Network Models/Analysis: Project Management

Project
A project is a temporary endeavor involving a connected sequence of
activities and a range of resources, which is designed to achieve a specific
and unique outcome and which operates within time, cost and quality
constraints and which is often used to introduce change.

Characteristic of a project

A unique, one-time operational activity or effort

Requires the completion of a large number of interrelated activities
Established to achieve specific objective
Resources, such as time and/or money, are limited
Typically has its own management structure
Need leadership
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Examples

• Writing a term paper

• constructing houses, factories, shopping malls, athletic stadiums
• developing military weapons systems, aircrafts, new ships
• launching satellite systems
• constructing oil pipelines
• developing and implementing new computer systems
• planning concert, football games, or basketball tournaments
• introducing new products into market

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What is project management/network analysis
• The application of a collection of tools and techniques to direct the use of
diverse resources towards the accomplishment of a unique, complex, one
time task within time, cost and quality constraints.
• One of these techniques is the use of networks to represent a system of
related activities
• Network analysis is a method of planning, scheduling, coordinating, and
controlling projects that consists activities performed by various departments,
institutions, and individuals... so that objective is optimized.
• Network analysis clearly shows the interdependencies between jobs or
activities to be performed, the sequence of doing them b/c some activities
may not be started before the completion of others, the duration of each
activity etc..
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 Project Scheduling and Control Techniques
There are three interrelated techniques that can be used for planning,
scheduling, controlling and sequencing activities.
✓ Gantt chart
✓ PERT (Performance Evaluation and Review Technique) - Network
diagram
✓ CPM (Critical Path Method)- Network diagram
These are precedence diagram or graphical tools for scheduling activities
in a project plan.
❑ The network diagrams use boxes/rectangles or circles, referred to as
nodes to represent activities/ events and connects them by
arrows to show the logical relationships that exist between them.
❑ This technique is also called Activity on Arrow (AOR) or Activity on
Node (AON)
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Developing the Project Plan
Done using Graphs/ Bar and Network diagrams
Bar Charts - Gantt chart
• Provides visual display of project schedule
• Bars represent the time for each task
• Bars also indicate status of tasks
• It defines the start and finish time
• It defines critical activities

• Slack
• amount of time an activity can be delayed without delaying the project

Tsegabrhan Mekonen (PhD) 6

 General structure of a bar/Gantt Chart
Graph or bar chart with a bar for each project activity that shows passage of time
Provides visual display of project schedule

7
 Example: Illustration One

Activity Description Duration ( time Immediate

( No. or in Months) predecessor
Code)
1 or (A)Design house and obtain 3 None
financing
2 or (B) Lay foundation 2 A
3 or (C) Order and receive 1 A
materials
4 or (D) Build house 3 B
5 or (E) Select paint 1 B
6 or (F) Select carpet 1 E
7 or (G) Finish work 1 D
Tsegabrhan Mekonen (PhD) 8
Example of Gantt Chart for building a house
Month
0 | 2 | 4 | 6 | 8 | 10
Activity
Design house
and obtain
financing
Lay foundation
Order and
receive
materials
Build house

Select paint

Select carpet

Finish work

1 3 5 7 9
Tsegabrhan Mekonen (PhD)
Month 9
 Developing the Project Plan
• The Project Network for project analysis
• A flow chart that graphically depicts activity sequences, interdependencies, and
start and finish times of the project with the critical path through the network.

• The first thing in network analysis is to develop/list out activities of a project then
• Establish relationships
• Estimate completion time for each activity
• Deterministic or probabilistic time estimates
• ……..
• Networks show how projects are organized and are used to determine time
duration for completion
• Provides the basis for scheduling labor and equipment.
• Enhances communication among project participants.
• Provides an estimate of the project’s duration.
• Provides a basis for budgeting cash flow.
• Identifies activities that are critical and can not be delayed.
• Help managers get and stay on plan.
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Developing the Project Plan
• Network Diagram

C
A 2
F
1 B E 5
3 7
D
H
G 6
4

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The Project Network and activity time estimates
The two widely used network diagrams are:
• Critical Path Method (CPM)
• Deterministic task times
• Activity-on-node network construction
• Project Evaluation and Review Technique (PERT)
• Probabilistic task time estimates
• Activity-on-arrow network construction

Tsegabrhan Mekonen (PhD) 12

 Comparison between CPM and PERT
CPM PERT
1 Uses network, calculate float or slack,
identify critical path and activities, Same as CPM
guides to monitor and controlling
project
2 Uses one value of activity time Requires 3 estimates of activity time
Calculates mean and variance of time

