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Project Management Using Network Analysis. By Prof. Nadpurohit. 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

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slide2

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide3

References:

    • PMBOK
    • Project Management by K Nagarajan, New age International Publications
    • Projects by Dr. Prasanna Chandra

Project Management Using Network Analysis, By Prof. Nadpurohit

slide4

“A Project”

Temporary endeavor undertaken to create a unique Product, Service or Result

Project Management Using Network Analysis, By Prof. Nadpurohit

slide5

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.

Project Management Using Network Analysis, By Prof. Nadpurohit

slide6

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.

Project Management Using Network Analysis, By Prof. Nadpurohit

slide7

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide8

Relation between Product and Project Life Cycle

Upgrade

Product

Life

Cycle

Business

Plan

Operations

Divestment

IDEA

Product

Project Life

Cycle

Initial

Intermediate

Final

Project Management Using Network Analysis, By Prof. Nadpurohit

slide9

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide10

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide11

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide12

Projects and Strategic Planning

Strategic considerations that lead to Project authorization

. Market demand

. Organizational need

. Customer request

. Technological advance

. Legal Requirement

Project Management Using Network Analysis, By Prof. Nadpurohit

slide13
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

Project Management Using Network Analysis, By Prof. Nadpurohit

program evaluation and review technique pert
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

slide15
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

critical path method cpm
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

gantt chart
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

Project Management Using Network Analysis, By Prof. Nadpurohit

gantt chart1
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

stages in application of pert cpm
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

Project Management Using Network Analysis, By Prof. Nadpurohit

stages in application of pert cpm1
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

stages in application of pert cpm2
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

concepts definitions
Concepts / Definitions
  • Project

Temporary endeavor undertaken to create a unique Product, Service or Result.

  • Workbreakdown 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.

Project Management Using Network Analysis, By Prof. Nadpurohit

concepts definitions1
Concepts / Definitions
  • Activity

Is a task or item of work to be done, that consumes time, effort, money or other resources.

Project Management Using Network Analysis, By Prof. Nadpurohit

concepts definitions2
Concepts / Definitions
  • Event
    • Events do not consume resources.
    • Events are represented by circle
    • An Event is realized only when all activities terminating at it are completed.

Project Management Using Network Analysis, By Prof. Nadpurohit

concepts definitions3
Concepts / Definitions
  • Network diagram
    • Shows how the tasks will flow from beginning to end

Project Management Using Network Analysis, By Prof. Nadpurohit

steps involved in drawing a network
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

activity sequencing tools and techniques
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)

Project Management Using Network Analysis, By Prof. Nadpurohit

activity sequencing tools and techniques1

A

C

finish

start

D

B

Activity sequencing: tools and techniques
  • 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

Project Management Using Network Analysis, By Prof. Nadpurohit

activity sequencing tools and techniques2
Activity sequencing: tools and techniques
  • PDM could have four types of dependencies
    • Finish-to-start
    • Finish-to-finish
    • Start-to-start
    • Start-to-finish

Project Management Using Network Analysis, By Prof. Nadpurohit

activity sequencing tools and techniques3
Activity sequencing: tools and techniques
  • 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

Project Management Using Network Analysis, By Prof. Nadpurohit

concepts definitions4

5

The number 5 over the arrow indicates the Time required for completion of the activity

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.

Project Management Using Network Analysis, By Prof. Nadpurohit

concepts definitions5

Tail

Event

1

Head

Event

2

A

Activity

5

Activity A or 1-2 requiring 5 units of time, Event 1 Event 2

Concepts / Definitions
  • 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.

Project Management Using Network Analysis, By Prof. Nadpurohit

concepts definitions6

2

D

A

E

B

1

4

5

C

F

G

3

Concepts / Definitions
  • Network
    • A network is a graphic representation of a Project’s operation and is composed of activities and events

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

F is a Dummy activity

It does not consume any resource

It is introduce in Network to preserve logic

Project Management Using Network Analysis, By Prof. Nadpurohit

rules for drawing a network
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

network errors in drawing network looping

1

2

3

NetworkErrors in drawing Network - Looping

How to determine Looping in a Network

Head event must always have number higher than Tail event

Project Management Using Network Analysis, By Prof. Nadpurohit

network errors in drawing network dangling

1

2

3

Event 1 is Start of Project

Event 3 is end of Project

4

NetworkErrors in drawing Network - Dangling

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.

