05-11-2019

Developing a Project Plan

WHERE WE ARE NOW

6–2

1
 05-11-2019

DEVELOPING THE PROJECT PLAN

The Project Network
A flow chart that graphically depicts the sequence, interdependencies,
and start and finish times of the project job plan of activities that is the
critical path through the network.
o Provides the basis for scheduling labor and equipment.
o Enhances communication among project participants.
o Provides an estimate of the project’s duration.
o Provides a basis for budgeting cash flow.
o Identifies activities that are critical.
o Highlights activities that are “critical” and can not be delayed.
o Help managers get and stay on plan.

6–3

WBS/WORK PACKAGES TO NETWORK

6–4

2
 05-11-2019

WBS/WORK PACKAGE TO NETWORK (CONT’D)

6–5

Network Terminology:
Activity:
A Project consists of several activities which are carried out in a
specified sequence.
Activity is the actual performance of a task which consumes resources
and time.
Activity is shown by arrow and it begins and ends with an event.
e.g. Purchase Machinery, Install Machinery Activity
1 2
Event:
An event is a specific instant of time which marks the start and end of an
activity.
It doesn’t consume resources and time.
It is represented by circle and the event number is written within the
circle.
e.g. Start the motor, Loan approved.
6

3
 05-11-2019

Network Analyses:
Critical Path Method (CPM) Analysis: It is used for the activities
having deterministic or Certain completion times (One time
estimate)
Program Evaluation Review Technique (PERT) Analysis: It is
used for the activities having probabilistic or Uncertain completion
times (Three time estimate)

Steps for CPM Analysis:

STEP 1: Draw the Network Diagram.
STEP 2: Forward Pass Calculations:
 Compute Early Start Time (EST) and Early Finish Time (EFT) for each activity.
STEP 3: Backward Pass Calculations:
 Compute Late Start Time (LST) and Late Finish Time (LFT) for each activity.
STEP 4: Compute Total Float for each activity
STEP 5: Find out the Critical Activities.
STEP 6: Find out the Critical Path
STEP 7: Compute the Project Duration.
STEP 8: Compute the Free & Independent floats for each activity.

4
 05-11-2019

Example: CPM Analysis

New Product Launch Project
Activity Activity Description Immediate Time
Code Predecessors (weeks)
A Organize sales office None 6
B Hire sales people A 4
C Train sales people B 7
D Select advertising agency A 2
E Plan advertising campaign D 4
F Conducting advertising campaign E 10
G Design package None 2
H Set up packaging facilities G 10
I Package initial stocks H,J 6
J Order stock from manufacturer None 13
K Select distributors A 9
L Sell to distributors C,K 3
M Ship stock to distributors I,L 5
9

STEP 1 :Draw Network Diagram

Types of Diagrams
Activity on Arc (AOA) Diagram: 1 A 2 B 3
An activity is represented by an “Arrow”.
The tail end of the Arrow represents the start and the head of the
Arrow represents finish or end of the activity.
The description of activity is written just above the arrow.
Activity on Node (AON) Diagram:
A B
An activity is represented by circle or Node.
Arrows are shown only the dependency relationship between the
activity nodes.
Dummy activities can be avoided in this diagram

10

5
 05-11-2019

STEP 1 :Draw Network Diagram

AOA Diagram AON Diagram
Simple
1 A 2 B 3 A B
Events

1 A A
Merge C
3 4 C
Events B
2 B

B 3 B
Burst A
1 2 C A
Events
4 C

1 A C 4 A C
Combined
3
Events B D
2 5 B D 11

STEP 1 :Draw Network Diagram

Dummy activity:
Dummy activities are required only for the purpose of explicitly
depicting certain activity dependencies which can not be shown
otherwise.
A dummy activity is one which doesn’t consume any resources
and time.
Dummy Activities are shown by dotted line.

12

6
 05-11-2019

STEP 1 :Draw Network Diagram

AON Diagram AOA Diagram

3
B
B
Dummy
A D
C A C
1 2 4 D 5

Need for Dummy: When two or more activities have

common Tail and Head events or have common
predecessors and successors.
Dummy activity is used mostly in AOA diagram.

