amount of time an activity can be delayed
without delaying the project completion date, assuming no
other delays are taking place in the project.

Slack Time = LS - ES = LF - EF
Slack time in the Klone 2000 Project

Activity LS - ES Slack
A 0 -0 0
B 95 - 90 5
C 110 - 105 5
C 119 - 119 0 Critical
Criticalactivities
activities
D 173 - 149 24
must
mustbe
berigidly
rigidly
E 90 - 90 0
F 115 - 115 0 scheduled
scheduled
G 166 - 149 17
H 119 - 90 29
I 149 - 149 0
- The Critical Path
• The critical path is a set of activities that have no slack,
connecting the START node with the FINISH node.

• The critical activities (activities with 0 slack) form

at least one critical path in the network.

• A critical path is the longest path in the network.

• The sum of the completion times for the activities

on the critical path is the minimal completion time
of the project.
The forward and backward passes provided the earliest
and latest times to start and finish each activity.

90,105 105,110 149,170

B C 110,115 173,194 E
95,110 B C E
15 5 21

90,115 115,129 129,149 149,177

90, 115 115,129 129,149 166,194
0,90

FINISH
FINISH
A 0,90 F G D H
A F G D H
90 25 14 20 28

THE CRITICAL PATH 149,194 194

90,120
149,194
119,149
I J
I J
45
30
• Analysis of Possible Delays

– We observe two different types of delays.

• Single delays

• Multiple delays

– In some cases the overall project completion time will be

delayed.

– The conditions that specify each case are presented next.

– Single delays

• A delay of a certain amount in a critical activity, causes the entire

project to be delayed by the same amount.

• A delay of a certain amount in a noncritical activity will delay the

project by the amount the delay exceeds the slack time.

• When the delay is less than the slack, the entire project is not
delayed.
– Multiple delays

• Observe three cases of delays in two non-critical activities.

– Case 1: There is no path linking the two non-critical activities.

– Case 2: The non-critical activities are on the same path, separated
by a critical activity.
– Case 3: The two non-critical activities are on the same path, with no
critical activity separating them.

• In each one of the above cases, the amount specified will

cause no delay in the entire project.
 Case 1: Activity E and I are each delayed 15 days.
THE PROJECT COMPLETION TIME ES=149
DELAYED START=149+15=164
IS NOT DELAYED
LS=173
B C E
15 5 21

FINISH
A F G D H
90 25 14 20 28

I J
30 45
ES=90
DELAYED START=90+15 =105
LS =119
 90
105

90 115
A 129
15
B 5 149 194
C Gantt chart demonstration of 20
D the (no) effects on the project
completion time when delaying 21 194
E activity “I” and “E” by 15 days. 25 Activity E
F
14
G 28
H
30
I Activity I 45
J
Case 2: Activity B is delayed 4 days; Activity B and E are separated
by the critical activities G and D.
Activity E is delayed 15 days.
ES=90 ES=149
DELAYED START =94 DELAYED START=149+15 =164
LS =95 LS =173

B C E
15 5 21

FINISH
A F G D H
90 25 14 20 28

I J
30 45

THE PROJECT COMPLETION TIME IS NOT DELAYED

• Case 3: Activity B is delayed 4 days;
Activity C is delayed 4 days.
3 DAYS DELAY
ES= 90
IN THE ENTIRE
DELAYED START =94 PROJECT
DELAYED START=
DELAYED FINISH =
109 + 4 =113;
94+15=109
B C LS =110 E
15 5 21

FINISH
A F G D H
90 25 14 20 28

I J
30 45

THE PROJECT COMPLETION TIME IS DELAYED 3 DAYS

7.6 Resource Leveling and
Resource Allocation
• During the course of a project resources are expended on
each activity.

• It is desired that resources are evenly spread out during the

life of the project.

• Resource leveling methods (usually heuristics) are designed

– to control resource requirements,
– to generate relatively similar usage of resources over time.
• A Heuristic Approach to “Level” Expenditures

– Assumptions
• Once an activity has started it is worked on continuously until it is
completed.
• Costs can be allocated equally throughout an activity duration.

– The Heuristic
Step 1: Consider the schedule that begins each activity at its ES.
Step 2: Determine which activity have slack at periods of peak
spending.
Step 3: Attempt to reschedule the noncritical activities performed
during these peak periods to periods of less spending, but
within the time period between their ES and LF.
– One procedure to accomplish step 3 is to
• Analyze the noncritical activities with the most slack during the period.
• Analyze the noncritical activities that utilize the largest amount of
resource.

