Project Management The Managerial

Process 7th Edition Larson Solutions

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 Project Management: The Managerial Process

Chapter 6

Developing a Project Plan

Chapter Outline

1. Developing the Project Network

2. From Work Package to Network
3. Constructing a Project Network
A. Terminology
B. Basic Rules to Follow in Developing Project Networks
4. Activity-on-Node (AON) Fundamentals
5. Network Computation Process
A. Forward Pass—Earliest Times
B. Backward Pass—Latest Times
C. Determining Slack (or Float)
i. Total Slack
ii. Free Slack (Float)
D. Free Slack (Float)
6. Using the Forward and Backward Pass Information
7. Level of Detail for Activities
8. Practical Considerations
A. Network Logic Errors
B. Activity Numbering
C. Use of Computer to Develop Networks
D. Calendar Dates
E. Multiple Starts and Multiple Projects
9. Extended Network Techniques to Come Closer to Reality
A. Laddering
B. Use of Lags to Reduce Schedule Detail and Project Duration
i. Finish-to-Start Relationship
ii. Start-to-Start Relationship
iii. Finish-to-Finish Relationship
iv. Start-to-Finish Relationship
v. Combinations of Lag Relationships
C. An Example Using Lag Relationships—The Forward and Backward Pass
D. Hammock Activities

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10. Summary
11. Key Terms
12. Review Questions
13. Exercises
14. Case 6.1: Advantage Energy Technology Data Center Migration
15. Case 6.2: Shoreline Stadium Case

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Chapter Learning Objectives

After reading this chapter you should be able to:

LO 6-1 Understand the linkage between WBS and the project network.

LO 6-2 Diagram a project network using AON methods.

LO 6-3 Calculate early, late, and slack activity times.

LO 6-4 Identify and understand the importance of managing the critical path.

LO 6-5 Distinguish free slack from total slack.

LO 6-6 Demonstrate understanding and application of lags in compressing

projects or constraining the start or finish of an activity.

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Review Questions
1. How does the WBS differ from the project network?

a. The WBS is hierarchical while the project network is sequential.

b. The network provides a project schedule by identifying sequential dependencies
and timing of project activities. The network sets all project work, resource needs,
and budgets into a sequential time frame; the WBS does not provide this
information.
c. The WBS is used to identify each project deliverable and the organization unit
responsible for its accomplishment within budget and within a time duration.
d. The WBS provides a framework for tracking costs to deliverables and
organization units responsible.

2. How are WBS and project networks linked?

The network uses the time estimates found in the work packages of the WBS to
develop the network. Remember, the time estimates, budgets, and resources required
for a work package in the WBS are set in time frames, but without dates. The dates
are computed after the network is developed.

3. Why bother creating a WBS? Why not go straight to a project network and
forget the WBS?

The WBS is designed to provide different information for decision making. For
example, this database provides information for the following types of decisions:

a. Link deliverables, organization units, and customer

b. Provide for control
c. Isolate problems to source
d. Track schedule and cost variance. Network does not.
e. Assign responsibility and budgets
f. Focus attention on deliverables
g. Provide information for different levels in the organization.

4. Why is slack important to the project manager?

Slack is important to the project manager because it represents the degree of

flexibility the project manager will have in rearranging work and resources. A project
network with several near critical paths and hence, little slack, gives the project
manager little flexibility in changing resources or rearranging work.

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5. What is the difference between free slack and total slack?

Free slack usually occurs at the end of an activity chain—before a merge activity. It is
the amount of time the activity can be delayed without affecting the early start of the
activity immediately following it. Since free slack can be delayed without delaying
following activities, it gives some resource flexibility to the project manager. Total
slack is the amount of time an activity can be delayed before it becomes critical. Use
of total slack prevents its use on a following activity.

6. Why are lags used in developing project networks?

Two major reasons:

a. To closer represent real situations found in projects.

b. To allow work to be accomplished in parallel when the finish-to-start relationship
is too restrictive.

