LECTURE HANDOUT 7

TOPIC: PROJECT CONTROLLING

COURSE: PROJECT MANAGEMENT
BBA PROGRAM, IIUC
Manjurul Alam Mazumder*
7.0 Meaning of Project Controlling (PC)
PC is concerned with the optimum use of the total resources of an organization to meet the
technical, cost and time constraints of the project. The prime responsibility of a project manager
in view of project implementation and control may be grouped in the following four categories.

Theses activities are known as mechanism or steps of project control. These are:
i. Routing
ii. Scheduling
iii. Dispatching and
iv. Follow-up

7.1 Routing
Routing may be defined as the selection of paths or routes over which each activity is to travel in
being transformed form origin to end. In other words, routing determines the specification of the
flow or sequence of operations and processes to be followed in a particular project.

The objective of routing is to determine the best and cheapest sequence of operations and ensure
that this sequence must be followed. Routing also exercise a great upon the design of the factory
building & the machines. Another objective is to attain economic advantage based upon the
division of labor and optimum utilization of machines.

7.2 Scheduling
Schedule is the second step of project controlling. It integrates the work of other departments to
develop a complete project at the promised date. A schedule may be defined as a timetable fore
performing activities, utilizing resources or allocating facilities. On the other side, it is the task
of determining when each activity is to start & finish. Function of scheduling establishes the
starting and finishing times for each action.
The Objectives of scheduling are as follows:
a. Cost control;
b. Maintaining proper sequence of activities;
c. Completion of the project in time.

Basic techniques of scheduling are as follows:

i. Gantt Chart or Bar Chart, Flow Chart, Line Balance etc.
ii. PERT & CPM
iii. Network Diagram

*
Assistant Professor, Dept. of Business Administration, IIUC
Gantt Chart:
Gantt chart is the most useful for simple project. It was developed by Henry L. Gantt. He
developed a versatile charting technique. It enables a project manager / an operations managers
to initially schedule project activities and then to monitor progress over time by comparing to
planned progress to actual progress. [Recall the charts drawn in the class]
The main advantages of Gantt Chart is its simplicity. It is most useful for simple project, where
activities are simultaneous. For more complex projects, Gantt Charts can be useful for initial
planning.

PERT & CPM:

PERT stands for Program Evaluation and Review Techniques. And CPM means Critical Path
Methods. These two techniques were developed in the late 1950s. PERT was developed by US
Navy Force in 1958 to schedule & control its Polaris missile project. CPM was developed in
1957 by J. E. Kelly.
PERT is applied for uncertain activity time of a project. For new or unique projects, estimating
the time for each activity may be quite difficult. In fact, in many cases. Activity time are
uncertain and are best described by a range of possible values rather than one specific time
estimates. In this instance, the uncertain activity times are treated as random variables with
associated probability distribution.
To incorporate uncertain activity times into analysis, we need to obtain three time estimates for each
activity.
Optimistic time (a) = the minimum activity time if the execution goes extremely good.
Most probable or likely time (m) = the expected activity time if execution goes normally.
Pessimistic time (b) = the maximum activity time if the execution goes very badly i.e. delays are
encouraged.
The range for the time estimates is from a to b and the most likely time will be anywhere in the range
from a to b.
The probabilistic data for project activities generally follow beta probability distribution.
The formula for mean and variance of beta distribution are given below:
Mean (µ) = a + 4m +b
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Mean is expected time.
Variance, (σ2 ) = ((b-a)/6)2
Where σ is the standard deviation.
The expected project completion time is ∑µ i, where µ i, is the expected duration of the ith critical
activity.
The variance of the project completion time is ∑ σ2 i, where σ2 i, is the variance of the ith critical activity
in the critical path.

Probably of completion of the Project:

To know the probability of completion of the project on or before a given due date or to know the
expected project completion time if the probability of completion of the project is given, the beta
distribution is approximately to standard normal distribution as:
Z= ×-µ / δ
Where, x is actual project completion time
µ is the expected project completion time.

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Critical path is the most important sequence of an operation. It may be identified as the shortest
possible time to complete a project operation. Besides, it is the longest time consuming path
among different paths. Any delay in critical path with make the project late to complete.
Using PERT and CPM, managers must be able to obtain:
a. A graphical display of project activities;
b. An estimate of how long the project will take to complete;
c. An indication of which activities are most critical to timely project completion;
d. An indication of how long any activity can be delayed without lengthening the
project.
The basic differences of these two techniques are shown as under:
PERT CPM
1. A probabilistic model with uncertainty in 1. A deterministic model with well-known
activity duration activity based on past experience.
2. An event oriented approach 2. An activity oriented approach
3. PERT basically does not demarcate 3. CPM marks critical activities
between critical & not-critical activities
4. PERT has three-times estimates. 4. CPM has one time estimate.
5. PERT terminology uses notions like 5. CPM terminology employs words like
network diagram, event & slack arrow diagram, nodes & float.
6. The use of dummy activities may be 6. The use of dummy activities is not
required for representing proper sequencing. necessary. The arrow diagram thus becomes
slightly simpler.