13

STEP 1 :Draw Network Diagram

Information Required to draw Network Diagram
Project activities:
A project is to be broken up into its constituent activities for detailed
planning and scheduling.
Activity Times:
If activity time is certain and known then it is shown by one time
estimate (CPM Method).
If not known then expected time is found using Three time estimates
(PERT Method).
Dependency relationship among activities:
Which is shown by immediate predecessors or successors.

14

7
 05-11-2019

STEP 1 : Draw Network Diagram

H,10 I,6
G,2

St J,13 B,4 C,7 L,3 M,5 Fn

A,6 K,9

D,2 E,4 F,10

15

STEP 2: Forward Pass Calculations

Early Start Time (EST) of activity j,
ESj = Max of EFis
Where ‘i’ refers to the immediate predecessors.
Early Finish Time (EFT) of activity j,
EFj = ESj + tj
Where ‘tj’ refers to duration of activity j.

16

8
 05-11-2019

STEP 2: Forward Pass Calculations

ESM = Max (EFI, EFL)
[2, 12] [13, 19]
[0, 2] = Max(19,20) =20
H,10 I,6
G,2 EFM= ESJ + tJ
= 20+5 =25
[0, 0] [0, 13] [6, 10] [10, 17] [17, 20] [20, 25] [25, 25]
St J,13 B,4 C,7 L,3 M,5 Fn

[6, 15]
[0, 6]

A,6 K,9
[6, 8] [8, 12] [12, 22]

D,2 E,4 F,10

17

STEP 3: Backward Pass Calculations

Late Finish Time (LFT) of activity j,

LFj = Min of LSks
Where ‘k’ refers to the immediate successors.
Late Start Time (LST) of activity j,
LSj = LFj – tj
Where ‘tj’ refers to duration of activity j.

18

9
 05-11-2019

STEP 3: Backward Pass Calculations

[2, 12] [13, 19]
[0, 2]
H,10 I,6
G,2
[4, 14] [14, 20]
[2, 4]
[0, 0] [0, 13] [6, 10] [10, 17] [17, 20] [20, 25] [25, 25]
St J,13 B,4 C,7 L,3 M,5 Fn
[0, 0] [1, 14] [6, 10] [10, 17] [20, 25] [25, 25]
[17, 20]
[0, 6] [6, 15]

LSA = A,6 K,9

LFA – tA [0, 6] [6, 8] [8, 17] [8, 12] [12, 22]
=6–6=0 F,10
LFA = D,2 E,4
[15, 25]
Min(LSB, LSK, LSD) [9, 11] [11, 15]
= Min (6,8,9) = 6

STEP 4: Compute “Total Float”

Meaning : “Total Float” of a given activity ‘j’ is the amount of time by
which that activity ‘j’ can be delayed without delaying the Project
completion.
Total Float of activity j,
TFj = LSj – ESj OR TFj = LFj – EFj
Where, ESj: Early Start Time, EFj: Early Finish Time, LSj: Late Start Time, LFj:
Late Finish Time of activity j.

20

10
 05-11-2019

STEP 4: Compute Total Float

[ES, EF]
[2, 12] [13, 19] TFI = LSI – ESI = 14 – 13 = 1
[0, 2] [2]
[2] H,10 I,6 [1] OR
G,2 TFI = LFI – EFI = 20 – 19 = 1
[4, 14] [14, 20]
[2, 4] [LS, LF]
[0, 0] [0, 13] [6, 10] [10, 17] [17, 20] [20, 25] [25, 25]
[0]
St J,13 [1] B,4 [0] C,7 [0] L,3 [0]
M,5 Fn[0]

[0, 0] [1, 14] [6, 10] [10, 17] [20, 25] [25, 25]
[17, 20]
[0, 6] [6, 15]
[2]
[0]
A,6 K,9
[6, 8] [8, 17] [8, 12] [12, 22]
[0, 6]
[3]
D,2 [3] E,4 [3] F,10
[9, 11] [11, 15] [15, 25]

STEP 5: Find out the Critical Activities.