Project Management Using Network Analysis, By Prof. Nadpurohit

slide38

C

D

E

F

G

I

B

B

A

A

F

F

G

H

E

C

F

4

G

2

A

I

E

H

1

5

6

C

B

D

3

Project Management Using Network Analysis, By Prof. Nadpurohit

slide39

G

H

H

D

C

B

G

A

E

G

B

F

I

F

D

  • 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.

2

E

A

D

5

F

1

9

B

D1

4

D2

H

7

I

C

G

8

D3

D4

3

6

Project Management Using Network Analysis, By Prof. Nadpurohit

slide40

G(19)

H(4)

D1

C(20)

D2

B(8)

F(18)

I(10)

E

0

E

E

E

E

E

A(23)

5

1

6

3

4

7

2

D(16)

L

0

L

L

L

L

L

E(24)

Earliest Event Time

Latest Event Time

Project Management Using Network Analysis, By Prof. Nadpurohit

slide41

G(19)

H(4)

D1

C(20)

D2

B(8)

F(18)

I(10)

E

E

0

E

E

E

E

A(23)

7

4

6

1

3

2

5

D(16)

L

L

L

L

L

0

L

E(24)

Determination of Earliest Event Time of Event

Start from the 1st 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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide42

20

39, 39

8,39

43, 67, 47

39, 57

G(19)

H(4)

D1

C(20)

D2

B(8)

F(18)

I(10)

23

67

39

0

23

57

39

20

A(23)

7

4

1

6

3

2

5

D(16)

L

L

L

L

L

L

0

E(24)

Hence earliest completion of Project time is 67 days

Project Management Using Network Analysis, By Prof. Nadpurohit

slide43

G(19)

H(4)

C(20)

D1

D2

B(8)

F(18)

I(10)

A(23)

D(16)

E(24)

67

39

0

20

23

39

57

4

7

1

6

2

3

5

L

L

0

L

L

L

L

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide44

57, 63

38

G(19)

H(4)

C(20)

39, 57

57

D1

0, 31, 18

D2

B(8)

F(18)

I(10)

23, 43

A(23)

D(16)

E(24)

67

39

0

57

23

39

20

4

7

5

6

1

2

3

39

67

0

38

57

23

57

Project Management Using Network Analysis, By Prof. Nadpurohit

slide45

G(19)

H(4)

C(20)

D1

D2

B(8)

F(18)

I(10)

A(23)

D(16)

E(24)

67

39

0

20

39

23

57

4

7

6

2

5

3

1

67

39

0

38

23

57

57

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

Project Management Using Network Analysis, By Prof. Nadpurohit

free float interference float independent float

F (5)

A (7)

B (6)

E (3)

I (10)

8

28

17

12

7

0

8

6

3

2

1

5

4

7

C (8)

8

13

15

0

28

12

18

K (3)

D

H (5)

J (16)

G (4)

Free Float, Interference Float, Independent Float

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 = Lj – Ei – t, Free Float = Ej – Ei – t,. Interference Float = Lj – Ej,, Independent Float = Ej – Li - t

Project Management Using Network Analysis, By Prof. Nadpurohit

updating project
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

slide48

3

7

12

3

8

10

6

4

9

2

3

0

13

7

16

14

24

34

19

7

8

5

3

2

9

1

7

4

6

8

16

3

15

26

7

34

13

0

24

5

  • 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.

