Critical Path Analysis

Analysis
CriticalPathAnalysis(CPA),issometimescalled
NetworkAnalysis
Itisatoolusedtoplanactivitiessothatajobcanbe
completedintheshortesttime
Itbreaksajobdownintoanumberoftasks,andlooks
atthedependencyofthem
Forexample,listtheactivitiesthatmustbecompletedinorder
tomakeacupofcoffee

Itisusedcommonlyinmanufacturingandconstruction

BusinessStudiesOnline:Slide1

Parts of the Network

Network
Anetworkconsistsof2things:
AnACTIVITY
Thisrequirestimeand/orresources
TheyaredrawnasARROWSfromlefttoright
ThelengthofthearrowisNOTimportant

ANode
Theserepresentthestartandtheendofanactivity
TheyarerepresentedbyCIRCLES
EverynetworkMUSTstartandendwithanode

BusinessStudiesOnline:Slide2

A Simple Network Diagram

Diagram
Abusinesswishestobuildanewfactory
Beforeitcandosoitneedsto:
Buytheland(ActivityAwilltake12weeks)
DrawupPlans(ActivityBwilltake3weeks)

Asimplenetworkmaybedrawntoillustratethisscenario:
A

12

BusinessStudiesOnline:Slide3

Illustrating Simultaneous Activities

Activities
Ofcourseinrealitysomeactivitiescanbecarriedout
simultaneously
Usingthepreviousexample:
Assumethatwhilstintheprocessofbuyingthelandthefirmwants
toapplyforplanningpermission(ActivityAAwilltake14weeks)

A
12
AA
14

B
3

Trydrawinganetworkusingyourinstructionsformakinga
cupofcoffee
BusinessStudiesOnline:Slide4

Developing The Network

Network
Thereareanumberofproblemswithourprevious
example:
Thereisnowayofidentifyingthenodes
Itdoesnthelpusidentifythecrucialactivities

Inordertodothisthenodescanbedevelopedinorderto
showmoreinformation:

Nodenumbers
showingorder
ofactivities
showninthe
lefthand
semicircleof
eachnode

Theright
handquarters
willbeusedto
hold
additional
information

BusinessStudiesOnline:Slide5

Calculating The Earliest Start Time

Time
Themainreasonfordrawinganetworkistoidentifythe
CRITICALactivities
Todothiswemustcalculatetheearliesttimeatwhichany
givenactivitycanstart
ThisiscalledtheEarliestStartTime(EST)oftheactivity

Itiscalculatedusingthefollowingformula:
EST=ESTofPreviousactivity+Durationofpreviousactivity

BusinessStudiesOnline:Slide6

Calculating The Earliest Start Time

Time
Thisinformationisthenplacedinthetoprighthand
ESTgoesin
quarterofthenode
topright
0
hand
ThefirstnodewillALWAYS
1
quarterof
haveanESTofzero
thenode
Usingourfirstsimpleexample,theESTforeachactivity
wouldbecalculatedasfollows:

A
+ 12 =

12

+ 3 =

15

BusinessStudiesOnline:Slide7

The EST and Simultaneous Activities

Activities
Whentherearesimultaneousactivitiestheremaybemore
thanonevaluefortheEST
A
Eg:
12
+ 12 =
B

AA
+ 14 =

17

+ 3

14

SinceActivityBisDEPENDENTonbothActivitiesAand
AA,itcannotstartuntilbotharecomplete
SowemusttaketheHIGHESTfigure
ThismeansthattheESTis14weeks

BusinessStudiesOnline:Slide8

Recap of The Earliest Start Time

Time
TheESTofthefirstactivityisalwayszero
CalculatetheESTbyworkinglefttorightacrossanetwork
Itiscalculatedusingthefollowingformula:
EST=ESTofPreviousactivity+Durationofpreviousactivity
Whenthereare2simultaneousactivitiestheHIGHEST
figureisusedastheEST

BusinessStudiesOnline:Slide9

Calculating The Latest Finishing Time

Time
Thereisonefinalpieceofinformationneededtocomplete
ournetworkdiagram
ToidentifytheCRITICALactivitieswemustalsoknowthe
latesttimeatwhichanygivenactivitymustend
ThisiscalledtheLatestFinishingTime(LFT)oftheactivity

ItiscalculatedbyworkingBACKWARDSacrossthe
networkusingthefollowingformula:
LFT=LFTatendoffollowingactivityDurationoffollowingactivity

BusinessStudiesOnline:Slide10

Calculating The Latest Finishing Time

Time
Thisinformationisthenplacedinthebottomrighthand
LFTgoesin
quarterofthenode
bottom
0
ThefirstnodewillALWAYS
righthand
1 0
quarterof
haveanLFTofzero
node
Usingourfirstsimpleexample,theLFTforeachactivity
wouldbecalculatedasfollows:

0
A
1
0 = 12

12
212

= 3

15
315

Sincetheearliesttimethisprojectcanbefinishedis15
weeksthenthisisalsothelatestwewouldliketofinishthe
project.Assuch:
TheESTandLFTofthelastnodeareALWAYSthesame
BusinessStudiesOnline:Slide11

The LFT and Simultaneous Activities

Activities
Whentherearesimultaneousactivitiestheremaybemore
thanonevaluefortheLFT
A
Eg: 2
= 12
B

