Network Models

LEARNING OBJECTIVES
 Identify the characteristics of a project and project management.
 Understand the terms of the topic: activity, event, slack, dummy activity, critical
activity, critical path, network, and crash time.
 Distinguish PERT from CPM.
 Explain the importance of computing PERT/CPM.
 Construct a simple CPM network.
 Analyze a CPM activity/event.
 Define the three estimates of activity time.
 Compute weighted average times in PERT.
 Describe crashing an activity and prepare a cost analysis.
Managers encounter many
administrative situations requiring
them to plan, organize, and control
a project that consists of several
different but interrelated activities.
There are two widely known network management tools:
Critical Path Method (CPM) and Program Evaluation
and Review Technique (PERT).
Primarily
concerned with
finding ways to
reduce the time
required to
perform tasks,
such as
construction work
and plant
maintenance. To
determine the
optimal tradeoff
 Characteristics of Project Management
1. The time of completion of the project can take weeks, months, or even
years. Due to the extended duration of such projects, many changes can
happen, which are oftentimes difficult to forecast.

2. The complexity of the nature of the project involves many interrelated

activities or events. It also involves participants from the organization, as
well as those who are not directly employed in the company, such as
suppliers, contractors, etc.

3. Delays in the project may require the payment of penalty fees.

4. The sequential nature of projects means that some activities cannot

begin until a certain condition or event has taken place.

5. Projects are carefully planned activities that involve a unique

undertaking.
Activity. Activity refers to an effort that needs resources and time to
accomplish a goal or a project.

Event. A goal that has been completed at a certain period is considered

an event. An event can also be called a milestone as it happens after all
activities that precede it must be accomplished.

Project. A project involves a series of events and activities with a

definable beginning and a definable end, which is a goal.

Network. This refers to activities and events that are arranged in a

logical and chronological order and presented graphically that
demonstrate the relationships among the different activities and events
that lead to the completion of a project.
Critical Activity. An activity that has a strong impact on project completion. A
slight delay of a critical activity will hold up the target completion date of an
entire project.

Path. A path represents a collection of activities that connects one event to

another.

Critical Path. A path that is comprised of a sequence of critical activities that

occur from the start of a project until full completion. It is the longest path
throughout the project network.

Immediate Predecessors. These are activities that must be accomplished

before the start of an activity in question.

Activity Slacks. Also termed as float activity, it is the length of time that a
task is allowed to be delayed as it will not cause a delay for the entire project.
Differences between PERT and CPM

Pert usually requires three estimates to

calculate the weighted average of the expected
completion date of the project based on the
probability distribution of time of completion.
Thus, PERT is a probabilistic tool, while CPM is a
deterministic tool, CPM needed only one
estimate of project duration.
CPM includes an explicit estimate of the cost,
whereas PERT is a tool mainly focused on
planning and controlling time.
To allow efficient project management, PERT/CPM can
aid in determining critical activities. PERT/CPM also
provides techniques that can inform project managers
how close the remaining activities are to becoming
critical

Minimum information that PERT/CPM can provide:

1. Activities that are critical
2. Activities that are noncritical
3. The slack time per noncritical activity.
4. Other information as needed by management
 Advantages of PERT/CPM

Detailed Planning. PERT/CPM enables management to prepare a

detailed plan that specifies what must be done to accomplish all tasks on
time.

Commitments and Communication. All participants in the project are

required to make a commitment to following completion dates.
PERT/CPM also allows more fluid communication with members of the
organization and between suppliers and vendors.

Efficient Monitoring and Control. All critical activities must be identified.

Doing this enables management to efficiently monitor all activities through
records and reports.
 Advantages of PERT/CPM

Identifying Potential Problem Areas. Contingency plans must be

prepared for the anticipated problem areas.

Proper Use of Resources. PERT/CPM enables management to have a

preview of the overall plan. Thus, resources are properly allocated,
especially on bottlenecks or problematic areas.

Rescheduling. An efficient monitoring system can easily pinpoint

deviations from the schedule.
 PERT/CPM Procedure

a. The formulation phase is for the preparation of the basic inputs to

PERT/CPM.
1. Analyze the project by defining the activities and
assigning responsibilities to the participants.
2. After finalizing the content of each activity, the sequence of
executions is determined.
3. Estimate the length of time for each activity.
b. The solution phase involves the creation of the network, event
analysis, and activity analysis.
c. Analysis and application is focused on monitoring and control, as well
as resource utilization.
 Solving CPM

Forward pass aims to determine the earliest

start and earliest finish time of each activity by
going forward on the network.

Backward pass identifies the latest start and

the latest finish time of each activity by
moving backward through the network.
 Example

Three months before the Fair College

Foundation Week, Ms. Dina Ignacio was
appointed as the committee chair. It will be a
week-long celebration that will be participated
in by the Basic Education Department and
tertiary schools. As part of the preparations
for the 20th foundation week, several activities
have to be undertaken.
Step 1. List down the activities, immediate predecessors, and
approximated time as provided by the problem.

Immediate Time
Activity Description
Predecessor (Weeks)
A Brainstorming on Foundation Day theme. - 0.5
B Submit proposals for Foundation Weeks activities that include the budget and a list of expenses. A 1
C Finalize the Foundation Week activities and consolidate the proposal for the activities. B 1
D Set an appointment with the activity heads and participants. B 1
E Obtain approval of school president on the proposed Foundation Week activities and budget C 2
F Activity heads are to prepare check request for their respective activities. D,E 1

G Purchase raw materials, costumes, accessories, etc. to be used for the Foundation Week celebration F 1
H Hire celebrities or entertainers for the Opening Cerermonies. F 2
I Practice for dance numbers and other performances G 1

Announce the programs/events schedule, guidelines, and venues of the games, contests, and other activities
J for the Foundation Week I 1
K Distribution of program and invitations to the schools management and officials. I,J 1
Step 2. Construct the project network
Step 3. Calculate the completion time of each activity
Step 4. Compute the earliest start time and the earliest finish
time of the initial activities
ES = earliest start time for an activity

EF = earliest finish time for an activity

t = activity time
Step 5. Calculate the earliest start time and earliest finish time
using the forward pass
Step 6. Enter the latest start time and latest finish time using
the backward pass.
LS = latest start time for an activity

LF = latest finish time for an activity

t = activity time
Step 7. Calculate the latest finish time and latest start time.
Step 8. The zero slack points to the critical path.

Calculate the slack for all activities using the formula:

Slack = LS – ES = LF - EF
The critical path is A-B-C-E-F-H-J-K, and completion of the project is at 9.5
weeks. Activities A, B, C, E, F, H, J, and K are considered critical activities, which
means that those activities must be completed within the required time frame.
Failure to complete those activities on time would cause a delay in the entire
project. Activity D can be extended for two weeks because it has slack time. This
is the same as activities G and I with a slack time of one week each.