Network at the start of the Project

Project Management Using Network Analysis, By Prof. Nadpurohit

slide49

3

7

12

3

8

10

6

4

9

2

35

16

27

3

13

22

15

0

14

19

7

19

17

13

24

7

34

3

0

15

7

8

4

3

9

6

2

1

5

8

14

7

16

2

3

17

13

18

1

15

19

4

19

16

0

34

3

24

26

13

18

7

15

25

15

7

0

27

13

3

35

15

5

Network at the start of the Project

Updated Network after day 15 of the Project

(Finished 4-6) 2

New critical path

1-2-3-4-14-16-18-19

Project duration increased by 1 day to 35 days

4

7

12

3

8

8

6

4

9

2

10

(Finished 3-5) 8

2

5

Project Management Using Network Analysis, By Prof. Nadpurohit

slide50

3

7

12

3

8

12

10

6

4

4

8

9

8

2

15

7

3

13

24

16

34

14

19

0

15

27

22

17

19

35

0

7

8

4

8

7

6

5

3

2

1

9

1

10

18

16

17

19

15

9

5

0

34

24

7

3

15

26

13

16

35

18

25

19

15

0

27

10

2

5

Network at the start of the Project

2nd Method

Updated Network after day 15 of the Project

New critical path

1-10-16-18-19

Project duration increased by 1 day to 35 days

Project Management Using Network Analysis, By Prof. Nadpurohit

probability assessment in pert network
Probability Assessment in PERT Network
  • 3 time estimates are used for every activity
  • Most optimistic time (to): 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 (tm): 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 (tp): 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 (te) is given by (to + 4 tm + tp)/6
  • Standard Deviation ( σ ) is given by (tp - to)/6
  • Variance is given by ( σ )2

Project Management Using Network Analysis, By Prof. Nadpurohit

probability assessment in pert network1
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 (to+ tp)/2.
  • Hence it is justified to assume that the duration of each activity follows Beta (β) distribution with its unimodal point occurring at tm and its end points at to & tp

Project Management Using Network Analysis, By Prof. Nadpurohit

probability assessment in pert network2
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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide54

Expected Time for completion of Project, TE = 41 days

Variance of Project Time = 6.17

Hence σ for project = √6.17 = 2.48 days

Scheduled time of the Project TS = 42 days

Standard normal variate = Z = (TS – TE)/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%

Project Management Using Network Analysis, By Prof. Nadpurohit

example
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)

Project Management Using Network Analysis, By Prof. Nadpurohit

time cost trade off
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

time cost trade off1
Time-Cost Trade-Off
  • 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

Project Management Using Network Analysis, By Prof. Nadpurohit

time cost trade off2

Total Project Cost Time Relationship

Project Total Cost Curve

Project Indirect Cost Curve

Project Total Cost

Optimum Project Cost

Project Direct Cost Curve

Minimum Project Time

Project Duration

Time-Cost Trade-Off
  • Cost Slope
    • Cost Slope for an activity =

(Crash cost – Normal cost) / (Normal time – Crash time)

Project Management Using Network Analysis, By Prof. Nadpurohit

time cost trade off3
Time-Cost Trade-Off
  • 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

Project Management Using Network Analysis, By Prof. Nadpurohit

example for determination of optimal project duration and minimum project cost

16

14

26

0

13

8

5

1

2

3

4

6

8

0

14

26

14

21

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

10, 13, 14

A(10)

13

26, 21

4, 0

D1(0)

G(12)

14

B(8)

D(6)

14

16

8

C(5)

F(5)

E(8)

9, 8, 13

21

Project Management Using Network Analysis, By Prof. Nadpurohit

slide63

22

0

8

0

13

16

14

16

26

8

13

14

2

3

1

4

4

5

5

6

3

1

2

6

14

26

8

21

8

14

22

21

0

14

14

0

10, 13, 14

A(10)

13

26, 21

4, 0

D1(0)

G(12)

14

B(8)

  • The following table shows details of a Project.The indirect cost is Rs. 400/- per day of Project duration.

D(6)

14

16

8

C(5)

F(5)

E(8)

9, 8, 13

21

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

A(10)

G(8)

D1(0)

B(8)

D(6)

C(5)

F(5)

E(8)

Project Management Using Network Analysis, By Prof. Nadpurohit

slide64

22

0

8

16

13

14

4

5

1

2

3

6

21

14

22

8

14

0

  • The following table shows details of a Project.The indirect cost is Rs. 400/- per day of Project duration.

