Network Techniques in

Project Management

Module –II
RO (15th & 22nd and 11th & 16th Oct’18)
 Project Management
 The salient features of a project are:

 A project has identifiable beginning and end points.

 Each project can be broken down into a number of

identifiable activities which will consume time and
other resources during their completion.

 A project is scheduled to be completed by a target

date.

 A project is usually large and complex and has many

interrelated activities.

 The execution of the project activities is always

subjected to some uncertainties and risks.
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 Network Techniques

 Upto the end of 18th century, decision making in

general and project management in particular was:

- intuitive,
- depended primarily on managerial capabilities,
- experience, judgment and
- academic background of the managers.

 It was only in the early of 1900's that the pioneers of

scientific management, started developing the
scientific management techniques.

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 Network Techniques

 Forerunner to network techniques, the Gantt chart -

developed, during world war-I (1917), by Henry L
Gantt, for the purpose of production scheduling.

 PERT - Program Evaluation Review Technique.

Developed by the US navy in cooperation with Booz
Allen Hamilton & Lockheed Corporation for the Polaris
missile/submarine project in 1958.

 CPM – Critical Path Method. It was developed by

DuPont Inc. during the same period.
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 GANTT chart
 It shows Plan vs actual progress for a number of tasks through
horizontal bars on a time scale.

 It is effective, easily understandable and easy-to-read

method indicating the actual status wrt plan.

 A powerful device for communicating to senior management.

 It is helpful to trigger actions of expediting, sequencing and

reallocating resources among the tasks.

 It does require frequent updating. Not very helpful in the

hands-on task of managing the project.

 It has limitations when projects are complex. It will be very

difficult to follow multiple activity paths through the project.
Activity dependencies create limitations in this method. 5
Gantt chart, Bar chart, Milestone chart

Can you construct a Gantt chart of your Internship

project (at hindsight)?

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Gantt chart
 CPM
 The CPM (critical path method) system of networking is used,
when the activity time estimates are deterministic in nature.
For each activity, a single value of time, required for its execution,
is estimated.

 Used for controlling time and cost…….time / cost trade-off.

Activities can be crashed / expedited at extra cost to speed up
the completion time.

 It has a critical path with activities that cannot be delayed. It

has zero float /slack

 CPM was designed for construction projects and has been

embraced by construction industry and subsequently used
effectively for many manufacturing & service industries

 Now there are enough exceptions on its usage. It has started

being used even by research projects by Eli Lilly Company.8
 PERT

 PERT & CPM are quite similar and are combined for educational
presentations.

 The PERT (Project Evaluation and Review Technique) technique is

used, when activity time estimates are stochastic in nature.

 PERT has primarily been used for R&D projects, more common
on the ‘development’ side of it.

 The use of PERT has decreased sharply in recent times because

majority of the project management software generates CPM
networks.

 PERT networks can also be crashed / expedited.

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 PERT
 For each activity, three values of time (optimistic, most likely,
pessimistic) are estimated. Optimistic time (to) estimate is the
shortest possible time required for the completion of activity. Most
likely time (tm) estimate is the time required for the completion
of activity under normal circumstances. Pessimistic time (tp)
estimate is the longest possible time required for the completion of
activity.
 In PERT β-distribution is used to represent these three time
estimates. As PERT activities are full of uncertainties, times
estimates can not easily be converted in to cost data. PERT is an
event oriented technique. In PERT expected time of an activity is
determined by using the below given formula:

β distribution

 Variance of an activity is calculated as:

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 Network Construction (AOA)
 A network is the graphical representation of the project
activities arranged in a logical sequence represented by nodes
and depicting all the interrelationships among them. A network
consists of activities and events using arrows indicating the
direction of flow(AOA).
Activity
 A specific task or an activity is a physically identifiable part of a
project, which consumes both time and resources.
 Activity is represented by an arrow in a network diagram.

 Connects two events with a distinct start and an end.

 The head of an arrow represents the start of activity and the tail of
arrow represents its end.
 Activity description and its estimated completion time are written
along the arrow. An activity in the network can be represented by
a number of ways:
(i) by numbers of its head and tail events (i.e. 10-20 etc.), and
(ii) by a letter code (i.e. A, B etc.). All those activities, which must be completed
before start of activity under consideration, are called its predecessor activities.
 Network Construction
(i) Restriction list / predecessor- successor list on activities.
(ii) STOP LOOK LISTEN or STOP LOOK
LISTEN
(i) All those activities, which have to follow the activity under
consideration, are called its successor activities Activity Predecessor
Immediate

