1. Project Management Using Network Analysis By Prof. Nadpurohit

2. Project Planning & Scheduling CPM & PERT Techniques WBS Network drawing Network Analysis Updating of Network Project Cost v/s Project Completion time Time Cost Trade off Crashing of Project Completion time Resource Management Types of resources Resource Smoothening & Resource Leveling Project Control Earned Value Management System Sept 2010Slide 2 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

3. References: PMBOK Project Management by K Nagarajan, New age International Publications Projects by Dr. Prasanna Chandra Sept 2010Slide 3 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

4. “A Project” Temporary endeavor undertaken to create a unique Product, Service or Result Sept 2010Slide 4 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

5. Project Characteristics Temporary: means every Project has a finite duration (a definite beginning and a definite end). Projects are not ongoing efforts. Temporary characteristics of a Project applies to Opportunity Project team working as a unit Temporary characteristics of a Project does not apply to: Product, Service or result generated by the Project. Sept 2010Slide 5 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

6. Project Characteristics (continued) The driving forces that create stimuli for a Project are typically referred to as Problems, Opportunities or Business requirements. End of Project is reached when Projects objectives have been achieved. When it becomes clear that the Project objectives will not or cannot be met and the Project is terminated. The need for the Project no longer exists and the Project is terminated. Sept 2010Slide 6 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

7. Project Characteristics (continued) Uniqueness an important characteristic of Product, Service or Result Project can create A Product or artifact which is quantifiable, and which is either an end item itself or a component item. A capability to perform a service, such as business functions supporting production or distribution. A result such as outcomes or documents Sept 2010Slide 7 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

8. Relation between Product and Project Life Cycle Project Life Cycle Initial IDEAIDEA IntermediateFinalProduct Operations Product Life Cycle Business Plan Upgrade Divestment Sept 2010Slide 8 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

9. Project v/s Operational work Organization Performs Work to achieve objectives Projects. Temporary and Unique. Purpose to achieve objective And then terminate Operations. Ongoing & repetitive. Objective is to sustain business Both Projects & Operations are performed by people, constrained by resources & are planned, executed and controlled Sept 2010Slide 9 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

10. Some examples of Projects Developing a new Product or Service Effecting a change in organization structure Designing a new transportation vehicle Developing a new or modified Information system Constructing a building Building a water system for a community Running a campaign for a Political Party Implementing a new business Process Responding to a contract solicitation Sept 2010Slide 10 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

11. Projects and Strategic Planning Projects are a means of organizing activities that cannot be addressed with the organizational normal operational limits Projects are often utilized as a means of achieving an organizations strategic plans Sept 2010Slide 11 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

12. Projects and Strategic Planning Strategic considerations that lead to Project authorization. Market demand. Organizational need. Customer request. Technological advance. Legal Requirement Sept 2010Slide 12 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

13. Industrial / Commercial projects are complex in nature. Handling of these projects calls for a systematic approach which takes into account –Identification of numerous activities –Required time and other resources –Availability of these resources –Coordination and control Sept 2010Slide 13 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

14. Program Evaluation and Review Technique - PERT Developed by US Department of Navy for their “Polaris missile” program in 1958. Is a form of network analysis technique consisting of –Translating the proposed job into a model by drawing a network of activities involved. –Evaluating the network and manipulating it to the extent possible so as to ensure that there will be a reasonable chance of achieving the objective (viz. completing the job) with in the constraints of time and other resources. –Using the network to monitor and control the job. Sept 2010Slide 14 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

15. PERT Is of special relevance to –One-time tasks such as construction of dams, factories, bridges etc. –Manufacture of ships, missiles and such other activities which though repetitive are of huge proportion –R&D projects –Major repairs and overhaul of plant / machinery – Organization of large events / conferences. Sept 2010Slide 15 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

16. Critical Path Method (CPM) CPM originated in Du Pont de Nemours company almost at the same time in 1958. CPM is also a Network analysis method and differs from PERT only in the approach to the network analysis. Sept 2010Slide 16 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

17. Gantt Chart A planning and control tool used for scheduling jobs and depicting the progress made from time to time. In a Gantt chart, a division of space represents both an amount of time and an amount of work to be done in that time Sept 2010Slide 17 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

18. Sept 2010Slide 18 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

19. Gantt Chart Merits –Remarkably compact for the amount of information it provides for planning and controlling jobs. –Easy to draw and read –Its pictorial representation of time serves as an aid to minimize idleness and loss of time. Demerits –Does not depict the interdependencies of jobs –Does not aid getting information on the probability of completion of a job. Sept 2010Slide 19 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

