Chapter Eight

Networks and Project

Management
 Introduction
Introduction
• A project is a series of activities designed to
achieve a specific objective, and which has a
definite beginning and a definite end.
• Gantt chart is a popular tool for planning and
scheduling simple projects
 Types
Types of
of Network
Network Models
Models

• Shortest-Route Algorithm
• Used for determining the shortest time, distance,
or cost from an origin to a destination through a
network.
• Minimum Spanning Tree Algorithm
• Used in determining the minimum distance (cost,
time) needed to connect a set of locations into a
single system.
• Maximal Flow Algorithm
• Used for determining the greatest amount of flow
that can be transmitted through a system in
which various branches, or connections
 Project
Project Scheduling:
Scheduling: PERT
PERT && CPM
CPM
• Network diagram is diagram of project
activities that shows sequential relationships
by use of arrows and nodes.
• An activity represents some action that
consume resources/or time.
– AOA: network diagram convention in which arrows
designate activities.
– AON: network diagram convention in which nodes
designate activities.
 4
Order
furniture

2 Furniture
setup

Locate
facilities

Remodel

1 5 6
Move in

Interview
Hire and
train

3
 Order
furniture

Locate
2
Furniture
facilities
setup

1 6

Remodel
Move in

S 5 7

Hire and
Interview train

3 4
• Preceding activities: activities which must be
accomplished before a given event can occur
• Succeeding activities: activities which cannot
be accomplished until any event has
occurred
• Concurrent activities: activities that can be
accomplished concurrently
• Dummy activities: are neither consume time
nor resources
• Event: is a point in the line and does not
consume any resource.
• Merge events
• Burst events
• Path: is a sequence of activities that leads from
the starting node to the finishing node.
• Critical Path: is the longest path; determines
expected project duration
• Critical activities: are activities on the critical path
Example: Draw a network diagram

Activity Immediate Expected

Predecessor Time
A - 4
B - 6
C A 5
D B 9
E C 3
 Deterministic
Deterministic Time
Time Estimates
Estimates
• Deterministic: time estimates that are fairly
certain.
• Probabilistic: estimates of times that allow for
variation.

• Example: Given the precedence diagram

determine
• The length of each path
• The critical path
• The expected length of the project
• Amount of slack time for each path
• Amount of slack time for each activity
 6 weeks

4
d er
Or niture
fur
3 weeks

8 weeks 2

F ur p
set
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te Rem
o ca ties o de

re
L ili l
c
fa 11 weeks
Move in

1 5 6
1 week

In
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3
 Rules
Rules for
for the
the Computing
Computing Algorithm
Algorithm
• Forward Pass:
• For each beginning activity: ES = 0
• For each activity: ES + Activity time = EF
• For the following activity: ES = EF of preceding activity
• If an activity has multiple immediate preceding
activities, set its ES equal to the largest EF of its
immediate predecessor
• Backward Pass:
• Use the largest EF as the LF for all ending activities
• For each activity: LS = LF - Activity time
• For the preceding activity: LF = LS of following activity
• If an activity has multiple immediate following
activities, set the activity’s LF equal to the smallest
LS of the following activities
 Probabilistic
Probabilistic Time
Time Estimates
Estimates
• The probabilistic approach involves three time
estimates for each activity instead of one:
– Optimistic time: the length of time required under
optimum conditions
– Pessimistic time: the length of time required under
worst conditions.
– Most likely time: the most probable amount of time
required
Example
Example
 • Optimisti • Pessimisti
• Most likely
c c
• time
• time • time

• 2-4-6
•b

•2 •c
- 4

-3
- 3
•1 a

-5
•
• 3-4-5 • 3-5-7 • 5-7-9
•d •e •f
•2 g

4-6
-
-3

3
• •i
-6
•

• 4-6-8
•h
 Required
Required
• Compute the expected time for each activity
and the expected duration for each path
• Indentify the critical path
• Compute the variance for each activity and
the variance for each path
• What is the probability that the project can
be completed within 17 months of its start?
• What is the probability that the project will
be completed 15 months of its start?
• What is the probability that the project will
not be completed 15 months of its start?
 Time-Cost
Time-Cost Trade
Trade Offs:
Offs: Crashing
Crashing
• It is possible to reduce the length of a project
by injecting additional resources
• A project manager may be able to shorten a
project: by realizing a savings on indirect
project costs by increasing direct expenses to
speed up the project.
• The objective of project crash cost analysis is
to reduce the total projected completion time
while minimizing the cost of crashing.
• A manager needs the following information:
• Regular time and crash time estimates
• Regular (normal) cost and crash cost estimates
• A list of activities that are on the critical path
 General
General Procedure
Procedure for
for Crashing
Crashing

• Obtain estimates of regular and crash times

and costs for each activity.
• Determine the lengths of all paths and path
slack times
• Determine which activities are on the
critical path.
• Crash critical activities, in order of
increasing costs, as long as crashing costs
do not exceed benefits.
 Example:
Example:
• Using information below develop an optimum time cost
solution. Assume that indirect project costs are birr
1000 per day.
End of
Chapter