Basic terminologies of CPM and PERT techniques:

Activity: An activity represents some action and as such it is a time and resources consuming
part of a project. An activity is represented by an arrow. Each and every activity has a point of
time where it begins and a point where it ends.
Events: An event represents the start (beginning) or completion (end) of some activity and as
such it consumes no time and resources. It’s also known as a node.
Predecessor activity: An activity which must be completed before one or more other activities
start.
Successor activity: An activity which must me completed after one or more of other activities
are completed.
Earliest start time: It’s the time at which the activity can be started without affecting the
total project time.
Earliest finish time: It’s the earliest possible time at which an activity can be finished without
affecting the total project time.
Latest start time: It’s a latest possible time by which an activity must start without affecting the
total project time.
Latest finish time: It’s the latest time by which an activity must get completed without delaying
the project completion.
Forward pass: The procedure that involves moving forward through the project network to
determine the EST and EFT for each activity.
Backward Pass: The procedure that involves moving backward through the project network to
determine the LST and LFT for each activity.

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Slack: the length of time an activity can be delayed without delaying the project completion
time.
Slack = LST- EFT
= LFT- EST
Critical activity: The activity which has zero slack i.e. the activity which cannot be delayed
without delaying the entire project.
Critical Path: Critical path is the longest path in a project network which consists of the critical
activities. It is the shortest possible time to complete the project.

Network Diagram:
One of the main features of PERT and related techniques is their use of the network diagram to
depict major project activities and their sequential relationship. The diagram is composed of a
number of arrows and nodes. An AOA diagram represents the project activities based on arrows.
On the contrary, an AON diagram represents the project activities based on nodes. [Recall the
examples given in the class].

7.3 Dispatching
Dispatching is another important mechanism of project control. The actual meaning of the term
dispatching is sending messages to destination. It translates the paper work into actual operation.
Dispatching co-ordinates & translates planning into actual operation. Dispatching ensures that
the right type of jigs, fixtures & other accessories are ready at correct place for a particular
operation. In fact the dispatcher is given due importance without which there would be little
possibility of completing the operation as per the established plan.

7.4 Follow-up
Follow up is another step of project controlling. Follow up is closely related with the activities
of a dispatcher to whom is delegated the scheduling responsibility. Follow up functioning checks
& measures the effectiveness of previous project control function-routing, scheduling &
dispatching. It is a comparison between the standard and actual work done to take corrective
action.
Major objectives of follow up are to:
i. Recognize the delay
ii. Evaluate the reasons for delay
iii. Take corrective action to remove delay.

7.5 Quantitative Problems:

Problem # 1
Find below a number of activities along with their required completion times:
Activities A B C D E F G H I
Duration (day) 4 3 6 7 6 8 5 4 3
Immediate predecessors -- -- A A, B -- B, E F C, D G, H

Required:
a. Draw a Gantt Chart.
b. Find out slack for each activity (total slack)
c. Show the Critical Path.
d. How many days will it take to complete the project?

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Problem # 2
Find below a number of activities along with their required completion times
Activities A B C D E F G
Immediate - - A A,B - C,E,D F
predecessors
Duration 5 3 8 7 7 4 5
(weeks)

Required:
i. Draw a Gantt Chart
ii. Show the critical path
iii. How many days will it take to complete the project?

Problem # 3
For a small project of 12 activities, the details are given below.
Activities A B C D E F G H I J K L
Dependences ---- ---- ---- B,C A C E E D,F,H E I,J G
Duration(days) 9 4 7 8 7 5 10 8 6 9 10 2

Required:
i. Draw a Gantt Chart.
ii. Find the critical path and
iii. Find earliest occurrence time, latest occurrence time, critical activities and project
completion time

Problem # 4
You are given below a table showing activities, their required sequence, and time requirements
for the new introduction project.

Activity Description Immediate Predecessor Time

Code Activity (Weeks)

A Organize Sales Office --- 6

B Hire Salespeople A 4
C Train Salespeople B 7
D Select Advertising Agency A 2
E Plan Advertising Campaign D 4
F Conduct Advertising Campaign E 10
G Design Package --- 2
H Set-up Packaging Facilities G 10
I Package Initial Stocks H, J 6
J Order Stock from Manufacturer --- 13
K Select Distributors A 9
L Sell to Distributors C, K 3
M Ship Stock to Distributors I, L 5

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Required:
a. Draw an AOA diagram.
b. Convert the AOA diagram into an AON diagram.
c. Identify different paths in the network showing critical path.
d. Find out slacks of each path.
e. How many weeks will it take to complete the marketing operation?

Problem # 5
A project consists of eight activities with the following relevant information:
Activity Immediate Estimated duration(days)
predecessor Optimistic Most likely Pessimistic
A ---- 1 1 7
B ---- 1 4 7
C ---- 2 2 8
D A 1 1 1
E B 2 5 14
F C 2 5 8
G D,E 3 6 15
H F,G 1 5 3

Required
(a) Draw the PERT network and find out the expected project completion time.
(b) What duration will have 95% confidence for project completion?
(c) If the average duration for activity F increases to 14 days, what will be its effect on the
expected project completion time which will have 95% confidence? For standard normal
Z= 1.6545, area under the standard normal curve from 0 to Z= 0.45)
(d) What will be the probability of the project completion on or before 27 days?