20. Stages in application of PERT/CPM Drawing the network –The purpose of this is to identify all the events / activities that are essential for completion of a Project and to bring out their interrelationship to satisfy the technological / logical sequencing requirements. Network Analysis –By incorporating the time required for completing each of the activities in the network, the project duration as well as the criticality of the activity can be found out. At this stage it is also possible to compute the probability of completing the Project or part of the project in a given specified time Sept 2010Slide 20 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

21. Stages in application of PERT/CPM Resource Allocation and Scheduling –Based on the network calculation and assessment of resources required for each of the activities, the plan is translated into a time schedule. If it is possible to expedite the activities by incurring additional cost, the economics of doing so are also examined before finalizing the schedule. Sept 2010Slide 21 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

22. Stages in application of PERT/CPM Project control –This stage calls for periodic updating of the network amongst other things to monitor the progress of the Project, and making necessary changes in the schedules to ensure completion of the Project as close to the target time as possible. Sept 2010Slide 22 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

23. Concepts / Definitions Project Temporary endeavor undertaken to create a unique Product, Service or Result. Work breakdown structure (WBS) A work breakdown structure is a deliverable oriented grouping of project elements that organizes and defines the total scope of the project. Work not in the WBS is outside the scope of the project. As with the scope statement, the WBS is often used to develop or confirm a common understanding of project scope. Each descending level represents an increasingly detailed description of the project elements. Sept 2010Slide 23 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

24. Concepts / Definitions Activity Is a task or item of work to be done, that consumes time, effort, money or other resources. Sept 2010Slide 24 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

25. Event –Events do not consume resources. –Events are represented by circle –An Event is realized only when all activities terminating at it are completed. Concepts / Definitions Sept 2010Slide 25 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

26. Network diagram –Shows how the tasks will flow from beginning to end Sept 2010Slide 26 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit Concepts / Definitions

27. Steps involved in drawing a Network Identify the End objective and define the events which are precedent to the End objective List out the activities required to accomplish these events Draw the events and activities and connect them according to the defined logic. Now for every activity answer the following questions –What should precede it –What needs to follow it –What can be done concurrently Modify redraw the diagram to suit answers for above. Check for errors Number the events as per convention. Sept 2010Slide 27 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

28. Activity sequencing: tools and techniques Network diagram –Shows how the tasks will flow from beginning to end –Types Precedence diagramming method (PDM) Arrow diagramming method (ADM) Sept 2010Slide 28 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

29. Precedence diagramming method (PDM) : method of constructing a project network diagram to represent the activities using nodes and to represent dependencies using arrows Also called activity on node D C B A start finish Activity sequencing: tools and techniques Sept 2010Slide 29 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

30. PDM could have four types of dependencies –Finish-to-start –Finish-to-finish –Start-to-start –Start-to-finish Activity sequencing: tools and techniques Sept 2010Slide 30 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

31. Arrow diagramming method (ADM) : method of constructing project network diagram using arrows to represent activities and connecting them at nodes to show their dependencies. The nodes are Events Activity sequencing: tools and techniques Sept 2010Slide 31 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

32. Concepts / Definitions Activity Is a task or item of work to be done, that consumes time, effort, money or other resources. It is represented by an arrow with its head indicating direction of the progress in the project. i.e. The tail of the arrow marks the commencement of the activity and the Head of the arrow marks the completion of the activity. 5 The number 5 over the arrow indicates the Time required for completion of the activity Sept 2010Slide 32 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

33. Event –An activity is bound by 2 events referred to as Tail event and Head event. –Events do not consume resources. –Events are represented by circle –An Event is realized only when all activities terminating at it are completed. Concepts / Definitions Tail Event Head Event Activity 12 A Activity A or 1-2 requiring 5 units of time, Event 1 Event 2 5 Sept 2010Slide 33 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

34. Network –A network is a graphic representation of a Project’s operation and is composed of activities and events Concepts / Definitions Event 1 is Start of Project and does not have any activity before it Event 5 is End of Project and does not have any activity after it 4 3 2 15 A B C D E GF F is a Dummy activity It does not consume any resource It is introduce in Network to preserve logic Sept 2010Slide 34 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

35. Rules for drawing a Network Only 1 activity may connect any 2 Events Except for the Start and the End event, every event must have at least 1 activity entering it and at least 1 activity leaving it. Every activity must have a Tail event and a Head event. There must be no loops in the Network, i.e. no continuous path must go through one Event 2 times. Sept 2010Slide 35 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

36. Network Errors in drawing Network - Looping 12 3 How to determine Looping in a Network Head event must always have number higher than Tail event Sept 2010Slide 36 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

37. Network Errors in drawing Network - Dangling 1 4 23 Event 1 is Start of ProjectEvent 3 is end of Project Ways to avoid Dangling a) All Activities must start and finish with an Event b) Except for the Start and End Event, each event must have at least 1 activity entering and 1 activity leaving it. Sept 2010Slide 37 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