0
0

AA
= 14

14
214
= 3

17
317

IfActivityAAstartsonweek2itcannotbecompletedby
week14
SowemusttaketheLOWESTfigure
ThismeansthattheLFTisweek0

BusinessStudiesOnline:Slide12

Recap of The Latest Finishing Time

Time
TheLFTofthelastactivityisalwaysequaltoitsEST
TheLFTofthefirstactivityisalwayszero
CalculatetheLFTbyworkingrighttoleftacrossanetwork
Itiscalculatedusingthefollowingformula:
LFT=LFTatendoffollowingactivityDurationoffollowingactivity

Whenthereare2simultaneousactivitiestheLOWEST
figureisusedastheLFT

BusinessStudiesOnline:Slide13

The Float
Float
AnactivitywithoutsparetimeisCRITICAL
SparetimeisreferredtoastheFLOAT
Thereare2typesoffloat,eachwithitsownformula:
FREEFLOAT

TOTALFLOAT

Thisistheamountof
sparetimeavailablefor
anactivitywithout
delayingthe
NEXTACTIVITY

Thisistheamountof
sparetimeavailablefor
anactivitywithout
delayingthe
WHOLEPROJECT

FreeFloat=
ESTatEndofactivity
(ESTatstart+Durationofactivity)

TotalFloat=
ActivitysLFT
(ActivitysEST+ActivitysDuration)

BusinessStudiesOnline:Slide14

Calculating The Float

Float
Thefreeandtotalfloatforoursimpleexamplewouldbe:
A
12
B

0
1 0

AA
14

FreeFloat=
ESTatEndofactivity
(ESTatstart+Durationofactivity)

TotalFloat=
ActivitysLFT
(ActivitysEST+ActivitysDuration)

14
2
14

17
317

Activity

Duration
(Weeks)

EST

LFT

Free
Float

Total
Float

12

14

AA

14

14

14

17

BusinessStudiesOnline:Slide15

What Does This Mean?

Mean?
Activity

Duration
(Weeks)

EST

LFT

Free
Float

Total
Float

12

14

AA

14

14

14

17

Thisdatatellsus:
ThatActivityAcanbedelayed2weekswithoutdelayingActivityB
ThatActivityAcanbedelayed2weekswithoutdelayingthewhole
project
ThatActivityAAisCRITICALanydelaywillholduptheproject
ThatActivityBisCRITICALanydelaywillholduptheproject
BusinessStudiesOnline:Slide16

Identifying The Critical Path

Path
Thecriticalpathidentifiestheactivitiesthathavenofloat
time
Itisusuallyidentifiedonadiagramasfollows:

0
1 0

A
12
AA

14
214

14
Note:
Aquickvisualcheckcanbemadethatthe
criticalpathiscorrect,sinceanynodeonthe
criticalpathshouldhaveequalESTandLFTs

B
3

17
317
DottedLine
usedto
identify
CRITICAL
PATH

Howeverthisexampleshowsthatthismethod
alonedoesnotidentifythecriticalactivities
BusinessStudiesOnline:Slide17

Question
Question
Createandcompleteanetworkdiagramtorepresentthe
followingproject:
ActivitiesA(4days)andB(5days)canstartsimultaneously
ActivitiyC(4days)canbeginonceactivitiesAandBarecomplete
ActivityD(3days)canbeginonceactivityBiscomplete
ActivityE(1day)endstheprojectandcanbeginonceactivitiesC
andDarecomplete

BusinessStudiesOnline:Slide18

Answer
Answer
Itisnotpossible
.unlessaDUMMYACTIVITYisused
Youmayhavedrawnsomethinglikethis
A
4

Thisnetworkisincorrectbecauseit
doesnotshowthatActivityCis
dependentuponbothactivitiesAandB

4
B
5

E
1

D
3
BusinessStudiesOnline:Slide19

Dummy Activities
Activities
Adummyactivityisonethatiscreatedpurelytoillustrate
dependency
Theyarenotlabelledandtakeupnotime
Theyarerepresentedbyadottedarrow:
Soourpreviousdiagramwouldbecompletedasfollows:
A
4

C
4

4
B
5

D
3

E
1

Nowcompletethe
network,andidentify
thecriticalpath

BusinessStudiesOnline:Slide20

Correct Answer To Original Question

Question
5
2
5

A
4

C
4

0
1
0

9
4 9
5
3
5

B
5

E
1

10
510

ActivitiesB,CandElie
onthecriticalpath

Activity

Duration
(Days)

EST

LFT

Free
Float

Total
Float

10

BusinessStudiesOnline:Slide21

Advantages of Using CPA

CPA
Itrequirescarefulplanning
soprojectsshouldrunsmoothly

Improvesefficiencyandcashflow
Materialscanbeorderedtoarriveonlyastheyareneeded

Ifproblemsoccurtheimplicationscanbeidentifiedquickly
Thismeansinformeddecisionscanbemade

BusinessStudiesOnline:Slide22

Disadvantages of CPA
CPA
Diagramscanbecomeunmanageable
Althoughsoftwareisavailabletohelpproducenetworks

Planwillonlyworkifrelevantstaffhavebeenconsulted
E.g.timescalesneedtoberealistic

Ganttchartstendtobepreferredsincetheyvisuallyshow
thetimespanofactivities

BusinessStudiesOnline:Slide23