Network Analysis

Network is a graphical representation of all the Activities and Events arranged in

a logical and sequential order.
Network analysis plays an important role in project management.
A project is a combination of interrelated activities all of which must be executed
in a certain order for its completion.
Activity: Activity is the actual performance of the job. This consumes resources (Time,
human resources, money, and material)
Event: An event refers to start or completion of a job. This does not consume any
resources.

Analyzing network, the planning, scheduling and control of a project becomes

easier.
PERT and CPM are the two most popular network analysis technique used to
assist managers in planning and controlling large scale projects.
PERT- (Programme Evaluation Review Technique)
CPM - (Critical Path Method)

Applications: Construction of a Residential complex,

Commercial complex,
Petro-chemical complex
Ship building
Satellite mission development
Installation of a pipe line project etc...
Historical Evolution.
Before 1957 there was no generally accepted procedure to aid the management of a
project. In 1958 PERT was developed by team of engineers working on a Polaris Missile
programme of the navy. This was a large project involved 250 prime contractors and
about 9000 job contractors. It had about 19 million components. In such projects it is
possible that a delay in the delivery of a small component might hold the progress of
entire project. PERT was used successfully and the total time of completion was reduced
from 7 years to 5 years.
In 1958 Du Pont Company used a technique called Critical Path Method (CPM) to
schedule and control a very large project like overhauling of a chemical plant, there by
reducing the shutdown period from 130hrs to 90 hrs saving the company 1 million dollar.
Both of these techniques are referred to as project scheduling techniques.

Differences between PERT & CPM

PERT

CPM

1. It is a technique for planning

1. It is a technique for planning
scheduling & controlling of projects scheduling & controlling of projects
whose activities are subject to
whose activities not subjected to
uncertainty in the performance
any uncertainty and the
time. Hence it is a probabilistic
performance times are fixed. Hence
model
it is a deterministic model
2.It is an Event oriented system

2. It is an Activity oriented system

3.Basically does not differentiate

critical and non-critical activities

Differentiates clearly the critical

activities from the other activities.

4. Used in projects where resources

(men, materials, money) are always
available when required.
5. Suitable for Research and
Development projects where times
cannot be predicted

4. Used in projects where overall

costs is of primarily important.
Therefore better utilized resources
5.Suitable for civil constructions,
installation, ship building etc.

Rules for drawing the network diagrams.

1

In a network diagram, arrows represent the

activities and circles represent the events.
The tail of an arrow represents the start of an
activity and the head represent the completion
of the activity.

The event numbered 1 denotes the start of the

project and is called initial event.
Event carrying the highest number in the network
denotes the completion of the project and is called
terminal event.

Each defined activity is represented by one and only

arrow in the network.
Determine which operation must be completed
immediately before other can start.
Determine which other operation must follow the
other given operation.

The network should be developed on the basis of

logical, analytical and technical dependencies
between various activities of the project.

The basic network construction Terminology used.

Network representation: There are two types of
systems
AOA system
(Activity on Arrow
system)

AON system
(Activity on Node
system )

In this activities are

represented by an
arrows.

In this method activities

are represented in the
circles.

Problem 1.
Construct an arrow diagram for the following project.
Activities

Relationship

A
B
C

Precedes B,C
Precedes D,E
Precedes D

D
E
F

Precedes F
Precedes G
Precedes G

E
B
G
A
F

C
D

Problem 2.
Construct an arrow diagram for the following project.
Job

Immediate
predecessor

Duration

14 Days

3 Days

7 Days

4 Days

B,D

10 Days

E
10

14

4
C
7

Key

Job
Duration

Problem 3.
Construct an arrow diagram for the following project.
Job

Immediate predecessor

A,B

C,E

C
B
F
A

E
D

Problem 4.
Construct an arrow diagram for the following project.
Activity

Predecessor

A,B

B,C

A
B
C

Problem 5.
Construct an arrow diagram for the following project.
Activity
A

Predecessor
-

B
C

D
E

A,B
B,C

A,B,C

A
B

F
C

Problem 6.
Draw the PERT network for the following project
Event A is followed by events B & C
Event D is preceded by events B & C
Event H is the successor to event E
Event E is the successor to event B
Event F is the successor to event D & G
Event C is the predecessor to event G
Event J is preceded by events F,G, & H

E
B
H
A

D
F
C
G

10

CRITICAL PATH
Meaning: The longest path in a project network which determine the duration of the
project is known as critical path.