38. ACTIVITYPredecess or A- B- CB DB EA FA GF HC.E,G IF B C B D A E A F F G F I H C E G 1 3 2 4 5 6 A B C D E H F I G Sept 2010Slide 38 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

39. ACTIVIT Y Predeces sor Duration (Days) A-6 BA12 C-6 DC4 EA2 FD10 GD, E14 HB, F, G8 Sept 2010Slide 39 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit ST C A B E END D H F G

40. ACTIVIT Y Predeces sor Duration (Days) A-6 BA12 C-6 DC4 EA2 FD10 GD, E14 HB, F, G8 Sept 2010Slide 40 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit 0 0 1 E L 5 E L 6 E L 7 E L 3 E L 2 E L 4 C(6) A(6) B(12) D(4) F(10) G(14) H(8) E(2) D1(0) Earliest Event Time

41. ACTIVIT Y Predeces sor Duration (Days) A-6 BA12 C-6 DC4 EA2 FD10 GD, E14 HB, F, G8 Sept 2010Slide 41 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit 0 0 1 10 L 5 24 L 6 32 L 7 6 L 3 6 L 2 10 L 4 C(6) A(6) B(12) D(4) F(10) G(14) H(8) E(2) D1(0) Earliest Event Time 8, 1018, 24,20 Latest Event Time

42. ACTIVIT Y Predeces sor Duration (Days) A-6 BA12 C-6 DC4 EA2 FD10 GD, E14 HB, F, G8 Sept 2010Slide 42 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit 0 0 1 10 5 24 6 32 7 6 6 3 6 8 2 10 4 C(6) A(6) B(12) D(4) F(10) G(14) H(8) E(2) D1(0) Earliest Event Time 8, 1018, 24,20 Latest Event Time 14, 10 0, 2

43. ACTIVIT Y Predeces sor Duration (Days) A-6 BA12 C-6 DC4 EA2 FD10 GD, E14 HB, F, G8 Sept 2010Slide 43 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit 0 0 1 10 5 24 6 32 7 6 6 3 6 8 2 10 4 C(6) A(6) B(12) D(4) F(10) G(14) H(8) E(2) D1(0) 8, 1018, 24,20 14, 10 0, 2 Activity I,jNormal Time Earliest TimeLatest TimeTotal Float or Slack available StartFinishStartFinish A606282 B1261812246 C606060 D46106 0 D1010 0 E2688 2 F 2014244 G14102410240 H8 3224320

44. A Project consists of a series of activities labeled A, B, C, D, E, F, G, H, and I. The interdependency of activities is as follows A<D,E; B,D<F; C<G; B<H; F,G<I and G<H. A D E B D F C G B H G F I G H Sept 2010Slide 44 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit 1 3 4 7 2 8 A E D B F I C G H D1 D2 6 9 5 D3 D4

45. Earliest Event TimeLatest Event Time 0 0 1 E L 4 E L 6 E L 7 E L 3 E L 2 E L 5 A(23) B(8) C(20) G(19) H(4) D(16) E(24) F(18) I(10) D1 D2 Sept 2010Slide 45 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

46. 0 0 1 E L 4 E L 6 E L 7 E L 3 E L 2 E L 5 A(23) B(8) C(20) G(19) H(4) D(16) E(24) F(18) I(10) D1 D2 Determination of Earliest Event Time of Event Start from the 1 st Event i.e. Start of the Project. The Earliest Event time for it = 0 Consider the next event 2. Consider all activities terminating at that event i.e. C. C starts at event 1 and requires 20 days. For event 2 occur activity C has to be completed. Hence event 2 can occur only after the time event 1 has occurred and after C is completed i.e after 0 + 20 days = 20 days Similarly event 3 will occur after event 1 has occurred and activity A is completed i.e. after 0 +23 days = 23 days For event 4 to occur we need to complete activities B and D. The earliest that event 4 can occur is after the completion of activity B and D. i.e. Maximum of (0 + 8), (23 + 16) = 39 days Sept 2010Slide 46 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

47. Hence earliest completion of Project time is 67 days 0 0 1 39 L 4 57 L 6 67 L 7 23 L 3 20 L 2 39 L 5 A(23) B(8) C(20) G(19) H(4) D(16) E(24) F(18) I(10) D1 D2 8,39 20 23 39, 57 43, 67, 47 39, 39 Sept 2010Slide 47 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

