PROJECT MANAGEMENT

THIS FILE CONTAINS TH

PROBLEMS OF CHAPTER
SOLUTION IS IN A

CLICK HERE TO PROCEED TO SOLUTIONS

HIS FILE CONTAINS THE SOLUTIONS OF THE EXERCISE
OBLEMS OF CHAPTER 4 - PROJECT MANAGEMENT. EACH
SOLUTION IS IN A SEPARATE WORKSHEET
 BACK

Problem 1

Activity Predecessor Successor

A - D,E
B - F
C - G,H
D A F
E A J
F B,D J
G C J
H C I
I H -
J E,F,G -

AOA Network

2
E
A
J
D 5 7
START
1 F
B I
3
C G 6

BACK
 NEXT SOLUTION

AON Network

A E

D
START
B F
J
END
G
C H I
 PREVIOUS SOLUTION NEXT SOLUTION

Problem 2

Activity Predecessor Successor

a - c,f
b - d,e
c a h
d b h
e b h
f a i
g b i
h c,d,e i
i f,g,h -

AOA Network

6
f

h i
2
c
a 5
g
7
1

d
3
b

AON Network

a f
c
START
d h i END

e
b g

In the AOA Network representation a dummy task has to be

incorporated into the network to allow for two
predecessors of the task e. No such requirement is found
in the AON representation. It appears that an AON
representation is much easier than AOA.
BACK NEXT
 PREVIOUS SOLUTION NEXT SOLUTION

Problem 3

Duration
Activity Predecessor (weeks)
a - 2
b a 3
c a 6
d a 4
e b 3
f b 8
g c,e 6
h f,g 3
i d 4
j h,I 2

(a) AOA Network

3
b:3 f:8
e:3
a:2 c:6 h:3 j:2
1 2 4 6 7 8
g:6
d:4

5 i:4

(b) Path Duration

1-2-4-6-7-8 19
1-2-3-6-7-8 18
1-2-5-7-8 12
1-2-3-4-6-7-8 19
Therefore duration of project is 19 weeks

(c ) There are two critical paths here, 1-2-4-6-7-8 (19

weeks) or 1-2-3-4-6-7-8 (19 weeks). The fact that there
are two critical paths present in the network is an
important observation.

(d) If the duration of 'f', is 10 weeks as per the revision,

then 1-2-3-6-7-8 (20 weeks) becomes the unique critical
path in this project.

BACK NEXT
 PREVIOUS SOLUTION

Problem 4

Activity Predecessor Successor

A - B,C,D
B A E
C A G
D A F
E B G A
1
F D G
G C,E,F -

(a) Activities B, C and D can happen simultaneously.

(b) Irrespective of the activity durations, activities A
and G wil be in the critical path.

BACK
 NEXT SOLUTION

AOA Network

D
F
A C G
3 5 6

B E

NEXT
PREVIOUS SOLUTION NEXT SOLUTION

Problem 5

Duration
Activity Predecessor (weeks)
a - 8
b a 3
c a 6
d a 4
e b 5
f b 4
g c,e 6
h d 6
i f 6
j d 4
k g,h,i 3
l j,k 3

(a) AOA Network

f:4
3 6
b:3 e:5 i:6

g:6 l:3
a:8 c:6 k:3
1 2 4 7 8 9

h:6
d:4
j:4

5
 (b) The critical path here is 1-2-3-4-7-8-9 which amounts to 28 weeks, therefore
the firm cannot meet the deadline.

(c ) The activities that can be considered for possible reduction in project

duration are a,b,e,g,k and l

(d) Reduction cost would be Rs.30,000 (3 weeks are to be reduced to meet the
commitments) while the penalty payment would be Rs.21,000 (for 3 weeks of
delay) and a fixed amount of Rs. 20,000. Hence the firm should invest in
efforts to bring down the duration of the project by 3 weeks

BACK NEXT
PREVIOUS SOLUTION NEXT SOLUTION

Problem 6

Duration
Activity Predecessor (weeks)
a - 6
b a 3
c a 4
d a 6
e c 4
f b 2
g d,e,f 2

(a) AOA Network

3
f:2
b:3

a:6 c:4 e:4 g:2

1 2 4 5 6

d:6

Duration
(b) Activity Predecessor (weeks) ES EF LS LF Slack
a - 6 0 6 0 6 0
b a 3 6 9 9 12 3
c a 4 6 10 6 10 0
d a 6 6 12 8 14 2
e c 4 10 14 10 14 0
f b 2 9 11 12 14 3
g d,e,f 2 14 16 14 16 0

(c ) The Project Manager should consider activities b,d and f

for rescheduling since they have some slack

BACK NEXT
NEXT SOLUTION
 PREVIOUS SOLUTION NEXT SOLUTION

Problem 7

Duration - 3 estimates
Most
Optimistic Likely Pessimistic
Activity Predecessor (months) (months) (months)
a - 2 4 9
b - 2 3 8
c b 4 7 14
d a 4 5 16
e b 5 7 12
f c,d 2 4 8
g c,d 6 8 14
h e,f 6 7 14
i g,h 2 3 9