These activities have Zero or Negative Float.
These activities are called critical because if any of such
activity is delayed then entire project is delayed by the same
amount of time.
If Project Manager wants to reduce the project duration then
s\he has to speed up the critical activities.

22

11
 05-11-2019

STEP 5: Find out the Critical Activities.

[ES, EF]
[2, 12] [13, 19]
[0, 2] [2] j,tj [TF]
[2] H,10 I,6 [1]
G,2 [LS, LF]
[4, 14] [14, 20]
[2, 4]
[0, 13] [6, 10] [10, 17] [17, 20] [20, 25] [25, 25]
[0]
St J,13 [1] B,4 [0] C,7 [0] L,3 [0]
M,5 [0]
Fn
[1, 14] [6, 10] [10, 17] [20, 25] [25, 25]
[17, 20]
[0, 6] [6, 15]
[2]
[0]
A,6 K,9
[6, 8] [8, 17] [8, 12] [12, 22]
[0, 6]
[3]
D,2 [3] E,4 [3] F,10
[9, 11] [11, 15] [15, 25] 23

STEP 5: Find out the Critical Activities.

[ES, EF]
[2, 12] [13, 19]
[0, 2] [2] j,tj [TF]
[2] H,10 I,6 [1]
G,2 [LS, LF]
[4, 14] [14, 20]
[2, 4]
[0, 13] [6, 10] [10, 17] [17, 20] [20, 25] [25, 25]
[0]
St J,13 [1] B,4 [0] C,7 [0] L,3 [0]
M,5 [0]
Fn
[1, 14] [6, 10] [10, 17] [20, 25] [25, 25]
[17, 20]
[0, 6] [6, 15]
[2]
[0]
A,6 K,9
[6, 8] [8, 17] [8, 12] [12, 22]
[0, 6]
[3]
D,2 [3] E,4 [3] F,10
[9, 11] [11, 15] [15, 25] 24

12
 05-11-2019

STEP 6:Find out the Critical Path

Critical path is nothing but the path made up of the Critical
activities.
A Project may have more than one critical paths.
Project Manager focuses more on critical path and critical
activity for the timely completion of the project.
It is shown generally by red lines on Network Diagram.

25

STEP 5: Find out the Critical Activities.

[ES, EF]
[2, 12] [13, 19]
[0, 2] [2] j,tj [TF]
[2] H,10 I,6 [1]
G,2 [LS, LF]
[4, 14] [14, 20]
[2, 4]
[0, 13] [6, 10] [10, 17] [17, 20] [20, 25] [25, 25]
[0]
St J,13 [1] B,4 [0] C,7 [0] L,3 [0]
M,5 [0]
Fn
[1, 14] [6, 10] [10, 17] [20, 25] [25, 25]
[17, 20]
[0, 6] [6, 15]
[2]
[0]
A,6 K,9
[6, 8] [8, 17] [8, 12] [12, 22]
[0, 6]
[3]
D,2 [3] E,4 [3] F,10
[9, 11] [11, 15] [15, 25] 26

13
 05-11-2019

STEP 7: Find out Project Duration

The expected project duration is the amount of time required to
complete the project if everything goes well as per the plan.
It is computed as Sum of duration of critical activities on a given
critical path.
i.e. T = Σ ti
Where i = activity ‘i’ on a given critical path.

27

STEP 7:Find out Project Duration.

It is computed as Sum of duration of critical activities on a given
critical path.
T = tA + tB + tC + tL + tM
T=6+4+7+3+5
T = 25 Weeks

28

14
 05-11-2019

Activity on Arc (AOA Diagram)

ES, EF
3 H, 10 2,12 I, 6 13,19 LS, LF
4,14 4 9
14,20

1
25 Wks.
5
10

K, 9 7
2

E, 4
6 8
29

STEP 8: Compute “Free Float”

“Free Float” of a given activity ‘j’ is the amount of time by which
that activity ‘j’ can be delayed without delaying the succeeding
activity.
Free Float can occur for only those activity whose head events are
merge or burst or combined events.
Free Float of activity j,
FFj = ESk – EFj
where k refers to succeeding activity of activity j.