48. 0 0 1 39 L 4 57 L 6 67 L 7 23 L 3 20 L 2 39 L 5 A(23) B(8) C(20) G(19) H(4) D(16) E(24) F(18) I(10) D1 D2 Determination of Latest Event Time of Event Start from the last Event i.e. End of the Project. The Latest Event time for it = Project completion time = 67 days Consider the next earlier event 6. Consider all activities starting from that event i.e. I. I requires 10 days. Latest time that event 6 can occur With out delaying the Project completion time is 67 – 10 = 57 days Similarly Latest Time for event 5 = Minimum of (57 – 0) or 67 – 4 = 57 days. For event 4 Latest time is Minimum of (57 – 0) or (57 – 18) = 39 days For event 3 the latest event time = Minimum of (39 – 16) or (67 – 24) = 23 days For event 2 the latest event time = 57 -19 = 38 days For event 1 Latest time is Minimum of (38 – 20), (39 – 8), (23 – 23) = 0 Sept 2010Slide 48 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

49. 0 0 1 39 4 57 6 67 7 23 3 20 38 2 39 57 5 A(23) B(8) C(20) G(19) H(4) D(16) E(24) F(18) I(10) D1 D2 57, 63 57 39, 57 23, 43 38 0, 31, 18 Sept 2010Slide 49 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

50. 0 0 1 39 4 57 6 67 7 23 3 20 38 2 39 57 5 A(23) B(8) C(20) G(19) H(4) D(16) E(24) F(18) I(10) D1 D2 Activity I,jNormal Time Earliest TimeLatest TimeTotal Float or Slack available StartFinishStartFinish C (1-2)200 183818 A (1-3)230 0 0 B (1-4)808313931 G (2-5)192039385718 D (3-4)16233923390 E (3-7)242347436720 D1 (4-5)039 57 18 F (4-6)18395739570 D2 (5-6)039 57 18 H (5-7)43943636724 I (6-7)10576757670 Activities that have Total float = 0 or No Slack available are the activities on the critical path. Hence Critical path is A-D-F-I Sept 2010Slide 50 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

51. Free Float, Interference Float, Independent Float 1 0 0 2 7 13 4 8 15 6 17 18 7 28 3 8 8 5 12 A (7) B (6) C (8) D E (3)I (10) F (5) K (3) G (4) H (5) J (16) Activity I: Total Float = 28 – 17 - 10 = 1 day Activity F: Total Float = 18-7-5 =6 days If F absorbs all its float then I has no float, but if F absorbs only 5 days of its float then I still has its 1 day float The float in an activity which can be used with out affecting float of any succeeding activity is called as Free Float Interference Float = Difference between Total float and Free float Consider activity K: If the tail event of this K activity is reached as late as possible and the Head event of the activity starts as early as possible then the float for K is 17-8-3 = 6 days. This float of 6 days whose absorption does not affect neither preceding activity nor the subsequent activity is called Independent Float Total Float = Free float + Interference Float Total Float = L j – E i – t, Free Float = E j – E i – t,. Interference Float = L j – E j,, Independent Float = E j – L i - t Sept 2010Slide 51 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

52. UPDATING PROJECT Can be done in 2 ways –Use the revised time estimate of incomplete activities and calculate from initial event the earliest completion time and the latest completion time of each event in the usual manner to know the Project completion time. –Change the complete work to zero duration and represent all the activities already finished by an arrow called the Elapsed time arrow. Events in the revised network are renumbered. Sept 2010Slide 52 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

53. The network for a project is shown below. A review of the project after 15 days reveals that –Activities 1-2, 1-3, 2-3, 2-4 and 3-4 are completed. –Activities 3-5 and 4-6 are in progress and need 2 and 4 days more resp. –The revised estimate shows that activity 8-9 will take only 8 days but activity 7-9 will need 10 days. Draw the new network after updating the Project and determine the Critical path. Sept 2010Slide 53 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit 1 0 0 2 3 3 3 7 7 4 13 5 14 15 6 16 7 19 26 8 24 9 34 2 3 4 6 7 7 5 9 3 12 8 10 8 Network at the start of the Project

54. Sept 2010Slide 54 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit 1 0 0 2 3 3 3 7 7 4 13 5 14 15 6 16 7 19 26 8 24 9 34 2 3 4 6 7 7 5 9 3 12 8 10 8 Network at the start of the Project 1 0 0 2 3 3 3 7 7 4 13 15 17 18 16 19 17 22 25 18 27 19 35 2 3 4 6 7 2 5 9 4 12 8 8 10 Updated Network after day 15 of the Project 14 15 13 15 (Finished 4-6) 2 (Finished 3-5) 8 Review at the end of 15 th day ActivityTime reqd. (Days) Activity Status 1-20completed 1-30completed 2-30completed 2-40completed 3-40completed 3-5(13-15)2In Progress 4-6(14-16)4In Progress 5-7(15-17)5Not started 5-8(15-18)9Not started 6-8(16-18)8Not started 6-9(16-19)12Not started 7-9(17-19)10Not started 8-9(18-19)8Not started New critical path 1-2-3-4-14-16-18-19 Project duration increased by 1 day to 35 days