Determination of Critical Path

3

8
5

5
3

1
6

3
4

Step 1.List all the possible sequences from start to finish

Step 2.For each sequence determine the total time required from start to
finish.
Step 3.Identify the longest path (Critical Path)

Step 1. List all the possible sequences from start to finish

Path A : 1 2 5 8
Path B : 1 3 5 8
Path C : 1 3 6 7 8
Path D : 1 3 4 7 8
Path E : 1 3 4 6 7 8
Step 2.For each sequence determine the total time required from
start to finish.
Path A : 2 + 3 + 4 = 9 days
Path B : 4 + 5 + 4 = 13 days
Path C : 4 + 5 + 6 + 1 = 16 days
Path D : 4 + 2 + 3 + 1 = 10 days
Path E : 4 + 2 + 2 + 6 + 1 = 10 days

11

Step 2.For each sequence determine the total time

required from start to finish.
Path A : 2 + 3 + 4 = 9 days
Path B : 4 + 5 + 4 = 13 days
Path C : 4 + 5 + 6 + 1 = 16 days
Path D : 4 + 2 + 3 + 1 = 10 days
Path E : 4 + 2 + 2 + 6 + 1 = 10 days
Step 3.Identify the longest path (Critical Path)
Path C : 4 + 5 + 6 + 1 = 16 days
Path C : 1 3 6 7 8

Determination of Critical Path

3

8
5

5
3

1
6

3
4

Step 1.List all the possible sequences from start to finish

Step 2.For each sequence determine the total time required from start to
finish.
Step 3.Identify the longest path (Critical Path)

12

Float (Slack)
Float (Slack ) refers to the amount of time by which a particular event or an
activity can be delayed without affecting the time schedule of the network.
Float (Slack)
Float (Slack) is defined as the difference between latest allowable and the earliest
expected time.
Event Float/Slack = LS ES
Where LS = Latest start time
ES = Early start time.
Earliest start : Denoted as ES
Earliest start time is the earliest possible time by which the activity can be started.
Early finish time : Denoted as EF
Early finish time is the earliest possible time by which the activity can be completed.
Latest start time : Denoted as LS
Latest start time is the latest possible time by which the activity can be started
Late finish time : Denoted as LS
Late finish time is the latest possible time by which the activity can be completed
Total float (TF) / Total slack (TS)
Total float of the job is the differences between its Late start and Early start or Late
finish and Early finish
i.e.
TF( CA) = LS (CA) - ES (CA)
Or
TF( CA) = LF (CA) - EF (CA)
CA = Current activity
Free float (FF)
Free float is the amount of time a job can be delayed without affecting the Early start
time of any other job.
FF(CA) = ES(SA) EF (CA)
CA = Current Activity
SA = Succeeding Activity
Independent Float (IF)
Independent Float is the amount of time that can be delayed without affecting either
predecessor or successor activities.
IF = ES(SA) LF(PA) - Duration of CA
ES = Early Start
LF = Late Finish
SA = Succeeding Activity
PA = Preceding Activity
CA = Current Activity

13

Example 1
Construct the Network for the following
Project and determine the following
i) Critical Path
ii) ES,EF,LS,LF
iii) TF,FF

Activity

Duration

1-2

14

1-4

2-3

2-4

3-5

4-5

5-6

10

Construction of the Network and Determination Critical Path

C

3
F

B
5

10

G 0

14
D
2

14

Determination of TF and FF

A(
0,
14
)(0
(0
)
,1
4)
(0
)

D(14,21)(0)
2

7(14,21)(0)

F(25,35)(0)
5

E(21
,25)(
0)
4(21
,25)
(0)

14

C(14
,17)
(8)
3(2
2,25
)(8)

0(22,22)

G(14,14)

