Network Analysis

Dr. Tisha Meriam Cherian

Introduction
• Project is composed of two or more jobs, activities or tasks that are
related one to other and all these should be completed in order to
complete the project.
• with specified quality and minimum cost of using resources such as
personnel, money, materials, facilities and/or space.
• An activity of a project can start only at the completion of many other
activities.
• Examples of projects include, construction of a bridge, highway,
power plant, repair and maintenance of an oil refinery or an air plane;
design, development and marketing of a new product, research and
development work, etc.
• A network is a combination of activities and events of a project.
• A network is a graphical presentation of arrows and nodes for
showing the logical sequence of various activities to be performed to
achieve project objectives.
• Network analysis provides techniques for planning, scheduling,
controlling, monitoring or coordinating large and complex projects
which consist of many activities
Techniques
• PERT (Programme Evaluation and Review Technique) was developed in
1956–58 by a research team to help in the planning and scheduling of the
US Navy’s Polaris Nuclear Submarine Missile project involving thousands of
activities. The objective of the team was to efficiently plan and develop the
Polaris missile system. This technique has proved to be useful for projects
that have an element of uncertainty in the estimation of activity duration,
as is the case with new types of projects which have never been taken up
before.
• CPM (Critical Path Method) was developed by E.I. DuPont company along
with Remington Rand Corporation almost at the same time, 1956-58. The
objective of the company was to develop a technique to monitor the
maintenance of its chemical plants. This technique has proved to be useful
for developing time-cost trade-off for projects that involve activities of
repetitive nature.
Objectives of Network analysis
Network analysis is a successful technique frequently used to plan,
monitor and control the projects involving thousands of activities
• Minimisation of total cost of a project
• Minimisation of total time of a project
• Minimisation of idle resources
• Minimisation of production delays, interruptions and conflicts
• To ensure optimum utilisation of human and other resources
• Planning, scheduling and controlling of projects
• To ensure minimum conflicts and unnecessary delays
• Project is represented in the form of a network for the purpose of analytical
solutions for scheduling and controlling its activities.
• A network consist of set of arcs which are connected through a set of
nodes
A
1 2

• The precedence relationship among various activities of a project can be

conveniently represented using a network
A B
1 2 3
• 2 methods of representing any project in the network form.
1. Activities on Arrows (AOA)
2. Activities on Nodes (AON)

• Activities on Arrows (AOA) is commonly used in the project

management
Activity
• Any individual operation which utilizes resources and has an end and a
beginning is called activity.
• An arrow is commonly used to represent an activity with its head indicating
the direction of progress in the project.
• 1. Predecessor activity – Activities that must be completed immediately
prior to the start of another activity
• 2. Successor activity – Activities that cannot be started until one or more of
other activities are completed but immediately succeed them
• 3. Concurrent activity – Activities which can be accomplished concurrently
• It may be noted that an activity can be a predecessor or a successor to an
event or it may be concurrent with one or more of other activities.
• 4. Dummy activity – An activity which does not consume any kind of
resource
• Dummy activities can be used to maintain precedence relationships only
when actually required.
• Dummy activity is an imaginary activity indicating precedence relationship
only to maintain a logic in the network. Duration of a dummy activity
is zero
How to represent an activity
• 1. Activity should be represented by an arrow connecting 2 nodes
• 2. All activities should be in forward direction, it may be upward or
downward direction but it can never be in reverse direction
• Activities should be either represented by numbers or alphabet
• All alphabets and numbers should be in ascending order
Event
• An event represents a point in time signifying the completion of some
activities and the beginning of new ones.
• Represents the start and the end point of an activity
• This is usually represented by a circle in a network which is also called
a node
Events- 3 types
➢Merge event

➢Burst event

➢Merge and Burst event

 Rules for Network Construction
• The starting and ending event of an activity are called tail event and head
event respectively
A
1 2

• The network should have a unique starting node (tail event)

• The network should have a unique ending node (head event)
• No activity should be represented by more than one arc in the network
• Looping among the activities must be avoided
Numbering the events- Fulkerson's rule
Critical Path Method (CPM)
• The critical path method or critical path analysis is a mathematics-based
algorithm for scheduling a set of project activities
• It is an important tool for effective project management
• The length of the critical path is the shortest time allowable for the
completion of the project
CPM consists of
• Planning the sequence of activities to be performed in a network
• Scheduling the time and resources
• Controlling the performances so that they are not deviationg from the
plans
Steps
• List all the activities and draw a network diagram
• Find the Earliest event time (TE) and Latest event time (TL) of each
event and show in the network diagram
• Calculate Earliest start time (EST), Earliest Finish Time (EFT), Latest
Start time (LST) and Latest Finish time (LFT) for each activity
• Determine the float for each activity
• Identify the critical activities (having zero floats)
• Draw double lines in the network diagram passing through critical
activities. The double line is the critical path
• Calculate the total project duration
Earliest and Latest event time
• Earliest Event Time (TE): Earliest occurrence time or the earliest event
time is the earliest at which an event can occur
• Eg: for event 2------E2