– This procedure is demonstrated next.

 KLONE COMPUTERS, Inc. (Continued)

• Management wishes to schedule the project such that

– Completion Time is 194 days.
– Daily expenditures are kept as constant as possible.

• To perform this analysis cost estimates for each

activity will be needed.
 Cost estimates for each activity

Total Total Cost

Cost Time per
Activity Description (x10000) (days) Day
A Prototype model design 2250 90 25
B Purchase of materials 180 15 12
C Manufacture of prototype 90 5 18
D Revision of design 300 20 15
E Initial production run 231 21 11
F Staff training 250 25 10
G Staff input on prototype 70 14 5
H Sales traini ng 392 28 14
I Pre-production advertisement 510 30 17
J Post-production advertisement 1350 45 30
Total cost = 5,623
 Cumulative Daily Expenditure- Earliest Times vs. Latest Times

55 Earliest Start-Earliest Finish

50 Budget
45
40
35
30 et Feasible
udg
25
elB Budgets
ev
20 L
15
Latest Start-Latest Finish
10
Budget
5

20 40 60 80 100 120 140 160 180 200

 Daily Expenditure of the ES Schedule
55
50
45 44
45
40 39
E
35 C 30
30 B 27 H H
25
25 22
F F J J J
20 15
15
A I I I I
10
D
5 5
GG

20 40 60 80 100 120 140 160 180 200

 A Gantt demonstration: 90
Shifting activity “H” 105
90 115
A 15 129
B 5 149 194
C 20
D 194
21
E 25
F
14
G 28
Move “H” to its latest 28
H start at 166 H
30
I 45
J

0 20 40 60 80 100 120 140 160 180 200

 Cost Leveling
55
55
50
45 44
45 41
40 39
E
H
35 C H 30
30 27 H
25 B F J
25 22
J
20 F I F J
15
15 I
G
A I
10 I
5 D
5
G
20 40 60 80 100 120 140 160 180 200
 A Gantt demonstration: 90 DE
Shifting activity I 105 MO
90 115
A 15 129
B 5 149 194
C 20
D 194
21
E 25
F
14
G 28
H
30 30
I
Move “I” to its latest start I 45
at 119
J

0 20 40 60 80 100 120 140 160 180 200

 Cost Leveling
55
55
50
45 44
45
40 39
E
35 I
C H 30
I H
30 27
25 B F J
25 22
I J
20 F I IF J
I 15
15 I
G
A I
10 I D
5
G
20 40 60 80 100 120 140 160 180 200
 A Gantt demonstration: 90 DE
Shifting activity I 105 MO
90 115
A 15 129
B 5 149 194
C 20
D 194
21
E 25
F Recall 14
G 28
H
30 30
I
Move “I” backward 45
to the finish of activity “C”
J

0 20 40 60 80 100 120 140 160 180 200

 Cost Leveling
55
50 Compare the current cost profile
with the initial cost profile
45 44
40 E H
35 C H 30
30 27 H
25 B F J
25 22
I J
20 F I I I J
15
15 GI
A I
10 I D
5
G
20 40 60 80 100 120 140 160 180 200
 7.7 The Probability Approach to
Project Scheduling

• Activity completion times are seldom known with 100% accuracy.

• PERT is a technique that treats activity completion times as random

variables.

• Completion time estimates are obtained by the

Three Time Estimate approach
• The three time estimate approach provides completion
time estimate for each activity.
• We use the notation:
a = an optimistic time to perform the activity.
m = the most likely time to perform the activity.
b = a pessimistic time to perform the activity.

• Approximations for the mean and the standard

deviation of activity completion time are based on the
Beta distribution.
a + 4m + b
 = the mean completion time =
6
b -a
 = the standard deviation =
6
– Assumption 1
• A critical path can be determined by using the mean completion times
for the activities.
• The project mean completion time is determined solely by the
completion time of the activities on the critical path.

To calculate the mean and standard

– Assumption 2
deviation of the project completion time
• The time to complete one activity is independent of the time to
we make some simplifying assumptions.
complete any other activity.