(ii) Immediate A _
Activity
Successor
B A
A B,C
C A
B D
D B
C E
E C

(iii)An activity, which is used to maintain the pre-defined

precedence relationship only during the construction of the
project network, is called a dummy activity.
(iv) Dummy activity is represented by a dotted arrow and does not
consume any time and resource.
(v) A notional activity with zero time showing dependency of an
activity on another. Facilitates computer application and for
beginners to prevent making error.
(vi) An unbroken chain of activities between events is called a path.
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 Basic rules in developing
project network
 Network flow typically from left to right.
 An activity cannot beginning until all preceding
connected activities have been completed.
 Arrows in network indicate precedence and flow.
Arrows can cross each other.
 Each activity has a unique identification number.
 An activity identification number has to be larger than
activities which are preceding it.
 Looping or recycling is not allowed.
 Conditional statements are not acceptable.
 When there are multiple starts , a common start node
should be used to indicate a clear project beginning.
The same holds good for the ending.
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Network Construction-Dummy activity
 Network Construction
Event
 An event represents the
accomplishment of some task. Event Representation

 In a network diagram, beginning and

ending of an activity are represented
as events.
 Each event is represented as a node in
a network diagram. An event does not
consume any time or resource.
 It is distinctly numbered. It facilitates
the flow of activity understanding and
in computation.

• Each network diagram starts with an initial event and ends at a

terminal event.

• Each node is represented by a circle and numbered by using the

Fulkerson's Rule.
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• Following steps are involved in the numbering
of the nodes:

 The initial event, which has all outgoing arrows and no incoming
arrow, is numbered as 1.

 Delete all the arrows coming out from the node just numbered
(i.e. 1). This step will create some more nodes (at least one) into
initial events. Number these events in ascending order (i.e. 2, 3 etc)

 Continue the process until the final or terminal node which has all
arrows coming in, with no arrow going out, is numbered.

 As a recommendation it must be noted that most of the projects are

liable for modifications, and hence there should be a scope of
adding more events and numbering them without causing any
inconsistency in the network.

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Fulkerson's Rule

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Rules for drawing network diagram
 Rule 1: Each activity is represented by one and only
one arrow in the network.
 Rule 2: No two activities can be identified by the
same end events.
 Rule 3: Precedence relationships among all activities
must always be maintained.

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Rules for drawing network diagram
 Rule 4: Dummy activities can be used to maintain
precedence relationships only when actually required.
Their use should be minimized in the network diagram .
 Rule 5: Looping among the activities must be avoided.

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 Some definition
 Earliest Start (ES) – the earliest time and activity can begin
when all preceding activities are completed as rapidly as possible.

 Latest Start (LS) – the latest time and activity can be initiated
without delaying the minimum project completion time.

 Earliest Finish (EF)- the sum of ES and the activity’s duration

(D).

 Latest Finish (LF) – the LS added to the duration (D).

 Total Float (TF) – it is the cushion in the schedule. The amount

of surplus time or leeway allowed in scheduling activities to avoid
interference with any activity on the network critical path: the
slack between the earliest and latest start times (LS - ES = TF).

 Critical path - The path in the network which has no leeway in

scheduling and consequently having zero float, 20
Calculation of Time Estimates in CPM
 In the project network given in figure below,
activities and their durations are specified at
the activities. Find the critical path and the
project duration.

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 Calculations in Network Analysis
 Total completion time of the project
 Earliest time when each activity can start (i.e.
earliest start time)
 Earliest time when each activity can finish (i.e.
earliest finished time)
 Latest time when each activity can be started
without delaying the project (i.e. latest start time)
 Latest time when each activity can be finished
without delaying the project (i.e. latest finish time)
 Float on each activity (i.e. time by which the
completion of an activity can be delayed without
delaying the project)
 Critical activity and critical path.
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The symbols used in the calculations
Symbol Description

Ei Earliest occurrence time of event i

Lj Latest allowable occurance time of event j

tEi-j Estimated completion time of activity (i,j)

(EST)ij Earliest starting time of activity (i,j)

(EFT)ij Earliest finishing time of activity (i,j)

(LST)ij Latest starting time of activity (i,j)

(LFT)ij Latest finishing time of activity (i,j)

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 Computation

 (a) Forward Pass Computations :

 (b) Backward Pass Computations :



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 Calculation of Slack
 Event slack is defined as the difference between the
latest event and earliest event times.

 Slack for head event = Lj – Ej

 Slack for tail event = Li – Ei

 The calculations for the above taken example network

are summarised below in the table.