1)
(1
)
9)
3
0,
)(1
2
B(
,2
19
3(

TF( CA) = LS (CA) - ES (CA)

Key

FF(CA) = ES(SA) EF (CA)

10(25,35)(0)

Job (ES,EF)(FF)
Duration (LS,LF)(TS)

IF = ( ES(SA) LF(PA)) - Duration of CA

Activity Duration

ES

EF

LS

LF

TF

FF

1-2

14

14

14

1-4

19

22

19

11

2-3

14

21

14

21

2-4

14

14

22

22

3-5

21

25

21

25

4-5

14

17

22

25

5-6

10

25

35

25

35

15

Example 2
Construct the Network for the following
Project and determine the following
i) Critical Path
ii) ES,EF,LS,LF
iii) TF,FF
Activity

Duration

1-2

2-3

2-4

3-5

3-6

4-6

4-7

5-8

6-8

7-8

16

(0, 2)(0)
1

(2,

2(0, 2)(0)

5(2
,

7)(
0)
7)(
0)

(9
,1
3)
(0
4(1
)
6,
20
)(7
)

)
5)(0
(2,
(3)
, 8)
3(5

5
(9,1
7)(0
0)
(
)
)
8
(12
,9
3)
,20
(
(5
)
)
2
(
3
)
,1
4(8
3
(5,
)
6)(
20)(0
1(1
7)
(13,
2,
(0)
13
, 20)
)(7
)
7(13
6
0)
) ( 0)
3
(
,1
(7 , 13)
7 (7, 9)(0)
(
6
4
7
2(14,16)(7)
(ES,EF)(FF)
Key
Duration (LS,LF)(TS)

Activity

Duration

ES

EF

LS

LF

TF

FF

1-2

2-3

2-4

3-5
3-6

4
1

5
5

9
6

8
12

12
13

3
7

0
7

4-6

13

13

4-7
5-8

2
8

7
9

9
17

14
12

16
20

7
3

0
0

6-8

13

20

13

20

7-8

13

16

20

17

In PERT model, 3 time values are associated

with each activity. They are
i) Optimistic time = to
ii) Pessimistic time = tp
iii) Most likely time = tm
These three times provide a measure of uncertainty associated with that activity
Optimistic Time: This is the shortest possible time in which the activity can be finished.
It assumes that every thing goes well.
Pessimistic Time: This is the longest time that an activity could take. It assumes that
every thing goes wrong.
Most likely Time: It is the estimate of the normal time that an activity would take. This
assumes normal delays.
Expected Time ( te):
te can be calculated by the following formula
te = (to + 4tm + tp) / 6
Example.
If a job has to = 5 days, tp = 17 days, tm = 8 days
Then Expected time for the job would be
te = (to + 4tm + tp) / 6
= (5 + 4 x 8 + 17) / 6
= 9 days
Variability of activity times
Standard deviation and Variance are commonly used in statistics to measure the
variability of number.
In PERT model, to measure the variability of an activity time duration standard deviation
and variance are used.
A large standard deviation represents high variability and vice-versa.
Calculation of Standard Deviation and Variance
Variance = (Standard deviation )2
Standard deviation =(t p t o) / 6
Expected length of the Critical Path = te of all the activities along the Critical Path
Probability of completing the project within a given date
Z = (TS TE ) /
Where TS = Scheduled time for project completion
TE = Expected time for the project completion
= Standard deviation for the Network
Network = Sum of variances along the
Critical Path
= ( i-j )2
Where i-j is the variance of a activity i-j along the critical path