– Assumption 3
• There are enough activities on the critical path so that the distribution
of the overall project completion time can be approximated by the
normal distribution.
The three assumptions imply that the overall project
completion time is normally distributed, with
Mean = Sum of mean completion times along
the critical path.
Variance = Sum of completion time variances
along the critical path.
 KLONE COMPUTERS - revised
• Three time estimates were given for each activity

Activity Optimistic Most Likely Pessimistic

A 76 86 120
B 12 15 18
C 4 5 6
D 15 18 33
E 18 21 24
F 16 26 30
G 10 13 22
H 24 18 32
I 22 27 50
J 38 43 60
• Management at KLONE is interested in
– The probability that the project will be completed within
194 days.
– An interval estimate of the project completion time.

– The probability that the project will be completed within

180 days.

– The probability that the project will take longer than

210 days.

– An upper limit for the number of days within which it can virtually
be sure the project will be completed.
• Calculation of the means and the variances
A = [76+4(86)+120]/6 = 90
 = (120 - 76)/6 = 7.33 A2 = (7.33)2 = 53.78

– For the rest of the activities we have


Activity   
A 90 7.33 53.78
B 15 1.00 1.00
C 5 0.33 0.11
D 20 3.00 9.00
E 21 1.00 1.00
F 25 2.33 5.44
G 14 2.00 4.00
H 28 1.33 1.78
I 30 4.67 21.78
J 45 3.67 13.44
• The mean times are the same as in the CPM problem,
previously solved for KLONE.

• Thus, the critical path is A - F- G - D - J.

– Expected completion time = A + F + G + D + J = 194
– The project variance =A2 +F2 +G2 +D2 +J2 = 85.66
– The standard deviation =  = 9.255
Under the assumptions stated above the completion time of
the project is normally distributed with= 194 days and
= 9.255 days.
• Now the quantities of concern for management can be
calculated.
– The probability of completion in 194 days =

194 - 194
P(X  194) = P(Z  )  P( Z  0 )  0.5
9.255
• An interval in which we are reasonably sure the completion
date lies is

  z 0.025 
– The interval is = 194 1.96(9.255) {175, 213} days.
• There is 95% confidence 
that the real completion time lies within 175
days and 213 days.
 The probability of completion in 180 days =
P(X  180) = P(Z -1.51) = 0.5 - 0.4345 = 0.0655

0.0655
0.99 0.0418
.4345 .4582
0.01
180 194 210 x X
-1.51 0 1.73 2.33 Z
– The probability that the completion time is longer
than 210 days = P(X  210) = P(Z  1.73) = 0.5 - 0.458 = 0.0418
– Assume a 99% certain completion date is acceptable
P(Z  2.33) = 0.99; x=+ z =194 + 2.33(9.255) = 215.56 days.
7.8 Computer Solution of
PERT/CPM
• A linear programming approach
– Variables
• Xi = The start time of the activities for i=A, B, C, …,J
• X(FIN) = Finish time of the project

– Constraints
• Each immediate predecessor relationship has one constraint
• The constraints state that the start time of an activity must not
occur
before the finish time of the immediate predecessor.
– The Model C
5

Minimize X(FIN)
ST
F
X(FIN) XE + 21 25
G
X(FIN)  XH + 28
X(FIN)  XJ + 45 XD XG + 14
D + 20
XE X XG X C + 5 
XH XD + 20 XG XF + 25
XJ XD + 20 XI XD + 90
XJ XI + 30 XF XA + 90 
XC XB + 15 
XD XG + 14 
All X’sXare Xnon-negative 
B A + 90
– An Excel solution provides:

• A schedule of (not necessarily the earliest)

start time that will complete the project in minimal time.
• The earliest starts, returned when using the following objective function

Minimize XA + XB + XC +…+ XJ + X(FIN)

• The latest starts that can be obtained (after solving for the project
earliest finish) as follows
– Add the constraint X(FIN) = 194
– Change the objective function to
Maximize XA + XB + XC +…+ XJ + X(FIN).
• A Network Approach
– WINQSB provides
• Activity schedule chart (ES, EF, LS, LF).
• Mean and standard deviation of the critical path.
• Optional: Earliest and latest time Gantt chart.
• Optional: The probability of completing the project within
a specified time.

– No programming is needed.