7. What is a hammock activity, and when is it used?

A hammock activity is a special purpose activity that exists over a segment of the life
of the project. A hammock activity typically uses resources and is handled as an
overhead cost—e.g., inspection. Hammock activities are used to identify overhead
resources or costs tied directly to the project. The hammock duration is determined by
the beginning of the first of a string of activities and the ending of the last activity in
the string. Hammock activities are also used to aggregate sections of projects to avoid
project detail—e.g., covering a whole subnetwork within a project. This approach
gives top management an overview of the project by avoiding detail.

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Exercises
1. Here is a partial work breakdown structure for a wedding. Use the method
described in the Snapshot from Practice 6.2: The Yellow Sticky Approach to
create a network for this project.

Note: Do not include summary tasks in the network (i.e., 1.3, Ceremony, is a
summary task; 1.2, Marriage license, is not a summary task). Do not consider
who would be doing the task in building the network. For example, do not
arrange “hiring a band” to occur after “florist” because the same person is
responsible for doing both tasks. Focus only on technical dependencies between
tasks.

Hint: Start with the last activity (wedding reception), and work your way back
to the start of the project. Build the logical sequence of tasks by asking the
following question: In order to have or do this, what must be accomplished
immediately before this? Once completed, check forward in time by asking this
question: Is this task(s) the only thing that is needed immediately before the start
of the next task?

(Work Breakdown Structure Not Shown)

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2. Draw a project network from the following information. What activity(s) is a

burst activity? What activity(s) is a merge activity?

Activity B is a burst activity and activity E is a merge activity.

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3. Draw a project network from the following information. What activity(s) is a

burst activity? What activity(s) is a merge activity?

Activity C is a burst activity. Activity G is a merge activity.

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4. Draw a project network from the following information. What activity(s) is a

burst activity? What activity(s) is a merge activity?

Activity A is a burst activity. Activities D and H are merge activities.

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5. Draw a project network from the following information. What activity(s) is a

burst activity? What activity(s) is a merge activity?

Activity A is a burst activity. Activities F, G, and H are merge activities.

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6. From the following information, develop an AON project network. Complete the
forward and backward pass, compute activity slack, and identify the critical
path. How many days will the project take?

The project will take 14 days.

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7. The project information for the custom order project of the Air Control
Company is presented here. Draw a project network for this project. Compute
the early and late activity times and the slack times. Identify the critical path.

The early and late activity times and the slack times are shown on the diagram above.
The critical path is A-D-F-G-H. The project takes 45 days to complete.

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8. You have signed a contract to build a garage for the Simpsons. You will receive a
$500 bonus for completing the project within 7 working days. The contract also
contains a penalty clause in which you will lose $100 for each day the project
takes longer than 7 working days.

Draw a project network given the information below. Complete the forward and
backward pass, compute the activity slack, and identify the critical path. Do you
expect to receive a bonus or a penalty on this project?

Early start, late start, early finish, late finish, and slack are shown on the diagram above.
The completion time is 18 days so there will be a three-day penalty.

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9. You are creating a customer database for the Hillsboro Hops minor league
baseball team. Draw a project network given the information below. Complete
the forward and backward pass, compute activity slack, and identify the critical
path.

How long will this project take? How sensitive is the network schedule?
Calculate the free slack and total slack for all noncritical activities.

Early start, late start, early finish, late finish, and slack are shown on the diagram
above. The project is expected to take 10 days. The project is very sensitive with
three interrelated critical paths. None of the activities have slack.

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10. K. Nelson project manager of Print Software, Inc., wants you to prepare a
project network; compute the early, late, and slack activity times; determine the
planned project duration; and identify the critical path. His assistant has
collected the following information for the Color Printer Drivers Software
Project:

Early start, late start, early finish, late finish, and slack are shown on the diagram
above. The completion time is 105 days. The critical path is A-D-G-I-J-K-L.