55. Review at the end of 15 th day ActivityTime reqd. (Days) Activity Status 1-20completed 1-30completed 2-30completed 2-40completed 3-40completed 3-5(10-15)2In Progress 4-6(10-16)4In Progress 5-7(15-17)5Not started 5-8(15-18)9Not started 6-8(16-18)8Not started 6-9(16-19)12Not started 7-9(17-19)10Not started 8-9(18-19)8Not started New critical path 1-10-16-18-19 Project duration increased by 1 day to 35 days Sept 2010Slide 55 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit 2 nd Method 1 0 0 2 3 3 3 7 7 4 13 5 14 15 6 16 7 19 26 8 24 9 34 2 3 4 6 7 7 5 9 3 12 8 10 8 Network at the start of the Project 1 0 0 10 15 16 19 15 17 18 17 22 25 18 27 19 35 15 4 12 8 9 2 5 10 8 Updated Network after day 15 of the Project

56. Probability Assessment in PERT Network 3 time estimates are used for every activity Most optimistic time (t o ): it is the duration of the activity when everything goes well. It is assumed that such performance can be improved only in about 1% of the cases Most likely time (t m ): Normal time the activity would take. It is the time that would occur most often if the activity was to be repeated several times under the same conditions. Most Pessimistic time (t p ): It is the longest duration expected under the assumption that every thing goes wrong. There is only 1 % chance that the activity will extend beyond this value. Expected Time (t e ) is given by (t o + 4 t m + t p )/6 Standard Deviation ( σ ) is given by (t p - t o )/6 Variance is given by ( σ ) 2 Sept 2010Slide 56 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

57. Probability Assessment in PERT Network The range specified by optimistic time and pessimistic time is assumed to enclose every possible estimate of the duration of the activity. The most likely time estimate may not coincide with the midpoint (t o + t p )/2. Hence it is justified to assume that the duration of each activity follows Beta (β) distribution with its unimodal point occurring at t m and its end points at t o & t p Sept 2010Slide 57 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

58. Probability Assessment in PERT Network In a PERT Network the critical path comprises of 6 activities whose estimated duration in days is given below If the Project is scheduled for completion with in 42 days, what is the probability of achieving the schedule ActivityOptimistic TimeMost likely TimePessimistic Time 13612 28910 368 4258 53912 6345 Sept 2010Slide 58 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

59. ActivityOptimistic TimeMost likely TimePessimistic Time 13612 28910 368 4258 53912 6345 ActivityTime EstimateExpected Time T Std. Dev. σVariance (σ) 2 t1t1 t2t2 t3t3 136126.51.52.25 289109.00.330.11 368108.00.670.45 42585.01.00 539128.51.52.25 63454.00.330.11 T E = 416.17 Expected Time for completion of Project, T E = 41 days Variance of Project Time = 6.17 Hence σ for project = √6.17 = 2.48 days Scheduled time of the Project T S = 42 days Standard normal variate = Z = (T S – T E )/σ = (42 -41)/2.48 = 0.4 From table for area under the normal curve for value Z = 0.4 The area = 0.5 + 0.1544 = 0.6554 Hence the probability of completing the project by schedule time is 65.54% Sept 2010Slide 59 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

60. Example The following table gives the data for the activities of a small Project. Draw the Network and determine the Expected completion of the Project. What is the probability that the Project would take 5 more days for completion from the Expected completion time. Find the Project completion time that will have 95% probability of success (2010, MU) ActivityOptimistic TimeMost likely TimePessimistic Time 1 - 2147 1 - 351017 2 - 4333 2 - 6147 3 - 481526 3 - 5248 4 - 5555 5 - 6258 Sept 2010Slide 60 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

61. Sept 2010 Project Management Using Network Analysis, By Prof. Nadpurohit Slide 61 of 64

62. PERTCPM The result of analysis are expressed in terms of events. PERT is hence said to be Event oriented The results of calculations are considered in terms of activities of the Project. CPM is activity oriented The duration of activity is computed from multiple time estimates. This is done to take into account time uncertainties. These estimates are used to arrive at the probable achievement of any given scheduled date of Project completion. CPM uses only single time estimates and hence does not consider time uncertainties Does not usually consider costsAttempts to bring out relationship between Project duration and cost on the premise that it would be possible to manipulate project duration with in certain limits by incurring certain costs. Thus a shorter duration means deployment of additional resources and hence incidence of additional costs. Sept 2010Slide 62 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

63. Time-Cost Trade-Off Project costs –Direct costs Those expenses that can be directly charged to each and every activity of the Project. E.g. Manpower costs, material consumed, equipment cost, etc. –Indirect costs These are related to overall Project duration. E.g. service and administration costs. Any reduction in the Project duration leads to reduction of these costs. Sept 2010Slide 63 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