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 S(i)
Predecessor Successor i-j
tE (EST)ij (EFT)ij (LST)ij (LFT)ij
Event i Event j
Slack
5 10 7 0 7 0 7 0
5 15 12 0 12 7 19 -
5 20 17 0 17 5 22 -
10 20 15 7 22 7 22 0
10 25 9 7 16 21 30 -
15 30 11 12 23 19 30 7
20 25 5 22 27 25 30 -
20 30 8 22 30 22 30 0
25 35 10 27 37 30 40 3
25 45 15 27 42 35 50 -
30 35 10 30 40 30 40 0
30 40 8 30 38 35 43 -
35 45 10 40 50 40 50 0
40 45 7 38 45 43 50 5

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 Determination of Critical Path
 The sequence of critical activities in a network is called the critical path. The activities with
zero slack of head event and zero slack for tail event, are called as critical activities. In the
taken network, the following activities are critical activities:
5 - 10, 10 - 20, 20 - 30, 30 - 35, 35 - 45.
Thus the critical path is
A - E - G - K - M.
Critical path duration is 7 + 15 + 8 + 10 + 10 = 50.

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 PERT
Calculation of Expected Time & Variance of a Path in PERT
 The Expected Time of a chain of activities in series, is the sum of
their expected times.
 Similarly the variance of the path, is the sum of variances of
activities on the path.
 In Figure below, three activities A,B and C are connected in
series, (i.e. form a path). Their time estimates to-tm-tp are
given along the activity arrows. The expected time of the path 1-
2-3-4 is calculated as:

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Estimated time in probabilistic condition

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 Probabilistic time related network
As the length of the path, that is the number of activities connected in
series increases, the variance of the path and hence the uncertainty of
meeting the expected time also increases.
An Example
 In the network of figure below, the PERT time estimates of the activities
are written along the activity arrows in the order to-tm-tp. Compute the
expected time and variance for each activity. Also compute the expected
duration and standard deviation for the following paths of the network :
a) 10-20-50-80-90 (b) 10-30-50-70-90 (c) 10-40-60-80-90

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Project Management
 PERT
 The computation of expected times and variances for different
activities are carried in a table given below.
Activity Time Estimates Expected Time Variance

ij to tm tp tE σ2
10 20 6 9 12 9.00 1.00
10 30 359 5.33 1.00
10 40 10 14 18 14.00 1.78
20 50 7 10 13 10.00 1.00
20 70 348 4.5 0.69
30 50 4 10 12 9.33 1.78
40 50 8 11 14 11.00 1.00
40 60 5 10 15 10.00 2.78
50 70 345 4.00 0.11
50 80 11 15 17 14.67 1.00
60 80 7 9 12 9.17 0.69
70 90 4 8 10 7.67 1.00
80 90 679 7.17 0.25

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Project Management 32
Network technique - AON

RO
 Basics
 Two methods– AOA: Activity-on-Arrow & AON: Activity-on-
Node.
 Computerization of PM techniques has brought visibility to AON.

 AON has now dominated nearly all project plans.

 Activity is represented by the Node.

 Total Slack – amount of time an activity can be delayed without

delaying the project. It is the time the activity can exceed its early
finish time without affecting the project end time. It is (LF-EF).

 Free Slack – amount of time an activity can be delayed without

delaying any immediately following (successor) activity. It is
the amount of time an activity can exceed its early finish time
without affecting the early start time of any successor. It can
never be negative. Activities that occur at the end of the chain of
activities where you have a merge activity can have free slack.
 Node details How soon
How soon can
can activity
activity finish?
start?

ES ID EF
Early Start Identificati Early
How long
can on Finish
activity be
delayed? SL Description
Slack/Floa
t
LS DUR LF
Late Start Duration Late Finish
How late
can activity How late
start? can activity
finish?

CP- Critical path with longest path when

delayed will delay the project.
Example

Activi Description Preceding Activity

ty activity duration days
A Define requirements None 10
B Assign Teams A 5
C Design hardware A 25
D Code software B 20
E Build and test hardware C 50
F Develop Patent request C 15
G Test Software D 35
H Integrate systems E, F, G 15
AON network
AON forward pass
AON Backward pass
Completed Forward & Backward pass
Exercise 1
ID Activity Predecessor Duration

Start None
A E,D 7
B F,G 17
C H 12
D I,J 9
E F,G 15
F J,I 5
G K,L 8
H K,L 11
I FINISH 15
J M 10
K M 10
L N 8
M FINISH 10
N FINISH 7
Finish
Exercise 2

ID Activity Predecessor Duration

A Order review NONE 2

B Order standard parts A 15
C Produce Standard parts A 10
D Design custom parts A 13
E Software development A 18
F Manufacture custom C, D 15
hardware
G Assemble B, F 10
H Test E,G 5
Exercise 3

ID Activity Predecessor Duration

A Survey None 5
B Soils report A 20
C Traffic design A 30
D Lot layout A 5
E Approve design B,C,D 80
F Illumination E 15
G Drainage E 30
H Landscape E 25
I Signing E 20
J Bid proposal F,G,H,I 10