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11. A large southeast city is requesting federal funding for a park-and-ride project.
One of the requirements in the request application is a network plan for the
design phase of the project. Sophie Kim, the chief engineer, wants you to develop
a project network plan to meet this requirement. She has gathered the activity
time estimates and their dependencies shown here. Show your project network
with the activity early, late, and slack times. Mark the critical path.

Early start, late start, early finish, late finish, and slack are shown on the diagram
above. The completion time is 150 days. The critical path is A-C-E-G-J.

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12. You are creating a customer database for the Lehigh Valley IronPigs minor
league baseball team. Draw a project network given the information below.
Complete the forward and backward pass, compute activity slack, and identify
the critical path.

How long will this project take? How sensitive is the network schedule?
Calculate the free slack and total slack for all noncritical activities.

Early start, late start, early finish, late finish, and slack are shown on the diagram
above. The project is expected to take 18 days. The project is not very sensitive with
one dominant critical path, A-C-F-I-K-L. Activities B, E, and H and J share 8 days of
slack while activities D, G, and J share 7 days of slack.

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13. You are completing a group term paper. Given the project network that follows,
complete the forward and backward pass, compute activity slack, and identify
the critical path. Use this information to create a Gantt chart for the project. Be
sure to show slack for noncritical activities.

Early start, late start, early finish, late finish, and slack are shown on the diagram
above. The Gantt chart is shown below.

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1 2 3 4 5 6 7 8 9 10 11 12 13
Identify topic
Research topic
Draft paper
Edit paper
Create graphics
Reference
Proof
Final draft

The completion time is 13 days. The critical path is A-B-C-D-G-H.

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14. You are managing a product upgrade project for Bangkokagogo. Given the
project network that follows, complete the forward and backward pass, compute
activity slack, and identify the critical path. Use this information to create a
Gantt chart for the project. Be sure to show slack for noncritical activities.

Early start, late start, early finish, late finish, and slack are shown on the diagram
above. The critical path is A-B-D-E-G-J. The non-critical activities are C, F, H, and I.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Form project team
Interview users
Survey users
Identify new features
Acquire materials
Develop Mrkt campaign
Produce prototype
Design graphics
Conduct marketing
Perform sales calls

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15. You are creating a database for the Oklahoma City Thunder NBA Basketball
team. Given the project network that follows, complete the forward and
backward pass, compute activity slack, and identify the critical path. Use this
information to create a Gantt chart for the project.

Early start, late start, early finish, late finish, and slack are shown on the diagram
above. The critical path is A-B-D-G-H-I.

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Computer Exercises
All of the Microsoft Project files are available through McGraw-Hill Connect.

16. The planning department of an electronics firm has set up the activities for
developing and production of a new phone. Given the information below,
develop a project network using Microsoft Project. Assume a five-day workweek
and the project starts on January 4, 2017.

Activity Activity Activity

ID Description Predecessor Time (weeks)
1 Staff None 2
2 Develop market program 1 3
3 Select channels of distribution 1 8
4 Patent 1 12
5 Pilot production 1 4
6 Test market 5 4
7 Ad promotion 2 4
8 Set up for production 4,6 16

Teaching note: it is not uncommon for students to get confused because the activity
ID’s are presented as numbers and not letters. Nevertheless, it is a good to get used to
this since Microsoft Project uses numbers when entering predecessors.

The estimated completion date is 150 days or 30 weeks, which is well ahead of the 45
week deadline.

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17. Using Microsoft Project, set up the network and determine the critical path for
Stage 1 of the Whistler Ski Resort Project described below. The project
workweek will be 5 days (M-F).

(Refer to textbook. Problem too long to include here.)

Assignment:

1. Identify the critical path on your network.

2. Can the project be completed by October 1?

The schedules is shown below:

The critical path for this schedule is: Build road to site → Clear chair lift → Construct
chair lift foundation → Install chair lift towers → Install chair lift cable → Install
chairs. You can note that those activities are underlined in the table above and shown
in red on the Gantt chart.

