1. Business Decision Making
Project Management
&
Network Analysis
K. P.
LSBM

2. Learning Outcomes Understand Project Management.
By the end of this session, students should be able to:
Understand Project Management.
Explain Network Analysis.
Represent projects using Network Diagrams.
Calculate total duration of projects.
Workout activities in the Critical Path.
LSBM

3. Project Management
A project is 'an undertaking that has a beginning and an end and is carried out to meet established goals within cost, schedule and quality objectives' (Haynes, Project Management).
Spinner (Elements of Project Management) defines a project as having following characteristics.
'There is a specific start and end point.'
'There is a well-defined objective.'
'The project endeavour is to a degree, unique and not repetitious.'
'The project usually contains costs and time schedules to produce a specified product or result.'
'A project cuts across many organisational and functional lines. '
BPP (2013, p372)
LSBM

4. Objectives of Project Management
Broadly speaking, the objectives of project management include:
Quality: The end result should conform to the proper specification. In other words, the result should achieve what the project was supposed to do.
Budget: The project should be completed without exceeding authorised expenditure.
Timescale: The progress of the project must follow the planned process, so that the result is ready for use at the agreed date. As time is money, proper time management can help contain costs.
BPP (2013, p374)
LSBM

5. Project Lifecycle
It is possible to identify all the stages of a typical project, whether it is a construction project or system design project.
The project life cycle has the following stages:
Conceiving and defining the project.
Planning the project – this involves three stages, once the basic project objective and the underlying activities have been agreed.
Break the project down into manageable units. This process establishes a Work Breakdown Structure.
For each unit, resources needed must be estimated, broken down into materials, money and time.
The varying time and resource requirements of each sub-unit are then estimated, and coordinated into a planning framework to schedule and group of activities. Gantt charts and network analysis may be used for coordination and scheduling of activities in groups. Costing is also part of the project planning stage.
BPP (2013, p374)
LSBM

6. Project Lifecycle Stages – Contd.
Carrying out the plan (Project Implementation) and Control – Project control charts use budget and schedule plans to report cumulative time and cost so that variances can be calculated.
Completing and Evaluating the project.
Remember that, in all stages of the project, the most important guiding factors are quality (of design and conformance), cost and time.
BPP (2013, p375)
LSBM

7. Network Analysis
Network analysis is basically concerned with the deployment of available resources for the completion of a complex task.
It is a technique for planning and controlling large projects, such as construction work, research and development projects or the computerisation of business systems
Network analysis helps managers to:
Plan when to start various tasks
Allocate resources so that the tasks can be carried out within schedule
Monitor actual progress, and to find out when control action is needed to prevent a delay in completion of the project.
The events and activities making up the whole project are represented in the form of a diagram or chart.
Network analysis is sometimes called critical path analysis (CPA) or critical path method (CPM).
BPP (2013, p379)
LSBM

8. Drawing Network Diagram for Critical Path
Network diagram consists of ‘Events’ (Circles) and ‘Activities’ (Arrows).
Events are numbered to represent ‘Events’ start Or completion.
Arrows represent activities and duration as shown in the diagram below.
Circles (also called Nodes) are usually divided into 3 sections to indicate Earliest Event time (EET) and Latest Event Time (LET) as shown below.
Events number generally start at 1.
EET generally starts from ‘0’ signifying event initiation.
LSBM

9. Drawing Network Diagram for Critical Path
At the outset, we start at event 1 with its earliest starting time of 0, as shown below.
Arrow is drawn with ‘Activity’ on top and duration just below it, as shown.
EET
Activity 1 A 5
Duration
Event Number
Nodes and arrows are added/drawn to reflect the activities chronologically and carefully following the dependencies and indicating the durations.
The convention, however, is 2 separate activities must not start and end with same event.
In such situations, a ‘Dummy’ activity is used, as shown below - Activities ‘B’ & ‘C’ started at same event – 2; and would have ended at same event 3; but a dummy is used to address this. Dummy activity has ‘0’ duration.
LSBM

10. AC4.2 Drawing Network Diagram for Critical Path
Examples Worked Out!
Thurnon plc are to initiate a project to study the feasibility of a new product.
Activities with their estimated durations are listed below.
Draw a Network diagram to find out the total duration and critical path.
LSBM

11. AC4.2 Drawing Network Diagram for Critical Path5 1
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
LSBM

12. AC4.2 Drawing Network Diagram for Critical Path5 1 B 2
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
LSBM

13. AC4.2 Drawing Network Diagram for Critical Path5 1 B 2
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
LSBM

14. AC4.2 Drawing Network Diagram for Critical Path5 D 5 1 B 2
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
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15. AC4.2 Drawing Network Diagram for Critical Path5 D 5 1 E 3 B 2
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
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16. AC4.2 Drawing Network Diagram for Critical Path5 D 5 1 E 3 B 2
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
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17. AC4.2 Drawing Network Diagram for Critical Path5 D 5 1 5 G 4 E 3 B 2
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
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18. AC4.2 Drawing Network Diagram for Critical Path5 D 5 1 5 G 4 E 3 B 2 3 H 6
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
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19. AC4.2 Drawing Network Diagram for Critical Path5 D 5 1 5 G 4 E 3 B 2 3 6 H 6 I 2
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
LSBM

20. AC4.2 Drawing Network Diagram for Critical Path5 D 5 1 5 G 4 7 J 6 E 3 I 2 B 2 3 6 H 6
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
LSBM

21. AC4.2 Drawing Network Diagram for Critical Path5 D 5 1 5 G 4 7 8 J 6 E 3 I 2 B 2 3 6 H 6
The total duration of the project is ____ weeks.
The Critical Path is ___________________.
LSBM

22. AC4.2 Drawing Network Diagram for Critical Path7 C 2 F 2 2 5 A 5 D 5 1 5 10 G 4 7 16 7 22 J 6 E 3 I 2 B 2 3 8 6 14 H 6
The total duration of the project is 22 weeks.
The Critical Path is ___________________.
LSBM

23. AC4.2 Drawing Network Diagram for Critical Path
The Curvy Blue arrows show the method of calculation of durations of EET.
Highest Value selected for multiple activities ending nodes. Eg: Node 6 & 7. 4 7 C 2 F 2 2 5 A 5 D 5 1 5 10 G 4 7 16 7 22 J 6 E 3 I 2 B 2 3 8 6 14 H 6
The total duration of the project is 22 weeks.
The Critical Path is ___________________.
LSBM

24. AC4.2 Drawing Network Diagram for Critical Path7 14 C 2 F 2 2 5 A 5 D 5 1 5 10 12 G 4 7 16 7 22 J 6 E 3
The Curvy Orange arrows show the method of calculation of LET (starting from end, subtracting the durations & taking smallest values) I 2 B 2 3 8 6 14 H 6
The total duration of the project is 22 weeks.
The Critical Path is ___________________.
LSBM

25. AC4.2 Drawing Network Diagram for Critical Path7 14 C 2 F 2 2 5 A 5 D 5 1 5 10 12 G 4 7 16 7 22 J 6 E 3 I 2 B 2 3 8 6 14 H 6
Nodes where “EET = LET” signifies the Critical Path.
The total duration of the project is 22 weeks.
The Critical Path is A, E, H, I, J.
LSBM