• Latest Event Time (TL): The allowable occurrence time or the latest
event time is by which an event must occur to keep the project on
schedule
• Denoted by L2
• Earliest Start Time (EST): The earliest start time of an activity is the
earliest time by which an activity can commence
• Equal to TE
• For the activity 2-3, EST id E2

• Earliest Finish Time (EFT): Earliest time it can finish the task
• EFT=EST+ Duration of the project
• Latest Finish Time (LFT): is the latest time by which an activity can be
finished without delaying the completion of the project.
• LFT=Latest expected time of head event
• For activity 2-3, LFT=L3

• Latest start time (LST): Latest time by which an activity can be started
without delaying the completion of the project
• LST=LFT-duration of the project
Slack and Float
• Slack: denotes the flexibility range within which an event can occur
• It is the difference between earliest event time and latest event time
• L2-E2

• Float: The range within which activity start time or its finish time may
fluctuate without affecting the completion of the project.
• Total Float: The time spent by which the starting or finishing of an
activity can be delayed without delaying the completion of the
project
• Total float=LFT-EFT or LST-EST

• Free Float: Difference between earliest finish time and earliest start
time of its successor activity
• Free float = EST(Successor)-EFT (Present activity)
• Independent float : It is amount of time an activity could be delayed if
preceding activities finish at their latest and subsequent activiy start
at their earliest.
• Free float – Tail event slack

• An activity whose float is zero is called critical activity

• Critical activity ..no slack. you cannot change the duration of any critical
activity if we delay any critical activity the overall duration will get delayed.
• Draw Network
• event
• Find the earliest and latest time to know the earliest expected time at
which the activities originating from the event can be started and to know
the latest allowable time by which the activity terminating will be complete
• ES,EF
• LS, LF
• ES=3 ie, earliest time for B required to start the activity is 3 and LS
• ES...forward Pass
• LF...Backward Pass
• Difference between ES and LS will be zero
 AOA – activity on arc/arrow
• Terminology used in Network construction
• Node: start or end of an activity
• Branch/arc: represent the actual activity and it consumes some resource
• Precedence Relation of Activity:
1. Activities that precedes
2. Activities that follow
3. Activities concurrent with it
To construct a network it requires list of individual activities, estimates of activity
duration and specifications of precedence relationships between various
activities involved in the project.
 General foundry example
• General Foundry, Inc., a metal works plant in Milwaukee, has long been trying to avoid the
expense of installing air pollution control equipment. The local environmental protection
group has recently given the foundry 16 weeks to install a complex air filter system on its
main smoke stack. General Foundry was warned that it will be forced to close unless the
device is installed in the allotted period. Lester Harky, the managing partner, wants to make
sure that installation of the filtering system progresses smoothly and on time.

• When the project begins, the building of the internal components for the device (activity A)
and the modifications that are necessary for the floor and roof (activity B) can be started.
The construction of the collection stack (activity C) can begin once the internal components
are completed and pouring of the new concrete floor and installation of the frame (activity
D) can be completed as soon as the roof and floor have been modified.
 General foundry example
• After the collection stack has been constructed, the high temperature
burner can be build (activity e), and the installation of the pollution
control system (activity F) can begin. The air pollution device can be
installed (activity G) after the high temperature burner has been built,
the concrete floor has been poured, and the frame has been installed.
Finally, after the control system and pollution device have been
installed, the system can be inspected and tested (activity H). (Source:
Quantitative Analysis for Management by Render et al. pp. 479)
Table
ACTIVITY Description

A Build internal components

B Modify roof and floor
C Construct collection stack
D Pour concrete and install frame
E Build high-temperature burner
F Install control system
G Install air pollution device
H Inspect and test
 CPM Deterministic time estimates
ACTIVITY IMMEDIATE DURATION
PREDECESSORS

A - 2
B - 3
C A 2
• A) Construct CPM Network
D B 4
• B) Determine Critical Path
E C 4
• C) Compute Total Float
• and Free Float for F C 3

• non-critical activities G D, E 5
H F, G 2
CPM
• A) Network Architecture

C (2)

A (2) 3 4 F (3)

H (2)
E (4)
1 6 7
D (4)
B (3)
G (5)
2 5
 CPM
• Determination of Critical Path

• i) Enumerate all paths and its completion times

• 1-2-4-6-7, 1-2-4-5-6-7, 1-3-5-6-7-8

• (A-C-F-H) (A-C-E-G-H) (B-D-G-H)