If the project is started on April 3, 2017 (April 1 is a Saturday), then it is completed

on Friday, September 29, 2017. That is 130 days or 26 weeks.

Hint: When assigning this exercise you should remind students to use an April 3,
2017 start date.

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18. The optical disk project team has started gathering the information necessary to
develop the project network—predecessor activities and activity times in weeks.
The results of their meeting are found in the following table.

The Microsoft Project data entry is shown below. The start date is set to
January 2, 2017 since January 1 is a Sunday.

The estimated completion time is 44 weeks, so yes, the project can be completed in
45 weeks if everything goes as planned. A network for the optical disk project is
presented below detailing the critical path.

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Below is the same network as generated by Microsoft Project.

Teaching Note: Prior to assigning this exercise you should announce to the students
that they should assume that the project workweek will be 5 days (Monday - Friday)
and that the project is scheduled to start January 2, 2017.

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Lag Exercises
19. From the following information, compute the early, late, and slack times for
each activity. Identify the critical path.

The critical path is A-C-E-F.

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20. Given the following information, compute the early, late, and slack times for the
project network. Which activities on the critical path have only the start or
finish of the activity on the critical path?

The critical path is A-B-D-E-F-G-H-I.

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21. Given the information in the following lag exercises, compute the early, late, and
slack times for the project network. Which activities on the critical path have
only the start or finish of the activity on the critical path?

The critical path is A-B (finish only)-C-D-F.

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22. Given the network below, compute the early, late, and slack time for each
activity. Clearly identify the critical path.

The critical path is A-D-E-F-G.

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23. The CyClon project team has started gathering information necessary to develop
a project network—predecessor activities and activity time in days. The results
of their meeting are found in the following table:

Part A. Create a network based on the above information. How long will the
project take? What is the critical path?

The project is scheduled to take 80 days. The critical path consists of activities: 2, 3,
5, 6, 7, 8, 10, 11, 12, 13.

CyClon Project Entry Table and Gantt Chart Part A is shown below:

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Part B. Upon further review the team recognizes that they missed three finish-
to-start lags. Procure prototype parts will involve only 2 days of work but it will
take 8 days for the parts to be delivered. Likewise, Order stock components will
take 2 days of work and 8 days for delivery and Order custom components 2
days of work and 13 days for delivery.

Reconfigure the CyClon schedule by entering the three finish-to-start lags. What
impact did these lags have on the original schedule? On the amount of work
required to complete the project?

The schedule still takes 80 days to complete and there is no change in the critical
path. However instead of taking 98 days of work to complete, the project will only
take 69 days of work! We obtain 69 days by totaling the number of days for each lag.

CyClon Project Entry Table and Gantt Chart Part B is shown below:

Part C. Management is not happy with the schedule and wants the project
completed as soon as possible. Unfortunately, they are not willing to approve
additional resources. One team member pointed out that the network contained
only finish-to-start relationships and that it might be possible to reduce project
duration by creating start-to-start lags. After much deliberation the team
concluded that the following relationships could be converted into start-to-start
lags:

• Procure prototype parts could start 6 days after the start of Design.
• Fabricate parts could start 9 days after the start of Design.
• Laboratory test could begin 1 day after the start of Assemble prototype.
• Field test could start 5 days after the start of Laboratory test.
• Adjust design could begin 7 days after the start of Field test.
• Order stock and Order custom components could begin 5 days after Adjust
design.
• Test unit could begin 9 days after the start of Assemble test production unit.
• Document results could start 3 days after the start of Test unit.

Reconfigure the CyClon schedule by entering all nine start-to-start lags. What
impact did these lags have on the original schedule (Part A)? How long will the

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project take? Is there a change in the critical path? Is there a change in the
sensitivity of the network? Why would management like this solution?