30

15
 05-11-2019

Implications of suggestions
Activity Activity Description Immediate Time
Code Predecessors (weeks)
A Organize sales office None 6
B Hire sales people A 4
C Train sales people B 7
D Select advertising agency A 2
E Plan advertising campaign D 4
F Conducting advertising campaign E 10
G Design package None 2
H Set up packaging facilities G 10
I Package initial stocks H,J 6
J Order stock from manufacturer None 13
K Select distributors A 9
L Sell to distributors C,K 3
M Ship stock to distributors I,L 5
N Visit of sales people to plant 1
31
O Display material to distributors 2

PRACTICAL CONSIDERATIONS
Network Logic Errors
Activity Numbering
Use of Computers to Develop
Networks
Calendar Dates
Multiple Starts and Multiple
Projects

6–32

16
 05-11-2019

EXTENDED NETWORK TECHNIQUES

TO COME CLOSE TO REALITY
Laddering
Activities are broken into segments so the following
activity can begin sooner and not delay the work.
Lags
The minimum amount of time a dependent activity
must be delayed to begin or end.
o Lengthy activities are broken down to reduce the delay
in the start of successor activities.
o Lags can be used to constrain finish-to-start, start-to-start,
finish-to-finish, start-to-finish, or combination relationships.

6–33

EXAMPLE OF LADDERING USING

FINISH-TO-START RELATIONSHIP

6–34

17
 05-11-2019

USE OF LAGS
Finish-to-Start Relationship

Start-to-Start Relationship

6–35

USE OF LAGS
(CONT’D)

Use of Lags to Reduce

Project Duration

6–36

18
 05-11-2019

USE OF LAGS
(CONT’D)

Finish-to-Finish
Relationship

Start-to-Finish
Relationship

Combination
Relationship

6–37

NETWORK USING LAGS

6–38

19
 05-11-2019

HAMMOCK ACTIVITIES
Hammock Activity
Spans over a segment of a project.
Has a duration that is determined after the network plan is drawn.
Is used to aggregate sections of the project to facilitate getting the right
amount of detail for specific sections of a project.
Is very useful in assigning and controlling indirect project costs.

6–39

HAMMOCK ACTIVITY EXAMPLE

6–40

20
 05-11-2019

GREENDALE STADIUM CASE

6–41

PERT Analysis
PERT stands for Program Evaluation Review Technique
It was used in designing and producing major weapons
systems for the U.S. Military Establishment.
It is helpful in the projects where activities are subjected to
higher degree of Uncertainty in completion time thus It is
difficult to find the reasonable estimate for activity time due
to such uncertainty.
PERT estimates the expected activity time using three time
estimates using Beta Probability distribution.

42

21
 05-11-2019

Comparison between CPM and PERT

CPM PERT
A deterministic model with well- A probabilistic model with
known activity (single) times based uncertainty in activity duration.
upon past experience.
CPM has only one time estimate. PERT has three time estimates.
Expected time is calculated from to, tm
and tp.
An activity-oriented system. An event-oriented approach.
Activity on Node (AON) diagram is Activity on Arc (AOA) diagram is
used to represent such Project. used to represent such Project.
CPM terminology employs words PERT terminology uses words like
like nodes and float. events and slack.
The use of dummy activities is not The use of dummy activities is
necessary. required for representing the proper
sequencing. 43

Comparison between CPM and PERT

CPM PERT
CPM marks critical activities. PERT basically does not demarcate
between critical and non-critical
activities.
CPM is employed to those projects PERT finds applications in Projects
where minimum overall cost is of where resources (Men, Materials
primary importance. There is better and specially Money) are always
utilization of resources. made available as and when
required.
Suitable for the problems in Especially suitable in defence
Industrial setting, Plant projects and R&D where activity
maintenance, civil construction times cannot be reliably predicted.
projects, etc.

44

22
 05-11-2019

KEY TERMS
Activity Gantt chart
Activity-on-arrow (AOA) Hammock activity
Activity-on-node (AON) Lag relationship
Burst activity Merge activity
Concurrent engineering Parallel activity
Critical path Sensitivity
Early and late times Total slack
Free slack

6–45

Questions?
hasmukh@iimidr.ac.in

46

23