– Input data consists of

• Immediate predecessors for each activity.
• Completion time (for a, m, and b).
 Critical Activities

WINQSB Scheduling Solution

 Earliest start
A B

C Latest start
WINQSB Gantt Chart
D

E
F
G
H
I
J
7.9 Cost Analysis Using the
Expected Value Approach
• Spending extra money, in general should decrease
project duration.

• Is this operation cost effective?

• The expected value criterion is used to answer this

question.
 KLONE COMPUTERS -
Cost Analysis Using Probabilities

• Analysis indicated that -

– Completion time within 180 days yields an additional profit

of 1 million dollars.

– Completion time between 180 days and 200 days, yields

an additional profit of 400,000 dollars.
 KLONE COMPUTERS -
Cost Analysis Using Probabilities

• Completion time reduction can be achieved by

additional training
Which option should be
pursued?
• Two possible activities are considered for training
– Sales personnel training -
• Cost 200,000 dollars;
• New time estimates are a = 19, m= 21, and b = 23 days.
– Technical staff training -
• Cost $250,000;
• New time estimates are a = 12, m = 14, and b = 16.
• Evaluation of spending on sales personnel training
– This activity (H) is not critical.
– Under the assumption that the project completion time is
determined solely by critical activities, this option
should not be considered further.

• Evaluation of spending on technical staff training

– This activity (F) is critical.
– This option is further studied as follows
• Calculate expected profit when not spending $250,000.
• Calculate expected profit when spending $250,000.
• Select the decision with a higher expected profit.
– Case 1: Do not spend $250,000 on training
This case represents the current situation.
Expected gross additional profit =
P(completion time is less than 180)($1 million) +
P(180<Completion time<200)($400,000) +
P(Completion time> 200)(0) =
P(X<180)($1 million) + P(180<X<200)($400,000) + P(X>200)(0)

[P(Z< 180-194)=P(Z< -1.51) = .0655; P(-1.51<Z<.65) = .6767]

9.255

Expected gross additional profit = .06555(1M)+.6767(400K)=

= $366,180.
– Case 2: Spend $250,000 on training

• The new time estimates change the expected time and standard
Expected
deviation Gross
of a critical Additional Profit =
activity.
P( completion time<180)(1M)+
• The newP(180<completiontime<200)(400K)
estimates are
= (12+P(completion
+ 4 (14) + 16)/6 = 14time>200)(0) =
= (16 -12)/6 =0.67
0.1611(1M)+0.7277(400K) =
 = 0(.67) =0.44
 2
$452,180
• The project has a new critical path (A-B-C-G-D-J), with a mean
time = 189 days, and a standard deviation of = 9.0185 days.

• P(Z< 180-189 ) = P(Z< -.99) = 0.1611; P( - 0.99<Z< 1.22) = 0.7277

9.0185
 – The expected net additional profit =
452,180-250,000 = $202,180 < $336,180

Expected additional net profit when Expected profit without

spending $250,000 on training spending $250,000 on training

Conclusion:
Conclusion: Management
Managementshould
shouldnot
notspend
spendmoney
moneyon
on
additional
additionaltraining
trainingofoftechnical
technicalpersonnel
personnel
7.10 The Critical Path Method (CPM)
• The critical path method (CPM) is a deterministic
approach to project planning.

• Completion time depends only on the amount of

money allocated to the activity.

• Reducing an activity’s completion time is called

“crashing”.
• There are two crucial time duration to consider
for each activity.

– Normal completion time (NT)

– Crash completion time (CT)

– NT is achieved when a usual or normal cost (NC)

is spent to complete the activity.

– CT is achieved when a maximum crash cost (CC)

is spent to complete the activity.
 The Linearity Assumption

[Normal Time - Crash Time] [Crash Cost - Normal Cost]

=
[Normal Time] [Normal Cost]
 Normal
NC = $2000 A demonstration
NT = 20 days Total Cost = $2600
Time of the
Job time = 18 days
20 …and save on
completion
18 …and time on Linearity assumption
save more
16 completion time
Add 25% to the
14 Add to
Add more to the
the normal cost
12 normalnormal
cost... cost...
Save 25% on
10 completion time Crashing
CC = $4400
8
CT = 12 days
6 Additional Cost to get Max. Time Reduction
4 Marginal Cost =
Maximum Time reduction
2 = (4400 - 2000)/(20 - 12) = $300 per day

Cost ($100)
5 10 15 20 25 30 35 40 45
• Meetings a Deadline at Minimum Cost

– Let D be the deadline date to complete a project.