3 Used where times can be estimated Used where times cannot be

with confidence, familiar activities estimated with confidence.
Unfamiliar or new activities
4 Used for example for construction Used for example for projects
projects, building machines, ships, etc involving new activities or products,
research and development etc
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 Constructing a Project Network- AON
• Terminology
• Activity: an element/ a task / a certain amount of work
of the project that requires time.
• Burst Activity: an activity that has more than one
activity immediately following it (more than one
dependency arrow flowing from it). B is a burst activity
A
or preceding activity
• Merge Activity: an activity that has two or more D
preceding activities on which it depends. D is a merger B

activity or succeeding activity

• Parallel (Concurrent) Activities: Activities that can C
occur independently and, if desired, not at the same
time. Activities A and B are concurrent activities

Tsegabrhan Mekonen (PhD) 14

Constructing a Project Network (cont’d)
• Terminology
• Event: completion or beginning of an activity in a project. It does not
consume time
• Path: a sequence of connected, dependent activities.
• Critical path: the longest path through the activity network that represents
project completion time; It is the shortest expected time in which the entire
project can be completed. Delays on the critical path will delay completion
of the entire project.
• Slack is the amount of time an activity can be delayed without delaying
the project
C
E

A B
D

Tsegabrhan Mekonen (PhD) 15

Dummy Activity – A fictitious activity in a network diagram used to show
precedence relationship between activities. It requires no time any
resource.
• two or more activities cannot share same start and end nodes

2
Lay foundation
Lay
foundation Dummy

2 0
1 2
1
Order material 1 3
Order material

(a) Incorrect precedence (b) Correct precedence

relationship relationship

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 EXAMPLES OF THE USE OF DUMMYACTIVITY

Activity c not required for e

a e
a d
3
b 2 e 1 b
1
c d
c 2
WRONG!!!
RIGHT ✓

Tsegabrhan Mekonen (PhD) 17

a precedes d.
a and b precede e,
b and c precede f (a does not precede f)

WRONG!!! RIGHT!!!
a d a d
1 2

b 2 e b 3
1 5 e

c 3 f c 4 f

Tsegabrhan Mekonen (PhD) 18

 Exercise: Identify the Situations in network diagram
B
A
A must finish before either B or C can start

C
A
C both A and B must finish before C can start
B

A
C both A and B must finish before either of C or D can start
B
D

A
B
A must finish before B can start
Dummy both A and C must finish before D can start

C
D 19
Constructing a Project Network (cont’d)
• Two Approaches
• Activity-on-Node (AON)
• Uses a node to depict an activity.
• arrows show precedence relationships
• Activity-on-Arrow (AOA)
• Uses an arrow to depict an activity.
• nodes are events for points in time

E
B A 2
F
A 1 C G 5
3 7
C D
I
H 6
D 4

Node Node
Tsegabrhan Mekonen (PhD) 20
Basic Rules to Follow in Developing Project Networks

1. Networks typically flow from left to right.

2. An activity cannot begin until all preceding connected activities are
completed.
3. Arrows indicate precedence and flow and can cross over each other.
4. Each activity must have a unique identity number that is greater than any
of its predecessor activities.
5. Looping is not allowed.
6. Use common start and stop nodes.

Tsegabrhan Mekonen (PhD) 21

 Example: Illustration One

Activity Description Duration ( time Immediate

( No. or in Months) predecessor
Code)
1 or (A)Design house and obtain 3 None
financing
2 or (B) Lay foundation 2 A
3 or (C) Order and receive 1 A
materials
4 or (D) Build house 3 B
5 or (E) Select paint 1 B
6 or (F) Select carpet 1 E
7 or (G) Finish work 1 D
Tsegabrhan Mekonen (PhD) 22
AOA Project Network for House
3
Lay foundation Dummy

2 0 Build Finish
3 1 house work
1 2 4 6 7
Design house and Order and 3 1
obtain financing receive Select 1 1 Select carpet
materials paint
5

AON Project Network for House

Lay foundations Build house
2 4
Finish work
2 3
7
Start 1 1
3
Design house and 6
3
obtain financing 5 1
1
1 Select carpet
Order and receive
Select paint 23
materials
Exercise: Illustration Two
Prepare activity on arrow network diagram for a project having the following
information
Activity Estimated Immediate
( No. or activity time predecessor
Code) (WKs)
A 3 None
B 5 None
C 4 None
D 2 A
E 3 B
F 9 C
G 8 D,E
H 7 B
I 9 H,F
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Total 50
Tsegabrhan Mekonen (PhD)
 2 D
A
3 2
1 5 G
B 8
5 E
3 3 7
H
4 C 7 I
9
6
F
4
9