64. Normal duration of an activity –That duration of the activity for which the cost is minimum Normal cost of the activity –The minimum cost of the activity at its normal duration Time-Cost Trade-Off Sept 2010Slide 64 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

65. Cost Slope –Cost Slope for an activity = (Crash cost – Normal cost) / (Normal time – Crash time) Time-Cost Trade-Off Minimum Project Time Optimum Project Cost Project Total Cost Project Duration Project Total Cost Curve Project Indirect Cost Curve Project Direct Cost Curve Total Project Cost Time Relationship Sept 2010Slide 65 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

66. Optimal Project Duration –Is the one which results in minimum overall cost of the Project. –To determine this optimal duration we should know Normal duration of each activity Normal cost of each activity Cost of crashing the activity and hence the Cost slope of the activity Extend to which the activity can be crashed and Indirect cost of Project per unit time of Project duration Time-Cost Trade-Off Sept 2010Slide 66 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

67. Example for determination of Optimal Project duration and Minimum Project cost The following table shows details of a Project.The indirect cost is Rs. 400/- per day of Project duration. Determine the optimum Project Duration and minimum Project cost Activi ty Imme diate Pred eces sor Norm al Time (Wee ks) Cras h Time (Wee ks) Norm al Cost (Rs.’ 000) Cras h Cost (Rs.’ 000) Cost Slop e (Rs.’ 000) A-10720303.33 B-8615202.5 CB548146 DB6411152 EB859 2 FE54583 GA, D, C 128340.25 Sept 2010Slide 67 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit 1 0 0 2 8 8 3 13 14 4 A(10) 5 16 21 6 26 B(8) C(5) D(6) D1(0) E(8) F(5) G(12) 10, 13, 14 26, 21 14 21 16 14 13 8 9, 8, 13 4, 0

68. The following table shows details of a Project.The indirect cost is Rs. 400/- per day of Project duration. Activi ty Imme diate Pred eces sor Norm al Time (Wee ks) Cras h Time (Wee ks) Norm al Cost (Rs.’ 000) Cras h Cost (Rs.’ 000) Cost Slop e (Rs.’ 000) A-10720303.33 B-8615202.5 CB548146 DB6411152 EB859 2 FE54583 GA, D, C 128340.25 Sept 2010Slide 68 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit 1 0 0 2 8 8 3 13 14 4 A(10) 5 16 21 6 26 B(8) C(5) D(6) D1(0) E(8) F(5) G(12)10, 13, 14 26, 21 14 21 16 14 13 8 9, 8, 13 4, 0 Normal Project Time = 26 days Normal direct cost = Rs. 71,000/- Indirect cost = 400*26 = 10,400 Total Project cost = Normal direct cost + Indirect cost = 71,000 + 10,400 = Rs. 81,400/- Critical path B-D-G (1-2, 2-4, 4-6) Crashing critical activity with minimum cost slope i.e. activity G by 4 days, we get 1 0 0 2 8 8 3 13 14 4 5 16 21 6 22 G(8) F(5) E(8) D(6) A(10) B(8) C(5) D1(0)

69. The following table shows details of a Project.The indirect cost is Rs. 400/- per day of Project duration. Activi ty Imme diate Pred eces sor Norm al Time (Wee ks) Cras h Time (Wee ks) Norm al Cost (Rs.’ 000) Cras h Cost (Rs.’ 000) Cost Slop e (Rs.’ 000) A-10720303.33 B-8615202.5 CB548146 DB6411152 EB859 2 FE54583 GA, D, C 128340.25 Sept 2010Slide 69 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit Project Time = 22 days Direct cost = Rs. 71,000/- + 4*250 = 72,000/- Indirect cost = 400*22 = 8,800 Total Project cost = Direct cost + Indirect cost = 72,000 + 8,800 = Rs. 80,800/- Critical path B-D-G (1-2, 2-4, 4-6) Critical activity G has reached its crash limit and hence cannot be crashed further Crashing other critical activity with minimum cost slope i.e. activity D by 1 day, we get 1 0 0 2 8 8 3 13 14 4 5 16 21 6 22 G(8) F(5) E(8) D(6) A(10) B(8) C(5) D1(0) 0 0 1 13 3 8 8 2 4 16 5 21 6 A(10) B(8) C(5) D1(0) G(8) D(5) E(8) F(5)