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

A(10)

A(10)

G(8)

D1(0)

G(8)

D1(0)

B(8)

D(5)

21

13

13

16

0

8

B(8)

2

6

1

3

5

4

C(5)

D(6)

21

16

13

13

8

0

C(5)

F(5)

F(5)

E(8)

E(8)

Project Management Using Network Analysis, By Prof. Nadpurohit

slide65
The following table shows details of a Project.The indirect cost is Rs. 400/- per day of Project duration.

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/-

A(10)

G(8)

D1(0)

B(8)

D(5)

21

13

13

16

0

8

1

3

2

5

6

4

C(5)

21

16

13

13

8

0

F(5)

E(8)

Project Management Using Network Analysis, By Prof. Nadpurohit

example for determination of optimal project duration and minimum project cost1

6

9

11

17

0

5

2

1

4

3

11

0

17

5

6

5

10

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide67

6

6

6

9

9

9

17

0

5

16

11

10

11

5

0

0

17

5

3

4

3

2

2

1

1

4

1

2

3

4

11

17

0

17

5

0

10

5

16

0

5

11

6

5

6

5

5

5

10

10

10

Critical Path

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide68

6

6

9

9

16

0

0

5

10

9

15

5

2

3

2

4

4

1

1

3

0

0

10

5

15

9

5

16

4

5

5

5

10

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide69

5

6

6

9

8

9

4

0

0

5

9

14

15

14

8

0

5

9

1

2

2

4

4

3

1

1

3

2

4

3

9

15

5

0

4

0

8

0

14

9

5

14

4

4

4

4

5

5

10

9

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide70

6

5

9

8

9

5

14

14

0

4

8

0

1

2

3

2

4

3

4

1

0

14

4

14

5

9

8

0

4

4

4

5

9

10

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

a

b

Project Time 14 days

Direct cost = 920+140=1060

Indirect cost = 14x120=1680

Hence Total Project cost = 1680+1060=2740

Option B looks to be the most beneficial

Project Management Using Network Analysis, By Prof. Nadpurohit

slide71

5

6

9

8

4

8

0

14

9

0

14

0

4

9

14

5

3

2

4

4

1

1

1

3

3

2

4

2

0

14

14

4

5

8

9

14

4

0

0

9

4

4

4

5

9

10

5

9

5

4

10

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

a

b

c

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide72

0

0

13

4

4

9

9

14

3

1

2

3

1

4

4

2

0

9

0

4

13

4

14

9

d

5

4

9

9

5

5

4

4

10

9

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
  • Crash 2-4 and 3-4 at a crash cost of 50+90=140
  • Crash 1-3, 2-3 and 2-4 at a crash cost of 80+60+50=190
  • Choosing a option we get

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide73
End of Chapter

Project Management Using Network Analysis, By Prof. Nadpurohit

slide74

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.

major elements of planning
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.

Project Management Using Network Analysis, By Prof. Nadpurohit

network restraints and ladders

A

B

C

1

3

5

7

6

4

2

8

D

E

NetworkRestraints and Ladders

Activity 2-4, Time taken to process last lot to complete activity B

Activity 1-3, Waiting to receive 1st lot for starting activity B

Project Management Using Network Analysis, By Prof. Nadpurohit

activity sequencing tools techniques
Activity sequencing: tools & techniques
  • 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

Project Management Using Network Analysis, By Prof. Nadpurohit

activity sequencing outputs
Activity sequencing: outputs
  • 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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide79

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

Project Management Using Network Analysis, By Prof. Nadpurohit

slide80

Project: Characteristics & Types

  • Project Identification & Formulation
  • Project Management & Appraisal
    • Project Cost Estimation & DPR
    • Project Financing
    • Project Appraisal
      • Technical
      • Financial &
      • Market

Project Management Using Network Analysis, By Prof. Nadpurohit

activity sequencing tools and techniques4

What type of activity

is this?

C

B

H

A

G

finish

start

D

F

E

Activity sequencing: tools and techniques
  • 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)

Project Management Using Network Analysis, By Prof. Nadpurohit