– If D cannot be met using normal times, additional resources

must be spent on crashing activities.

– The objective is to meet the deadline D at minimal additional

cost.

– Tom Larkin’s political campaign problem illustrates the

concept.
 TOM LARKIN’S POLITICAL CAMPAIGN
• Tom Larkin has 26 weeks of mayoral election
campaign to plan.
• The campaign consists of the following activities
Immediate Normal
Normal
Schedule
Schedule
Reduced Schedule
Activity Predecessor Time Cost Time Cost
A. Hire campain staff None 4 2.0K 2 5.0K
B. Prepare position paper None 6 3.0 3 9
C. Recruit volunteers A 4 4.5 2 10
D. Raise funds A,B 6 2.5 4 10
E. File candidacy papers D 2 0.5 1 1
F. Prepare campaign material E 13 13.0 8 25
G. Locate/staff headquarters E 1 1.5 1 1.5
H. Run personal campaign C,G 20 6.0 10 23.5
I. Run media campaign F 9 7.0 5 16
 NETWORK
NETWORKPRESENTATION
PRESENTATION

A C H
To meet the deadline date
of 26 weeks some activities
G
must be crashed. FINISH

F I
D E
B
WINQSB CPM schedule with normal times.
Project completion (normal) time = 36 weeks
 Mayoral Campaign Crash Schedule

Activity NT NC($) CT CC T M($)

A 4 2000 2 5000 2 $1,500
B 6 3000 3 9000 3 2000
C 4 4500 2 10000 2 2750
D 6 2500 4 10000 2 3750
E 2 500 1 1000 1 500
F 13 13000 8 25000 5 2400
G 1 1500 1 1500 *** ***
H 20 6000 10 23500 10 1750
I 9 7000 5 16000 4 2250
 SOLUTION

• Heuristic Approach
– Three observations lead to the heuristic.
• The project time is reduced only by critical activities.
• The maximum time reduction for each activity is limited.
• The amount of time a critical activity can be reduced before another.
path becomes critical is limited.
– Small crashing problems with small number of critical paths
can be solved by this heuristic approach.
– Problems with large number of critical paths are better
solved by a linear programming model.
 SOLUTION
• Linear Programming Approach
– Variables
Xj = start time for activity j.
Yj = the amount of crash in activity j.
– Objective Function
Minimize the total additional funds
spent on crashing activities.
– Constraints
• The project must be completed by the deadline date D
• No activity can be reduced more than its Max. time reduction
• Start time of an activity Finish time of immediate predecessor

 Minimize total crashing costs
Min1500Y A  2000Y B  2750Y C  3750 YD  500 YE  2400 YF  17500 YH  2250 YJ
ST X(FIN)  X I  (9  YI )
Meet the deadline X (FIN)  26 X(FIN)  X  (20  YH )
YA  2 X I  X F  (13  YF )
Activity can
XH  X G  1 start only after
YB  3
Maximum X H  X C  ( 4  YC ) all the
time-reduction YC  2
X G  X E  (2  YE ) predecessors
constraints YD  2 are completed.
X F  X E  (2  YE )
YE  1
X E  X D  (6  YD )
YF  5 X D  X B  (6  YB )
A C YH  10 H X D  X A  ( 4  YA )
G FINISH X C  X A  ( 4  YA )

F I
D E
B
Most of the activities Deadline Crashing costs
become critical !!
WINQSB
WINQSBCrashing
CrashingOptimal
OptimalSolution
Solution
• Other Cases of Project Crashing

– Operating Optimally within a given budget

• When a budget is given, minimizing crashing costs is a constraint,
not an objective.
• In this case the objective is to minimize the completion time.