18

Example 1
Construct the Network for the following project and
calculate the probability of completing the project in 25 days
Activity

to

tm

tp

1-2

10

1-3

12

2-3

2-4

3-4

3-5

4-6

10

14

5-6

1.Construction of the Network

2-3-4

4-

8-

12

2-4-6

2-

10
6-

-0

6-

10

-0

1-

3-6-9
3

4-

5
3-

19

2. Calculation of Expected time for all the activities

2-3-4

6
1

4-

8-

12

2-4-6
4

6
2-

-10

-0

6-

410
10

-0

0
1-

3-6-9
3

-5
3

5
6

Expected Time ( te):

te can be calculated by the following formula
te = (to + 4tm + tp) / 6

3. Determination of Critical Path

2-3-4

6
1

4-

8-

12

2-4-6
4

6
2-

-10

-0

6-

410
10

-0

0
1-

3-6-9
3

-5
3

5
6

Key

to - tm - tp
te

Expected Duration of the project Te = 20 days

20

Activity

to

tm

tp

Critical
activities

2 = ((t p t o) / 6)2

1-2

10

1-2

1.78

1-3

12

2-3

2-3

2-4

3-4

3-4

3-5

4-6

10

14

4-6

5-6

0.44

1.78

2 = 4.00

Network = Sum of variances along the

Critical Path
= (Network )2
=4
=2
Probability of completing the project within a given date
Z = (TS TE ) /
Where TS = Scheduled time for project completion
TE = Expected time for the project completion
= Standard deviation for the Network
= (25 20) / 2
= + 2.5
From the Normal distribution Table, we get the probability of completing the project in
25 days is 99.4%

21

Example 2.
The following table lists the jobs of a network along with their
time estimates.
Activity

to

tm

tp

1-4

27

1-3

15

1-2

12

30

4-5

07

3-5

27

3-6

08

5-6

12

30

2-6

19

28

a) Draw the project network.

b) What is the probability that the job will be completed in 35 days?
c) What due date has 90% chance of being met?

1.Construction of the Network

2

4-1
9-

30
26 -1
3 - 6 - 15

-9

2-5-8

3-

-2
7
4

28

9-

27

6-

12

0
-3

22

2. Calculation of Expected time for all the activities

2

4-1
928
18

30
21
6
14
3 - 6 - 15

2-5-8

3-

-9

11 - 27

9-

11

27

1-4-7

2-1

30
14

Expected Time ( te):

te can be calculated by the following formula
te = (to + 4tm + tp) / 6

3. Determination of Critical Path

2

4-1
928
18

30
21
6
14
3 - 6 - 15

2-5-8

3-

-9

11 - 27

11
4

9-

27

1-4-7
4

Key

2-1

30
14

to - tm - tp
te

Expected Duration of the project Te = 32 days

23

As there are two Critical Paths, the path which gives more variance(2) is taken as
Critical Path
Path A
Activity

2 = ((t p t o) / 6)2

1-2

((30 6)/6)2

16

2-6

((28 4)/6)2

16
2 = 32.00

Path B
Activity

2 = ((t p t o) / 6)2

1-3

((15 3)/6)2

3-5

((27 3)/6)2

16

5-6

((30 6)/6)2

16
2= 36.00

= 2 = 36

=6

Therefore the Critical Path is 1 - 3 - 5 - 6

b)
Probability of completing the project within a given date
Z = (TS TE ) /
Where TS = Scheduled time for project completion
TE = Expected time for the project completion
= Standard deviation for the Network
= (35 32) / 6
= + 0.5
From the Normal distribution Table, we get the probability of completing the project in
35 days is 69.15%
c)
The due date for 90% chance of being met.
Probability of completing the project within a given date
Z = (TS TE ) /
The value of Z from the table for a 90% probability is +1.28
TS = ? (to be calculated) ,TE = 32, = 6
i.e. 1.28 = (TS 32) / 6
TS = 39.68 days

24

CPM Model
In 1958 Du Pont Company used a technique called Critical Path Method (CPM) to
schedule and control a very large project like overhauling of a chemical plant, there by
reducing the shutdown period from 130hrs to 90 hrs saving the company 1 million dollar.
Both of these techniques are referred to as project scheduling techniques.

Direct cost

Cost considerations in PERT / CPM

The total cost of any project comprises of two costs.
Direct cost - material cost, manpower loading
Indirect cost - overheads such as managerial services, equipment rent, building
rent etc.