Tsegabrhan Mekonen (PhD) 25

Exercise: Illustration Three
Draw activity on arrow network diagram for the following activities
Activity Immediate
(Code) predecessor

D
A None B 4 5 F
1 A
B A 2 H 8
C 7
E G
C A 3 6
D B,C
E C
F D
G E
H F,G
Tsegabrhan Mekonen (PhD) 26
Exercise: Illustration Four
Draw activity on arrow network diagram for the following activities
Activity Immediate
(Code) predecessor D G 7
2 5
A
A --- E
1
B --- B
C F 6
4
C B 3
D A,C
E C
F C
G D,E,F

Tsegabrhan Mekonen (PhD) 27

 2 D
A
3 2
1 5 G
B 8
5 E
3 3 7
H
4 C 7 I
9
6
F
4
9

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Critical Path Method (CPM) Analysis
• A graphical technique for planning and scheduling projects that indicate
the critical path with its project duration.
• Draw the CPM network
• Identify and analyze the various paths through the network to determine
the longest path taking maximum time
• Determine the float for each activity
• Compute the activity’s float/slack
float = LS - ES = LF - EF
• Float is the maximum amount of time that an activity can be delayed in
its completion before it becomes a critical activity.
• Find the critical path that is the sequence of activities and events where
there is no “slack” i.e.. Zero slack
• Longest path through a network
• Find the project duration which is the minimum project completion time

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Example – AOA: Determine the critical path and project duration
Activity Description Duration ( time Immediate
( No. or in Months) predecessor
Code)
1 or (A) Design house and obtain 3 None
financing

2 or (B) Site Clearing and preparation 1 A

3 (C) Order and receive materials 1 B
4 (D) Lay foundation 2 B
5 (E) Build house 3 C, D
6 (F) Select paint 1 C,D
7 (G) Select carpet 1 F
8 (H) Finish work 1 E, G
Tsegabrhan Mekonen (PhD) 30
 AOA Project Network for building a House

4
Lay foundation Dummy
(D) 2 0
(E) (H) End
Start Build Finish
3 1 1 house work
1 2 3 5 7 8
3 1
(A or 1) (B or 2) (C)
Design Site Order and (F) 1 1
house and clearing receive Select (G)
obtain and materials paint Select
6 carpet
financing preparation

Path 1: 1-2-3-4-5-7-8 or A-B-D-E-H 3 +1+ 2 + 3 + 1 = 10 months

Path 2: 1-2-3-5-6-7-8 or A-B-D-F-G-H 3 +1+ 2 + 1 + 1 + 1= 9 months
Path 3: 1-2-3-5-7-8 or A-B-C-E-H 3 +1+1 + 3 + 1 = 9 months
Path 4: 1-2-3-5-6-7-8 or A-B-C-F-G-H 3 +1+1 + 1 + 1 + 1 = 8 months
 Path 1: A-B-D-E-H is the Critical path, Longest path through the network
Tsegabrhan Mekonen (PhD) 31
AOA Project Network for building a House

Activity Start node End node Activity time

A 1 2 3
B 2 3 1
C 3 4 1
Dummy 4 5 0
D 3 5 2
E 5 7 3
F 5 6 1
G 6 7 1
H 7 8 1

Tsegabrhan Mekonen (PhD) 32

AON Network for House Building Project

Lay Build
foundation house
Activity Number
3 5
Design house Activity Time
and obtain 2 3
financing
A/1 B/2 8
Start
3 1 1
Site
clearing Finish work
and 4 6 7
preparation 1 1
1
Order &receive Select Select
materials paint carpet

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Tsegabrhan Mekonen (PhD) 34
 Critical Path Method
3 5
2 3