Estimated
(a) Activity Time Variance S.D.
a 4.50 1.361 1.17
b 3.67 1.000 1.00
c 7.67 2.778 1.67
d 6.67 4.000 2.00
e 7.50 1.361 1.17
f 4.33 1.000 1.00
g 8.67 1.778 1.33
h 8.00 1.778 1.33
I 3.83 1.361 1.17

(b) AOA Network

a:4.50 2 d:6.67

1 g:8.67 i:3.83
4 6 7
c:7.67
f:4.33
b:3.67
3 5 h:8.00
e:7.50

Estimated
(c) Path Time Variance S.D.
3.83 1-2-4-6-7 23.67 8.500 2.92
0.17 1-2-4-5-6-7 27.33 9.500 3.08
27.50 1-3-4-5-6-7 27.50 7.917 2.81
3.67 1-3-4-6-7 23.83 6.917 2.63
4.50 1-3-5-6-7 23.00 5.500 2.35

From the above table we see that the critical path is 1-2-
4-5-6-7 and the nearly critical path is 1-3-4-5-6-7

(d) Due date D = 36 months

Estimated time T = 27.50 months
Standard Deviation 3 2.81
Standard normal variate = 3.020979
Probability of completion in 40
months = 99.87 %

(e) Probability of completion = 0.8

Standard normal variate = 0.842
Estimated time T = 2 27.33 months
SD = 3.08
Due date D = 29.93 months

(f) For reduction in the project duration, activities on the

critical path can be reviewed for crashing options.The firm
must investigate methods that enables it to reduce the
variance of some of the activities on the critical path.

(g) The probability of completion in 36 months, on the near

critical path is :
Due date D = 36 months
Estimated time T = 27.33 months
Standard Deviation 3.08
Standard normal variate = 2.811838
Probability of completion in 36
months = 99.75 %

It is interesting to note that a near-critical path can

potentially bring down the probability of completion
compared to a critical path due to high path variance.
Therefore the notion of an official critical path in PERT
is not the same as in a CPM method.
BACK NEXT
 What-if ??

Change the activity

durations to assess the
impact
This observation does not hold if you change the
activity durations.
PREVIOUS SOLUTION NEXT SOLUTION

Problem 8

Normal Crash Normal

Duration Duration Cost Crash Cost
Activity Predecessor (weeks) (weeks) (Rs.) (Rs.) What-if ??
a - 6 5 10,000 15,000
b - 4 3 12,000 14,000 Change the cost structure
c a 5 n.a. 16,000 n.a. to assess the impact
d b 3 n.a. 18,000 n.a.
e c 4 2 11,000 17,000
f d 4 2 24,000 32,000
g c 4 3 12,000 18,000
h d 9 6 50,000 68,000
i e,f 2 n.a. 16,000 n.a.
j g,h,i 3 2 10,000 11,000

Indirect cost for the project per week (Rs.) 6,000

AON Network 4
g

a c 3
2
: 5 e
6 j FINISH
i
START 4

f
b d 4
4 3
h
9
We evaluate our options by the
following table:

Normal Crash Max.

Normal Time Crash Time Cost NC Cost CC Crashing Crashing
Activity (Weeks) (Weeks) (Rs.) (Rs.) (Weeks) Cost/week
a 6 5 10,000 15,000 1 5000
b 4 3 12,000 14,000 1 2000
c 5 n.a. 16,000 n.a. 0 n.a.
d 3 n.a. 18,000 n.a. 0 n.a.
e 4 2 11,000 17,000 2 3000
f 4 2 24,000 32,000 2 4000
g 4 3 12,000 18,000 1 6000
h 9 6 50,000 68,000 3 6000
i 2 n.a. 16,000 n.a. 0 n.a.
j 3 2 10,000 11,000 1 1000

Sum of the normal costs for all the activities in the above table constitutes
the direct cost without crashing
The indirect cost is @ Rs. 6000 per week charged for the project duration of
20 weeks

Crashable No. of
Activities on Activitiy weeks Direct Project Indirect
No. Critical path Crashed crashed Cost Duration Cost Total Cost
1 a,c,e,i,j None 0 179,000 20 120,000 299,000
2 a,c,e,i j 1 180,000 19 114,000 294,000
3 a,c,i e 2 186,000 17 102,000 288,000
4 c,i a 1 191,000 16 96,000 287,000
 Therefore we find the optimum cost to be (Rs.) 287,000
Savings obtained by crashing activities (Rs.) 12,000