CyClon Project Entry Table and Gantt Chart Part C is shown below.

The project duration has been reduced 15 days as a result of introducing the start-to-
start lags. The project is now estimated to be completed in 65 days. There is a change
in the critical path but the sensitivity of the network does not change much. Procure
prototype parts is no longer on the critical path and now has one day of slack while
Fabricate parts which had two days of slack is now critical. Management would like
this solution since it does not appear to involve any additional costs.

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Case 6.1
Advantage Energy Technology Data Center Migration
Brian Smith, network administrator at Advanced Energy Technology (AET), has
been given the responsibility of implementing the migration of a large data center to
a new office location. Careful planning is needed because AET operates in the
highly competitive petroleum industry. AET is one of five national software
companies that provide an accounting and business management package for oil
jobbers and gasoline distributors. A few years ago, AET jumped into the
“application service provider” world. Their large data center provides clients with
remote access to AET’s complete suite of application software systems.
Traditionally, one of AET’s primary competitive advantages has been the
company’s trademark IT reliability. Due to the complexity of this project, Brian will
have to use a parallel method of implementation. Although this will increase project
costs, a parallel approach is essential if reliability is not to be compromised.

(Rest of case not shown due to length.)

Teaching Note: We recommend pointing out to students that this is a very sensitive
schedule with multiple critical paths. Students should recognize that a delay in any one of
the Switchover Meetings will not only extend the duration of the project but alter the
critical path configuration.

1. Generate a priority matrix for AET’s system move.

Priority Matrix

TIME PERFORMANCE COST

Constrain X
Enhance X
Accept X

Upon using this case the authors found several points of confusion. We recommend
making the following announcements before assigning this case:

A) Even though ordering Ventilation System, New Racks, and Power

Supplies/Cables should probably only take one day of actual work with the
remaining duration being the time necessary for the vendor to fill and ship the
order, assign these tasks the full duration for simplicity sake.
B) Likewise, the raised floor is likely to be completed sometime after the start of the
Renovation of the Data Center, students should still assume that City Inspection
cannot occur until the Renovation is entirely completed.

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2. Develop a WBS for Brian’s project. Include duration (days) and predecessors.

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3. Using a project planning tool, generate a network diagram for this project.

The Gantt chart is shown below.

Now, the network diagram is shown below. In order to make it fit, the diagram is so
small that it is hard to tell much about the diagram.

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Case 6.2
Shoreline Stadium Case
The G&E Company is preparing a bid to build the new 47,000-seat Shoreline
baseball stadium. The construction must start on July 3, 2017, and be completed in
time for the start of the 2020 season. A penalty clause of $250,000 per day of delay
beyond April 3 is written into the contract.

(Rest of case not shown due to length.)

1. Will the project be able to be completed by the April 3rd deadline? How long will
it take?

The project is estimated to take 945 days and be completed by Friday, March 28,
2020. This is only six calendar days ahead of schedule.

2. What is the critical path for the project?

Clear Stadium site+Demolish building+Set Up Construction site+Drive Support

Pilings+Pour Lower Concrete Bowl+Construct Upper Steel Bowl+Install Seats+
Construct Steel Canopy+Install Roof Tracks+Install Roof+Inspection.

3. Based on the schedule would you recommend that G&E pursue this contract?
Why? Include a one-page Gantt chart for the stadium schedule.

Some students will say “no” because on a project of this size and duration you would
want at least a one to two month buffer to absorb unexpected deadlines.

Others will say if you have confidence in your estimates then the answer should be “yes”
even with only a six day buffer. They should point out that overtime and working on
weekends could be used to stay on schedule if delays occur.

A few students may argue that G&E can endure limited penalty costs given the profit
margin for the project. While there is some truth to this logic, the loss of future business
due to damaged reputation is a strong counter argument against this line of reasoning.

The WBS and Gantt chart are shown below:

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