Crash

Normal

Indirect cost

Job duration
Shorter the duration higher will be the Direct expenses

Crash

Normal

Job duration

Shorter the duration lesser will be the Indirect expenses

25

Cost

Total cost

Dire
ct c
ost
ost
ct c
e
r
i
Ind

Crash

Optimum

Normal

Job duration

Example 1.
Find the lowest cost and optimum cost schedule for the following project, given the over
head expenses as Rs.45/-day.
Activity

Normal duration

Crash
duration

Cost of crashing
per day

1-2

Rs.40

2-3

Rs.40

2-4

Rs.10

3-4

Rs.20

26

1.Construction of the Network

7-3

10

3 -1

4-

20

40

-2

40
3
Normal duration Crash duration

Key
Cost of crashing per day in Rs.

1.Determination of Critical path

7-3

10

3 -1

4-

20

40

-2

40
3
Normal duration Crash duration

Key
Cost of crashing per day in Rs.

27

Step 1.
3 -1
1

4-2

5-2

2
40

3
7-3

12 days

20

40

10

Activity
crashed

Days
saved

Project
duration

Cost of crashing

Total
cost of
crashin
g

Over
Head cost

Total
cost

None

3-4

12

-Nil-

-Nil-

45 x 12

540

10

20 x 2 =40

40

45 x 10

490

3-4 &2-4
1-2

20x1+10x1 =30

70

45 x 9

475

40 x 2 =80

150

45 x 7

2-3&2-4

465

40x2+10x2 =100

250

45 x 5

475

Step 2.
3 -1
1

4-2

3-2

2
40

20

40
7-3

10 days

10

Activity
crashed

Days
saved

Project
duration

Cost of crashing

Total
cost of
crashin
g

Over
Head cost

Total
cost

None

12

-Nil-

-Nil-

45 x 12

540

3-4

10

20 x 2 =40

40

45 x 10

3-4 &2-4

20x1+10x1 =30

70

45 x 9

475

490

1-2

40 x 2 =80

150

45 x 7

465

2-3&2-4

40x2+10x2 =100

250

45 x 5

475

28

Step 3.
3 -1
1

4-2

2-2

2
40

20

40
6-3

9 days

10

Activity
crashed

Days
saved

Project
duration

Cost of crashing

Total
cost of
crashin
g

Over
Head cost

Total
cost

None

3-4

12

-Nil-

-Nil-

45 x 12

540

10

20 x 2 =40

40

45 x 10

490

3-4 &2-4
1-2

20x1+10x1 =30

70

45 x 9

475

40 x 2 =80

150

45 x 7

2-3&2-4

460

40x2+10x2 =100

250

45 x 5

475

Step 3.
3 -1
1

4-2

2-2

2
40

20

40
6-3

9 days

10

Activity
crashed

Days
saved

Project
duration

Cost of crashing

Total
cost of
crashin
g

Over
Head cost

Total
cost

None

12

-Nil-

-Nil-

45 x 12

540

3-4

10

20 x 2 =40

40

45 x 10

490

3-4 &2-4

20x1+10x1 =30

70

45 x 9

475

1-2

40 x 2 =80

150

45 x 7

460

2-3&2-4

40x2+10x2 =100

250

45 x 5

475

29

Step 4.
1 -1
1

4-2

2-2

2
40

20

40
6-3

7 days

10

Activity
crashed

Days
saved

Project
duration

Cost of crashing

Total
cost of
crashin
g

Over
Head cost

Total
cost

None

12

-Nil-

-Nil-

45 x 12

540

3-4

10

20 x 2 =40

40

45 x 10

490

3-4 &2-4

20x1+10x1 =30

70

45 x 9

475

1-2

40 x 2 =80

150

45 x 7

460

2-3&2-4

40x2+10x2 =100

250

45 x 5

475

Step 5.
3 -1
1

2-2

2-2

2
40

20

40
4-3

5 days

10

Activity
crashed

Days
saved

Project
duration

Cost of crashing

Total
cost of
crashin
g

Over
Head cost

Total
cost

None

3-4

12

-Nil-

-Nil-

45 x 12

540

10

20 x 2 =40

40

45 x 10

490

3-4 &2-4
1-2

20x1+10x1 =30

70

45 x 9

475

40 x 2 =80

150

45 x 7

2-3&2-4

460

40x2+10x2 =100

250

45 x 5

475

30