PREVIOUS SOLUTION NEXT SOLUTION

PREVIOUS SOLUTION NEXT SOLUTION

Problem 9

Manpowe 3
Duration r f:2
Activity Predecessor (weeks) required b:3
a - 6 80
b a 3 30 a:6 c:4 e:4 g:2
1 2 4 5 6
c a 4 30
d a 6 40
e c 4 30
f b 2 40 d:6
g d,e,f 2 80

Duration Total
Activity Predecessor (weeks) ES EF LS LF Slack
a - 6 0 6 0 6 0
b a 3 6 9 9 12 3
c a 4 6 10 6 10 0
d a 6 6 12 8 14 2
e c 4 10 14 10 14 0
f b 2 9 11 12 14 3
g d,e,f 2 14 16 14 16 0

(a) Early Start representation of activities

Slack in the path

b f

a c e g

0 2 4 6 8 10 12 14 16

d
 d

Earliest Start Loading Week no. Activities Early Start Hiring/layoff

1 a 80 10
Manpower

2 a 80 10
120
3 a 80 10
100 4 a 80 10
5 a 80 10
80 6 a 80 10
60 7 b,c,d 100 30
8 b,c,d 100 30
40 9 b,c,d 100 30
10 c,d,f 110 40
20
11 d,e,f 110 40
0 12 d,e 70 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 13 e 30 -40
14 e 30 -40
Weeks 15 g 80 10
16 g 80 10

(b)
Alternative representation of activities
Slack in the path

b f
a c e g

0 2 4 6 8 10 12 14 16

d
 Week no. Activities Alternate Hiring/layoff
Alternative Scheduling 1 a 80 10
2 a 80 10
3 a 80 10
Manpower

120
4 a 80 10
100 5 a 80 10
6 a 80 10
80 7 b,c,d 100 30
60 8 b,c,d 100 30
9 b,c,d 100 30
40 10 c,d 70 0
11 d,e 70 0
20
12 d,e 70 0
0 13 e,f 70 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 14 e,f 70 0
15 g 80 10
Weeks
16 g 80 10

(c) Hiring charge = 2500 (Rs. per week per worker)

Layoff charges = 4000 (Rs. per week per worker)
Workers employed = 70
Worker-weeks hired Worker-weeks laid off Cost of the plan
ES schedule 250 80 945,000.00
Alternate schedule 170 0 425,000.00

PREVIOUS SOLUTION
 PREVIOUS SOLUTION NEXT SOLUTION

Problem 7

Duration - 3 estimates
Most
Optimistic Likely Pessimistic
Activity Predecessor (months) (months) (months)
A - 3 6 15
B - 2 4 14
C A 5 8 12
D A 3 6 9
E C 6 10 18
F B 2 4 12
G C 3 5 9
H D,E,F 4 6 14
I B 6 9 20
J G,H 2 4 6

Estimated
(a) Activity Time Variance S.D.
A 7.00 4.000 2.00
B 5.33 4.000 2.00
C 8.17 1.361 1.17
D 6.00 1.000 1.00 a:7.00
E 10.67 4.000 2.00 1
F 5.00 2.778 1.67
G 5.33 1.000 1.00 b:5.33
H 7.00 2.778 1.67
I 10.33 5.444 2.33
J 4.00 0.444 0.67

Estimated
Path Time Variance S.D.
10.34 1-2-4-6-7 26.50 6.806 2.61
36.84 1-2-4-5-6-7 36.84 17.583 4.19
12.84 1-2-5-6-7 24.00 13.222 3.64
15.51 1-3-5-6-7 21.33 10.000 3.16
21.18 1-3-7 15.66 9.444 3.07

From the above table we see that the critical path is 1-2-
4-5-6-7 and the nearly critical path is 1-2-4-6-7. The
project is likely to take 36.84 weeks to complete.

(b) Activity "I" has the highest variance. Activities A, B and

E also have high variance. These are likely to delay the
completion of the proejct.

(c) Due date D = 42 weeks

 Estimated time T = 36.84 weeks
Standard Deviation 2 4.19
Standard normal variate = 1.231
Probability of completion in 42
weeks = 89.08 %

(d) Since the other firm is working for a long time, they will
have no uncertainty. We can rework the above problem with
most likely times only. (see chart alongside for details)

Likely date that they will quote = 34.00 weeks

(e) With a standard add-in package, @RISK one can answer this
question by running a monte carlo simulation. Setup @RISK
and run it for 10,000 times to make some observations.

BACK
 AOA Network (PERT)

4
c:8.17 g:5.33

e:10.67
2 d:6.00
j:4.00
5 h:7.00 7
6
f:5.00

3
i:10.33

This observation does not hold if you change the

activity durations.

45 weeks
 36.84 weeks
4.19
1.946

97.42 %

AOA Network (CPM)

4
c:8 g:5
e:10

a:6 2 d:6
1 h:6 j:4
5
6
b:4

f:4

3
i:9
7