70. The following table shows details of a Project.The indirect cost is Rs. 400/- per day of Project duration. Activi ty Imme diate Pred eces sor Norm al Time (Wee ks) Cras h Time (Wee ks) Norm al Cost (Rs.’ 000) Cras h Cost (Rs.’ 000) Cost Slop e (Rs.’ 000) A-10720303.33 B-8615202.5 CB548146 DB6411152 EB859 2 FE54583 GA, D, C 128340.25 Sept 2010Slide 70 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit Project Time = 21 days Direct cost = Rs. 72,000/- + 2000/- = 74,000/- Indirect cost = 400*21 = 8,400 Total Project cost = Direct cost + Indirect cost = 74,000 + 8,400 = Rs. 82,400/- This Total Project cost (Rs. 82,400/- ) is > the Total Project cost for 22 days viz. Rs. 80,800/- Hence Optimal Project Duration is 22 days and Minimum Total Project cost is Rs. 80,800/- 0 0 1 13 3 8 8 2 4 16 5 21 6 A(10) B(8) C(5) D1(0) G(8) D(5) E(8) F(5)

71. Example for determination of Optimal Project duration and Minimum Project cost The network given below gives the normal activity durations and the table given below gives the data on the various costs and crash times. The indirect cost is Rs. 120/- per day of Project duration. Determine the optimum Project Duration and minimum Project cost 1 0 0 2 5 5 3 11 4 17 9 6 6 5 10 Activit y Norma l Time (days) Crash Time (Days) Norma l Cost (Rs.) Crash Cost (Rs.) Cost Slope (Rs.) 1-25417024070 1-39631055080 2-3648020060 2-410813023050 3-46411029090 Sept 2010Slide 71 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

72. 1 0 0 2 5 5 3 11 4 17 9 6 6 5 10 1 0 0 2 5 5 3 11 4 17 9 6 6 5 10 Normal Project Time = 17 days Normal direct cost = Rs. 800/- Total Project cost = Normal direct cost + Indirect cost / day x Duration of the Project = 800 + 120 x 17 = Rs. 2840 Critical path 1-2, 2-3, 3-4 Activity 1-3 and 2-4, each have a float of 2 days Crashing activity critical with minimum cost slope i.e. activity 2-3 we get Activit y Norma l Time (days) Crash Time (Days) Norma l Cost (Rs.) Crash Cost (Rs.) Cost Slope (Rs.) 1-25417024070 1-39631055080 2-3648020060 2-410813023050 3-46411029090 Critical Path 1 0 0 2 5 5 3 10 4 16 9 6 5 5 10 Sept 2010Slide 72 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

73. Activit y Norma l Time (days) Crash Time (Days) Norma l Cost (Rs.) Crash Cost (Rs.) Cost Slope (Rs.) 1-25417024070 1-39631055080 2-3648020060 2-410813023050 3-46411029090 1 0 0 2 5 5 3 10 4 16 9 6 5 5 10 Project Time = 16 days Direct cost = Rs. 800/- + 60 = Rs. 860 Total Project cost = Direct cost + Indirect cost / day x Duration of the Project = 860 + 120 x 16 = Rs. 2780 Critical path 1-2, 2-3, 3-4 Activity 1-3 and 2-4, each have a float of 1 days Crashing critical activity with minimum cost slope i.e. activity 2-3 we get 1 0 0 2 5 5 3 9 9 4 15 9 6 4 5 10 Sept 2010Slide 73 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

74. Activit y Norma l Time (days) Crash Time (Days) Norma l Cost (Rs.) Crash Cost (Rs.) Cost Slope (Rs.) 1-25417024070 1-39631055080 2-3648020060 2-410813023050 3-46411029090 1 0 0 2 5 5 3 9 9 4 15 9 6 4 5 10 Project Time = 15 days Direct cost = Rs. 860/- + 60 = Rs. 920 Total Project cost = Direct cost + Indirect cost / day x Duration of the Project = 920 + 120 x 15 = Rs. 2720 Critical path: All paths are critical viz. 1-2-3-4; 1-2-4 & 1-3-4 Now Activity 1-3 and 2-4, do not have any float Activity 2-3 has reached its crash duration and cannot be reduced further Crashing options a) Crash 1-2 & 1-3 at a crash cost of 70+80=Rs.150 b) Crash 2-4 & 3-4 at a crash cost of 50+90=Rs. 140 1 0 0 2 4 4 3 8 8 4 14 8 6 4 4 10 1 0 0 2 5 5 3 9 9 4 14 9 5 4 5 9 Sept 2010Slide 74 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

75. Activit y Norma l Time (days) Crash Time (Days) Norma l Cost (Rs.) Crash Cost (Rs.) Cost Slope (Rs.) 1-25417024070 1-39631055080 2-3648020060 2-410813023050 3-46411029090 Crashing options a) Crash 1-2 & 1-3 at a crash cost of 70+80=Rs.150 b) Crash 2-4 & 3-4 at a crash cost of 50+90=Rs. 140 1 0 0 2 4 4 3 8 8 4 14 8 6 4 4 10 1 0 0 2 5 5 3 9 9 4 14 9 5 4 5 9 a b Option B looks to be the most beneficial Project Time 14 days Direct cost = 920+140=1060 Indirect cost = 14x120=1680 Hence Total Project cost = 1680+1060=2740 Sept 2010Slide 75 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