• 9 15 14

• ii) Phase I – det. Earliest start times (ES) of all nodes – Forward Pass

• Phase II – Det. Latest completion times (LC) of all nodes – Backward Pass

•
Critical Path in Network Analysis
• The notations used are

• (i, j) = Activity with tail event i and head event j

• Dij = Estimated completion time of activity (i, j)

• (Es)ij = Earliest starting time of activity (i, j)

• (Ef)ij = Earliest finishing time of activity (i, j)

• (Ls)ij = Latest starting time of activity (i, j)

• (Lf)ij = Latest finishing time of activity (i, j)

 C (2)
A (2) 2 4 F (3)
H (2)
1 E (4) 6 7
B (3) D (4)
• ESj = maxi [ ESi + Dij] 3 5 G (5)

• Node 1: ES1 = 0
• Node 2: ES2= maxi=1 [ ES1 + D12] = max [ES1 + D12] = 0+2 = 2
• Node 3: ES3= maxi=1 [ ESi + Di3] = max [ES1 + D13] = 0+3 = 3

• Node 4: ES4= maxi=2 [ ESi + Di4] = max [ES2 + D24] = 2+2 = 4

• Node 5: ES5= maxi=3,4 [ ESi + Di5] = max [ES3 + D35, ES4 + D45] = max [3+4, 4 + 4] = 8
• Node 6: ES6= maxi=4,5 [ ESi + Di6] = max [ES4 + D46, ES5 + D56] = max [4+3, 8+5] = 13
• Node 7: ES7= maxi=6 [ ESi + Di7] = max [ES6 + D67] = max [13+2] = 15
 C (2)
A (2) 2 4 F (3)
H (2)
• LCi - Backward Pass 1 E (4)
6 7

• LCi = minj [ LCj – Dij] B (3) D (4)

G (5)
3 5
• Node 7: LC7 = 15
• Node 6: LC6 = minj=7 [ LC7 - D67] = min [15 - 2] = 13
• Node 5: LC5 = minj=6 [ LC6 – D56] = min [13 - 5] = 8
• Node 4: LC4 = minj=5,6 [ LC5 – D45, LC6 – D46] = min [8 - 4, 13 - 3] = 4
• Node 3: LC3 = minj=5 [ LC5 – D35] = min [8 - 4] = 4
• Node 2: LC2 = minj=4 [ LC4 – D24] = min [4 - 2] = 2
• Node 1: LC1 = minj=2,3 [ LC2 – D12, LC3 – D13] = min [2 - 2, 4 - 3] = 0
 CPm

• Critical Path 2 4
• 1. ESi = LCi 2 4
0 C (2) 13
• 2. ESj = LCj 0 A (2) 2 4 F (3) 13
• 3. ESj – ESi = 1 E (4) 6
H (2)
7
15
15
• LCj – LCi = Dij B (3) D (4)
G (5)
3 5