– Incorporating Time-Dependent Overhead Costs

• When the project carries a cost per time unit during its duration, this
cost is relevant and must be figured into the model.
• In this case the objective is to minimize the total crashing cost
+ total overhead cost
 TOM LARKIN - Continued
• The budget is $75,000.
The objective function becomes a constraint
Minimize X(FIN)
1500 YA+ 2000 YB + 2750 YC + 3750 YD + 500 YE + 2400 YF
+1750 YH + 2250 YJ

This constraint becomes the objective function

X(FIN) 26
1500 YA+ 2000 YB + 2750 YC + 3750 YD + 500 YE + 2400 YF
+1750 YH + 2250 YJ  75,000 - 40,000 = 35,000

The rest of other crashing model constraints

remain the same.
Normal time is 13 weeks Normal time is 17 weeks
Project completion time Overall crashing cost

WINQSB
WINQSBCrashing
CrashingAnalysis
Analysiswith
withaaBudget
Budgetofof$75000
$75000
• Administrative Costs of $100 per week.
The campaign must be completed within 26
weeks, but there are weekly operating expenses
of $100.
The Objective Function becomes
Minimize
1500 YA+ 2000 YB + 2750 YC + 3750 YD + 500 YE + 2400 YF
+1750 YH + 2250 YJ + 100X(FIN)

The other crashing model constraints remain

the same.
 7.11 PERT / COST
• PERT/Cost is an accounting information system that helps
management gauge progress against scheduled time and cost
estimates.
• When discrepancies are found between the actual progress
and the expected progress, corrective actions can be taken.
• PERT/Cost is a project oriented system that is based on
analyzing a segmented project.
• Each segment is a collection of work packages.
• Work Package - Assumptions

– Once started, a work package is performed

continuously until it is finished.

– The costs associated with a work package are spread

evenly throughout its duration.
 Work Package Forecasted Cost per Time Unit =
Budgeted Total Cost for Work Package
=
Expected Completion Time for Work Package

• Current Status of a Work Package includes

– Value of work done to date.
– Expected time remaining to complete the work package.
– The value of work and the remaining time are calculated
using the following data:
• Work package cost per time unit.
• Activity schedule obtained by PERT/CPM
• Actual expenditures.
• % of work package completed, p.
• Value of Work to Date = p x [Work Package Budget]
• Expected Remaining Completion Time =
(1-p) x Original Expected Completion Time
• Completion Time Analysis
– Using the expected remaining completion time estimates,
project completion time can be revised.

• 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 schedule and or
• Experiencing cost overruns,

– 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

 TOM LARKIN - Revision

• Normal completion time = 36 weeks.

• At the end of week 20 a progress assessment is made.

• If the campaign is not on target or not within budget

recommendations for corrective actions are required.
 Mayoral Campaign status report

Work
Work Package
Package Expenditures
Expenditures ($)
($) Status
Status
AA Hire
Hirecampaign
campaignstaff
staff 2,600
2,600 Finish
Finish
BB Prepare
Prepareposition
positionpaper
paper 5,000
5,000 Finish
Finish
CC Recruit
Recruitvolunteers
volunteers 3,000
3,000 Finish
Finish
DD Raise
Raisefunds
funds 5,000
5,000 Finish
Finish
EE File
Filecandidacy
candidacypapers
papers 700
700 Finish
Finish
FF Prepare
Preparecampaign
campaignmaterial
material 5,600
5,600 40%
40% complete
complete
GG Locate/staff
Locate/staffheadquarter
headquarter 700
700 Finish
Finish
HH Run
Runpersonal
personalcampaign
campaign 2,000
2,000 25%
25% complete
complete
II Run
Runmedia
mediacampaign
campaign 00 0%
0% complete
complete

Work packages to focus on

• Completion Time Analysis
– The remaining network at the end of week 20
(1-p)(original expected completion time)=(1-0.25)(20)=15

H
20+15=35
15
FINISH

27.8+9=36. .8
8
I
F 9
7.8 20+7.8=27.8

The remaining activities are expected to take

0.8 weeks longer than the deadline of 36 weeks.
 • Cost Analysis
Est
im ate Project cost Control
wo d
rk v
Budgeted Values
alu
Work Totale to Total Percent Co EstimatedA ctual Cost
dat s
Package Time e=(13 Cost Completedt OverValue Value Ocerrun
,0 0 r un
A 4 2000
0)(
0.4 100% =2,000
56 2,600 600
B 6 3,000 0)=$ 100% 00
3,000
5,2 - 5 5,000 2000
C 4 4,500 00 100% 4,500 200 =3,000 -1500
40
D 6 2,500 100% 2,500 0
5,000 2,500
E 2 500 100% 500 700 200
F 13 13,000 40% 5200 5,600 400
G 1 1,500 100% 1,500 700 -800
H 20 6,000 25% 1,500 2,000 -500
I 9 7,000 0% 0 0 0
Total 40,000 21,200 24,600 3,900
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