76. Activit y Norma l Time (days) Crash Time (Days) Norma l Cost (Rs.) Crash Cost (Rs.) Cost Slope (Rs.) 1-25417024070 1-39631055080 2-3648020060 2-410813023050 3-46411029090 Crashing options a) Crash 1-2 & 1-3 at a crash cost of 70+80=Rs.150 b) Crash 2-4 & 3-4 at a crash cost of 50+90=Rs. 140 1 0 0 2 4 4 3 8 8 4 14 8 6 4 4 10 1 0 0 2 5 5 3 9 9 4 14 9 5 4 5 9 a b Option c) Activity 2-3 which was at crash time has been relaxed by 1 day to 5 days. By doing this it would be still at a time < its normal time. Activity 1-2 has been crashed by 1 day to 4 days while activity 2-4 has been relaxed to original 10 days The crash cost from the original network would be 70+60+90=Rs.220 Therefore the Direct cost for this option of 14 days Project Time = 800+220=1020. Indirect cost = 14x120=1680 Hence Total Project cost = 1680+1020=2700 Hence this c) option would be the best option c 1 0 0 2 4 4 3 9 9 4 14 9 5 5 4 10 Sept 2010Slide 76 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

77. Activit y Norma l Time (days) Crash Time (Days) Norma l Cost (Rs.) Crash Cost (Rs.) Cost Slope (Rs.) 1-25417024070 1-39631055080 2-3648020060 2-410813023050 3-46411029090 Project Time = 14 days, Total Project cost = Direct cost + Indirect cost / day x Duration of the Project = 1020 + 120 x 14 = Rs. 2700 All activities are critical Activity 1-2 is at its crash time & hence cannot be further crashed For a Project duration of 13 days the crashing options are a)Crash 2-4 and 3-4 at a crash cost of 50+90=140 b)Crash 1-3, 2-3 and 2-4 at a crash cost of 80+60+50=190 Choosing a option we get 1 0 0 2 4 4 3 9 9 4 14 9 5 5 4 10 d 1 0 0 2 4 4 3 9 9 4 13 9 4 5 4 9 Total Project Cost: = Direct costs + Indirect cost / day x Duration of the project = 1020+140 + 120x13 = Rs. 2720/- This total Project cost is > Rs. 2700/ Hence Optimal Project duration at a minimum Total cost of Rs. 2700/- is 14 days Sept 2010Slide 77 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

78. End of Chapter Sept 2010Slide 78 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

79. Planning is essential for successful accomplishment of any task The details and depth of planning is related to the complexity of the task to be achieved.

80. Major elements of planning Objective –Defining what is supposed to be achieved. Analysis –Gathering facts on what is required to reach the objective. Evaluation –Examining the time & effort involved in adapting various ways to reach the end objective. Risk appraisal –Determining the allowance to be made for uncertainty. Decision –Specifying the method for implementation Schedule –Establishing the time schedule for implementation of the segment of plan. Sept 2010Slide 80 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

81. Network Restraints and Ladders 12 34 56 78 A B C D E Activity 1-3, Waiting to receive 1 st lot for starting activity B Activity 2-4, Time taken to process last lot to complete activity B Sept 2010Slide 81 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

82. Conditional diagramming methods –Allow for non-sequential activities such as loops or conditional branches –Neither PDM nor ADM allows loops or conditional branches Network templates –Standardized networks can be used for entire project or portions (subnets or fragnets) of it Activity sequencing: tools & techniques Sept 2010Slide 82 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

83. Project network diagrams –Schematic displays of projects activities and logical relationships among them –May include full project details or have one or more summary activities (hammocks) –E.g. PERT Activity sequencing: outputs Sept 2010Slide 83 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

84. Project Planning & Scheduling (3 sessions) CPM & PERT Techniques WBS Network drawing Network Analysis Updating of Network Project Cost v/s Project Completion time (2 sessions) Time Cost Trade off Crashing of Project Completion time Resources allocation (1 session) Resource Smoothening and Resource Leveling Project Control (1 session) Earned Value Management Sept 2010Slide 84 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

85. Project: Characteristics & Types Project Identification & Formulation Project Management & Appraisal Project Cost Estimation & DPR Project Financing Project Appraisal Technical Financial & Market Sept 2010Slide 85 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit

86. Arrow diagramming method (ADM) : method of constructing project network diagram using arrows to represent activities and connecting them at nodes to show their dependencies –(called activity-on-arrow AOA) start finish A C D E F B G H What type of activity is this? Activity sequencing: tools and techniques Sept 2010Slide 86 of 64 Project Management Using Network Analysis, By Prof. Nadpurohit