3 8 Critical Path:
4 8 A-C-E-G-H
• One start node and one end node. One end node ensures that all
activities between the start and end node have been completed in
that time.
• The activities that fall on critical path are called critical activities
• The activity which does not lie on the critical path is called non-critical
activity.
• This non-critical activity may have some slack time the duration in the
activity can be extended without compromising with the
overall completion time of the project. Slack time can be a time in
which the start time of the project can be delayed without affecting
the completion of the project.
 CPM
• Determination of Total float and free floats
• Total Floats (Slack Time): the amount of time that a task can be delayed without
affecting the completion date of the project
• TFij = LCj – ESi – Dij
• = LCj – (ESi + Dij)
• = LCj – ECij - Earliest completion time of the activity
• TFij = LSij – ESi
• LSij is the latest start of the activity i,j
• LSij = LCj – Dij
• Free floats: It is the amount of time that the activity completion time can be
delayed without affecting the earlies start time of the immediate successor
activities in the network.
• FFij = ESj – ESi – Dij
• = ESj – (ESi + Dij)
• = ESj - ECij
 CPM
Activity (I,j) Duration (Dij) Total Float Free Float
(TFij) (FFij)
• Total float and Free floats
1-2 (A) 2 0 0
1-3 3 1 0
2-4 (C) 2 0 0
Critical Path:
A-C-E-G-H 3-5 4 1 1
4-5 (E) 4 0 0
4-6 3 6 6
FF <=TF
5-6 (G) 5 0 0
6-7 (H) 2 0 0
Application of CPM Technique (Managerial
Function)
• Planning: Planning is the most important project management tool, in
which the logic sequence of the jobs or activities to be performed, is
formalised. Gross requirement of materials, equipment and
manpower are also determined in this phase.
• Scheduling: is the determination time required for executing each
operation and the time order in which operation has to be carried out
to meet the plan objectives. It is the mechanical process of
formalising the planed functions, assigning the starting and
completion date to each activity of the project in such a manner that
the whole project proceeds in a logical sequence and in an orderly
and systematic manner
• Resource allocation: Allocation of resources is performed to achieve
the desired objectives. The resources means, labour, finance,
equipment, space. When these resources are limited, a systematic
method for allocation of resources become necessary.
• Controlling: is the process in which difference or deviation between
the plan and actual performances are reviewed after the project has
started. The analysis and correction of these deviations form the basic
aspect of control. In CPM, controlling is required not in respect of
physical progress of work, but also in respect of cost.
PERT
Time estimates
• Time is the most essential and basic variable
• A probabilistic approach is followed for time estimation
• 3 Time estimates are made for each activity
• Optimistic time estimates (to): shortest possible time in which an activity
can be completed, under ideal conditions. The time estimate represents
the time in which an activity or job can be completed if everything goes
well with no problems or adverse conditions
• Pessimistic time estimate (tp): it is the maximum time required to
complete the activity. The time estimate represents the time it might take
to complete a particular activity if everything went wrong and abnormal
situations prevailed.
• Most likely time (tm): it is the time which the activity will take most
frequently if performed a number of times. The time estimate lies
between the optimistic and pessimistic time estimates. Time estimate
reflects a situation where conditions are normal, things are usual and
there is nothing exciting.
Steps involved in PERT calculation
• Identify the events and activities and prepare a suitable network for
the given problem.
• Events are numbered in ascending order from left to right
• Obtain the various time estimates for each activity. They are most
likely (tm), the pessimistic (tp), and optimistic (to) estimates.
• Compute the expected time (te) for each activity
te = to+4 tm + tp
6
• Using the expected activity time estimate, determine the earliest event time (TE)
and the latest event time (TL) for each event
• Compute the float for each activity. The activity with zero floats are
the critical activities. Determine the critical path through the critical
activities.
• Find the total duration of the project by adding the duration of all the
critical activities
• Find variance of the time estimates of all activities.
𝑡𝑝 −𝑡0 2
• Variance of an activity=
6
• Variance of the project duration (𝜎 2 ) =
𝑠𝑢𝑚 𝑜𝑓 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒𝑠 𝑜𝑓 𝑡𝑖𝑚𝑒 𝑒𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑠 𝑜𝑓 𝑎𝑙𝑙 𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑖𝑒𝑠
• Find the probability of finishing the project on some fixed target by
using the table of normal distribution. The value of Z is obtained by
the equation
• Z=Due date- Expected date of completion
𝜎
Where 𝜎 = 𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛𝑛 𝑜𝑓 𝑡ℎ𝑒 𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 𝑝𝑎𝑡ℎ
= (𝑠𝑢𝑚 𝑜𝑓 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒𝑠 𝑜𝑓 𝑡ℎ𝑒 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑦
Application of PERT
• Project planning: To identify all the important events/activities which are
essential for completion of the project
• Time estimation: Estimates of the time required to perform each network
activity are made by incorporating the time required for completing each
of the activities in the network.
• Scheduling: The scheduling computation gives the earliest and the latest
allowable start and finish time for each activity. Also to identify the critical
path through the network.
• Resource allocation: The feasibility of each schedule must be checked
concerning manpower and equipment requirements
• Project control: When the network plan and the schedule have been
developed to a satisfactory extent, they are prepared to final form for use
in the field. The project is controlled by checking progress against the
schedule, assigning and scheduling manpower and equipment, and
analysing the effects of delays
PERT and CPM
• In PERT, emphasis is given on events while in CPM emphasis is given to
activities
• In CPM, time estimates for the completion of activities are with a fair
degree of accuracy while in PERT- time estimates are not so accurate and
definite
• In CPM, cost optimization is given prime importance. The time duration for
completion depends on cost optimization. In PERT, it is assumed that cost
varies directly with time. Time is the controlling factor
• PERT is a probabilistic model with uncertainty in activity duration while
CPM is a deterministic model with well-known activity times based on past
experience
• PERT is used for repetitive jobs while CPM is for non-repetitive jobs
• PERT is used for planning and scheduling research programs while CPM is
used for construction and business problems
Importance of CPM and PERT
• Helps the management to concentrate their attention to the critical
activities and their completion in time
• Provides the best way of planning and scheduling a project
• Gives complete information about duration, slackness etc of activities
• Suggests areas for increasing efficiency and reduction of costs
• Helps to formulate new schedules when the existing schedules
cannot be met
• Minimises delay in completion of the project
Disadvantages of network techniques
• The realistic time estimates are not obtained
• It is not easy to develop a clear logical network in some cases
• The level of network details cannot be detrmined properly in some
cases. The level of details varies from planner to planner and depends
on the judgement and experience
• Trained personnel in the network methodology is necessary but it is
lacking in many managements