Submitted By:- Submitted To:-

Vishal Shakya Dr. Suhel Ahmad

MBA (Finance) DMS, BBAU
Roll No.- 226228 Lucknow
 Network Diagram
And
Program Evaluation
Review Technique (PERT)
What Is a Network Diagram
 A network diagram is a graphical representation of a
project and is composed of a series of connected
arrows and boxes to describe the inter-relationship
between the activities involved in the project.
 Boxes or nodes represent the activity description, and
arrows show the relationship among the activities.
 Network diagrams are used by Project Managers to
track the progress of activities during the course of the
project. In other words, they represent the workflow of
the project.
 Project network diagrams help everyone involved in
the project to visually track the progress of every phase
of the project from its inception to its completion.
 The boxes denote tasks and responsibilities, and the
arrows denote the sequence in which the tasks must be
completed and the schedule.
Types of Network Diagram
 Project network diagrams can be of two types:
1. Arrow diagram method (ADM): Also called the
activity network diagram, the ADM uses arrows to
symbolize the project’s associated activities.
Unfortunately, ADMs aren’t used much these days,
though it’s still a good idea to be familiar with them
in case you happen to find one in use.
 Advantages of the ADM are as follows:
i. Simple to create
ii. Easy to understand
iii. Helps track project schedule
iv. Helps in ‘what if’ analyses
Types of Network Diagram
2. Precedence diagram method (PDM): The Precedence
Diagram Method enjoys heavy use in today’s project
management circles and is considered to be a more
efficient method for ADMs. Each node, or box, represents
an activity, while the arrows symbolize the relationships
between different activities.
 Here are the four ways of developing the diagram and
connecting the tasks based on precedence:
 Finish-Start: An activity has to be completed before starting the
next activity
 Start-Start: Both activities can start together
 Finish-Finish: Both tasks need to finish together
 Start to Finish: This is a rare dependency and requires one activity
to start before the other can be finished
 Advantages of the PDM are as follows:
i. Makes planning more efficient by focusing on relationships
and dependencies between activities
ii. Helps identify missing tasks
iii. Critical tasks can be identified and prioritized
iv. Helps in evaluating alternatives
Program Evaluation Review
Technique (PERT)
 Program Evaluation Review Technique (PERT) is a
project management planning tool used to calculate
the amount of time it will take to realistically finish a
project.
 PERT charts were created in the 1950s to manage the
creation of weapons and defense projects for the US
Navy.
 PERT charts are used to plan tasks within a project —
making it easier to schedule deliverables and
coordinate with team members
 A PERT chart uses circles or rectangles called nodes to
represent project events or milestones. These nodes
are linked by vectors, or lines, that represent various
tasks and their dependencies.
 A PERT chart allows managers to evaluate the time
and resources necessary to manage a project.
 However with PERT, you create three different time
estimates for the project:
 The shortest possible amount of time each task will take
 The most probable amount of time
 The longest amount of time tasks might take if things
don't go as planned
Advantages of PERT
 A PERT chart allows a manager to evaluate the time and
resources necessary to complete a project. It also allows the
manager to track required assets during any stage of
production in the course of the project.
 PERT analysis incorporates data and information supplied
by a number of departments. This combining of
information encourages department responsibility and
identifies all responsible parties across the organization.
 Finally, PERT charts are useful input for what-if analyses.
Understanding the possibilities concerning the flow of
project resources and milestones allows management to
achieve the most efficient and useful project path.
Disadvantages of PERT
 The information that goes into a PERT chart can be
highly subjective. They may include unreliable data or
unreasonable estimates for cost or time.2
 PERT charts are deadline-focused and might not fully
communicate the financial positioning of a project.
 Creating a PERT chart is labor-intensive, and
maintaining and updating the information
requires additional time and resources. Continual
review of the information provided, as well as the
prospective positioning of the project, is required for a
PERT chart to be of value.2