1 2 8
Start
3 3 1

4 6 7
1 1 1

Path 1: 1-2-3-5-8
 Critical path
3 +1+ 2 + 3 + 1 = 10 months
◼ Longest path through a
Path 2: 1-2-3-6-7-8
network
3 +1+ 2 + 1 + 1 + 1= 9 months
◼ Minimum project
Path 3: 1-2-4-5-8
completion time
3 +1+1 + 3 + 1 = 9 months
Path 4: 1-2-4-6-7-8
3 +1+1 + 1 + 1 + 1 = 8 months Tsegabrhan Mekonen (PhD)
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Activity Scheduling: Identifying the critical path by the Forward and
backward pass process
Forward pass process
• Starts at beginning of CPM/PERT network to determine earliest
activity times by working forward
• Earliest start time (ES)
• earliest time an activity can start
• ES = maximum EF of immediate predecessors
• Earliest finish time (EF)
• earliest time an activity can finish
• earliest start time plus activity time
• EF= ES + t
• Rule for the ES for activities with more than one predecessors is the
larger of the EF of its immediate predecessors. i.e., ES = Maximum (EFi)
of predecessors

Tsegabrhan Mekonen (PhD) 36

 Activity Scheduling
Backward pass process
• Determines latest activity times by starting at the end of CPM/PERT
network and working backward
• Latest start time (LS)
• Latest time an activity can start without delaying critical path time
• LS= LF - t
• Latest finish time (LF)
• latest time an activity can be completed without delaying critical path
time
• Rule for the LF for activities with more than one successors is the
minimum of LS of immediate successors
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Node Configuration

Activity Earliest Earliest

number start finish

1 0 3

3 0 3

Activity Latest Latest

duration start finish

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Activity Start Times
Start at 4 Start at 6 months
months3 5
2 3
Finish at 10
months
2 8
Start 1
Finish
3 1 1

4 6 7
1 1 1

Start at 6
Start at 4 months Start at 7
months months

Tsegabrhan Mekonen (PhD) 39

Activity Finish Times
Finish at 6 Finish at 9 months
months
3 5
2 3
Finish at 10
months
2 8
Start 1
Finish
3 1 1

4 6 7
1 1 1

Finish at 7 Finish at 8
Finish at 5
months months
months

Tsegabrhan Mekonen (PhD) 40

Earliest Activity Start and Finish Times / Latest Activity Start and Finish Times

Lay foundation
Build house
3
Site clearing
5 EF=LF
and preparation 2
3 Finish work

11 2
8
3 1
1 1
Design house
and obtain 7
financing 4
1
1 6
Select carpet
Order and 1
receive materials
Select paint

Tsegabrhan Mekonen (PhD) 41

Earliest Activity Start and Finish Times / Latest Activity Start and Finish Times

Lay foundation
Build house
3 4 6 EF=LF
Site clearing
5 6 9
and 2 4 6
preparation 3 6 9 Finish work

11 0 3 2 3 4 8 9 10
13 0 3 1 3 4 1 9 10
Design house
and obtain 7 7 8
financing 4 4 5
1 8 9
1 5 6 6 6 7
Select carpet
Order and 1 7 8
receive materials
Select paint

Tsegabrhan Mekonen (PhD) 42

 AOA Project Network for building a House

4
Lay foundation Dummy
(D) 2 0 (E)
Build (H) End
4,5 5,6
Start house Finish
work
3 0,3 1 3,4 1 4,6 6,9 9,10
1 0,3 2 3,4 3 4,6 5 3 6,9 7 8
1 9,10
(A or 1) (B or 2) (C) 7,8
1
Design Site Order and (F) 6,7 1 8,9
house and clearing receive Select (G)
7,8
obtain and materials paint Select
6 carpet
financing preparation

 Path A-B-D-E-H is the Critical path, ES=LS, EF=LF for the critical activities
 Minimum project completion time: 10 months

Tsegabrhan Mekonen (PhD) 43

Detailed activity time schedule
Activity LS ES LF EF Slack S
LS-ES or LF-EF
*1 or (A) 0 0 3 3 0
*2 or (B) 3 3 4 4 0
*3 or (C) 4 4 6 6 0
4 (D) 5 4 6 5 1
*5 (E) 6 6 9 9 0
6 (F) 7 6 8 7 1
7 (G) 8 7 9 8 1
*8 or (H) 9 9 10 10 0

* Critical activities: LS= ES or LF= EF or Slack time zero

Tsegabrhan Mekonen (PhD) 44

Activity Start node End node Activity time ES EF LS LF Slack
A 1 2 3 0 3 0 3 0
B 2 3 1 3 4 3 4 0
C 3 4 1 4 5 5 6 1
Dummy 4 5 0 5 5 6 6 1
D 3 5 2 4 6 4 6 0
E 5 7 3 6 9 6 9 0
F 5 6 1 6 7 7 8 1
G 6 7 1 7 8 8 9 1
H 7 8 1 9 10 9 10 0

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