1. Overview Definition of an Activity Network Diagram History Basic Terms
How can it be used in your organization?
How the diagram works
Example
Activity Network Diagram Exercise
Summary
These slides will outline the basic process of an activity network diagram. Terms, procedures, and basic examples will be used to further explain the control capabilities and advantages of using this tool.

2. Definition of an Activity Network Diagram
Also known as the Program Evaluation Review Technique (PERT) or Critical Path Diagram
Tool used to control the length of projects
Takes into account many aspects of projects: task times, slack times, critical tasks, etc.
Activity network diagrams are also referred to as Program Evaluation Review Technique(PERT) diagrams or Critical Path Diagrams. Their main purpose is to control the length of projects for companies. They set guidelines for different teams involved in a project to follow and allow for companies to view the progress of the project as a whole.

3. Definition of an Activity Network Diagram (cont.)
Designed for research and development-type projects
Determines a probability distribution for a project
It was a process originally designed for research and development projects, but was expanded into different aspects of company life. It not only shows project progression, but can also be used to gain statistical knowledge about the steps of the process.

4. History Developed by the U.S. Department of Defense
First used as a management tool for military projects
Adapted as an educational tool for business managers
The history the PERT diagram is fairly obvious. Most project planning and control processes come from the military. They get developed there and spread into the business environment. Tools that come from the military are favored because of the reliability that if they worked there, they should definitely work for a company project.

5. Basic Terms Basic Vocabulary of the PERT Diagram:
Activity – part of the project represented by an arrow or line
Best Estimate(B) – earliest completion time
Critical path(CP) – the most time consuming path through the diagram with no slack time
Earliest Start Time(EST) – earliest possible time for an activity to begin
Network – the project shown graphically
Most likely estimate(M) – length of time probably needed
An activity requires time and resources. That is why arrows and lines connect different parts of a project. Most of the definitions are self-explanatory.

6. Basic Terms (cont.) Expected Time(ET) – the average duration time
Event – represents the start or finish of one or more events (shown as a circle, square, or other symbol)
Latest Start Time(LST) – latest time an activity can begin and still be completed before the next activity
Slack Time – latest start time minus earliest start time for an activity
Worst estimate(W) – pessimistic time estimate
One term that is not mentioned here is project. A project must involve more than one activity and have an aim or a goal. It must have a beginning and an end with steps involved in the middle to complete it. It must also have a budget and schedule of completion.

7. How can it be used in your organization?
Brainstorm ideas of where activity network diagrams could be utilized in your business practices…
Brainstorm and think of ideas in your company where this process could be used and applied. It could involve almost any short term or long term process or plan, but cannot be used in every situation.

8. How can it be used in your organization?
Finding minimum completion times
Determining maximum completion times
Value of time for each step in the project
Assigning specified times for parts of the project
Creates a realistic schedule for the company
Talk about different ideas being brought to the surface.

9. How the diagram works Basic Rules:
All preceding activities must be completed before the project can begin
The arrows represent the logical precedence of the project
The rules for this type of diagram are not too strict, but most of them are critical in order to complete a functioning diagram and make a project timeline work.

10. How the Diagram Works (Cont.)
Procedure for development:
Identify all activities and relationships among them
Sketch the diagram
Estimate the times for each activity, or node, in the diagram
Determine the critical path
Evaluate the diagram for milestones and target dates in the overall project
Some other secondary steps include: selecting the right teams for different parts of the project, deciding which activities can be done simultaneously, and scheduling activities for each team or project group.

11. Activity Network Diagram
Example
Activity Network Diagram A D C F
Lines or arrows in the diagram do not reflect upon anything involved in the project. The length and direction do not apply any certain meaning to a step and do not have any significance. B E

12. Exercise
Given the following formula, data, and diagram, determine the critical path and the expected time of the project.
Time is represented in days
ET = 4(M) + 1(B) + 1(W) / 6
A = 2, B = 3, C = 1, D = 4, E = 3, F = 2, G = 2, H = 1, and I = 3
Write down these numbers and use them for the diagram on the next slide.

13. Exercise (cont.) A D G C F I B E H
Match the numbers with the appropriate nodes and start applying the terms learned earlier. H

14. Begin the Analysis Remember your steps for PERT diagrams:
Using the given diagram, list all the steps
Determine task times
Determine relationships between the tasks
Find the earliest start time
Find the latest start time
Determine slack and the critical path
Critical Path = B-C-D-F-G-I or 15 days
ET = 4(M) + 1(B) + 1(W) / 6
ET = 4(14) + 1(12) + 1(15) / 6
ET =
ET = 83 / 6
ET = 14 days

15. Summary Review the exercise Advantages of PERT Disadvantages of PERT
Odds and Ends
Start summary.

16. Did you arrive at the correct answer? Do these answers make sense?
Review the Exercise
Did you arrive at the correct answer?
Do these answers make sense?
Go over the answers and make sure everyone understands them.

17. Advantages of PERT Diagrams
Projecting plans before they begin
Helps to separate planning and scheduling functions of a project
Controls projects
Clarifies maintenance of the plan
Shows dependency of different aspects of the project
There are many advantages to using PERT diagrams in business projects. Another advantage to using them is forcing management to take an analytical approach to projecting future plans. Also, it meets many contractual requirements of other firms your company may be dealing with in the project.

18. Advantages of PERT Diagrams
Allows for concentration on the steps themselves and not the time required for each
Represents a realistic schedule
Focuses attention on critical aspects of the plan
Changes can be made easily in the project
More advantages explained.

19. Disadvantages of PERT Diagrams
Cannot handle all specific problems that arise in each step of the project
Different graphical representations can be made easier in other types of control processes
Although the advantages are more numerous than the disadvantages, PERT diagrams do have some downfalls. These disadvantages could possibly hinder project steps and should be analyzed before any type of plan is set. It is managements responsibility to inquire about possible shortcomings of this process control tool and adjust the project planning steps as necessary.

20. Odds and Ends
Activity Network Diagrams have many more advantages than disadvantages
They are used in all types of businesses
The topics that were covered should act as the key in helping you lead your company in their next business project
Activity network diagrams are a fundamental building block of process control methods used by many companies in today’s business world. They are very useful in providing management with the tools they need to lead major internal projects and should be viewed as a supplement to your business repertoire.

21. Works Cited
Bedworth, David D. and James E. Bailey. Integrated Production Control Systems. New York: John Wiley & Sons, 1987.
“PERT”. Internet. s/rnew/perthome.html. 12 February 2001.
Stamatis, D.H. TQM Engineering Handbook. New York: Marcel Decker, Inc. , 1997.
Bibliography.