CHAPTER FOUR

Network Models and Project Management

GEMECHU ABDISSA (PhD)

Email:
[email protected]
Mob. 0927119356

1
Network model
▶ A network consists of nodes linked by arcs (branches).

▶ The points on a network are called nodes and may be represented as circles
or squares.

▶ The lines connecting the nodes are called arcs/branches.

Cont’d…
Table 1: components of typical network

Nodes Arc Flow

Intersections Roads Vehicles

Airports Switching Airlines Aircraft
points Pumping Wire, channels Messages
stations Work Pipes Fluids
centers Materials Jobs
handling routes products
 Rules of Network Construction
▶ Try to avoid arrows that cross each other.

▶ Use straight arrows.

▶ No event can occur until every activity preceding

it has been completed.

▶ An event cannot occur twice i.e. there must be no loops.

▶ An activity succeeding an event cannot be started until that event

has occurred…….
Rules… cont’d…
▶ Use arrows from left to right. Avoid mixing two directions, vertical and
standing arrows may be used if necessary.

▶ Dummies should be introduced if it is extremely necessary.

▶ The network has only one entry point called the start event and one point
of emergence called the end or terminal event.
PROJECT
SCHEDULING
WHAT IS A PROJECT?
 Cont’d…..
▶Project is an interrelated set of activities directed towards the
accomplishment of a unique, often major outcome and that have a
definite starting and ending point.

▶critical path method (CPM) and the program evaluation review

technique (PERT), two management science techniques
developed in the late 1950s to plan, schedule, and control large,
complex projects with many activities.
CPM/
PERT
▶ These approaches differ primarily on how the duration and the cost of
activities are processed.

▶ In the case of CPM, it is assumed that details about these inputs are known
with certainty, whereas for

▶ PERT, these details are not known with certainty.

▶ Both approaches use a net-work representation to display the

relationships between project activities.
CPM/
PERT
▶ These approaches help managers to address questions such as:

1. What is the total time required to complete the project (the

expected total time)?

2. What are the start and the completion times for individual
activities?

3. Which critical activities must be completed as scheduled to meet

the estimated project completion time?
CPM/
PERT…..
4. How much delay can be tolerated for non-critical activities without
incurring a delay in the estimated project completion time?

5.Whatis the least expensive way to speed up a project to meet a

targeted completion time?

PERT also provides answers to the following additional questions:

6. What is the probability of completing a project within a given time

frame?

7. What is the variability in the project completion time?

Situations in network diagram
B
A A must finish before either B or C
can start
A
C
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
 Cont’d…
▶ A project network representation is used to depict the project activities and
their relation-ships.

▶ A network consists of a set of circles referred to

as nodes and lines connecting nodes together referred to as arcs.

▶ The two common approaches of a project network representation are

Activity-On-Node (AON) or Activity-On-Arc (AOA).
AON and AOA
▶ In AON approach, the nodes of the network
represent the project activities and the arcs show their precedence
relationships.

▶ In AOA approach, the project activities are reported on arcs and nodes
represent the starting or the completion of activities.
 PROJECT SCHEDULING WITH DETERMINISTIC ACTIVITY
DURATIONS
▶ For larger project networks, CPM provides a most efficient approach for
project scheduling when the duration of activities are known with
certainty.

▶ The approach consists of finding the earliest and the latest schedules to
avoid delays in project completion.

▶ Therefore, for all activities in the network

the following information is computed:
Forward
Pass
▶ 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
Backward Pass
Latest Start Time (LS)
• Latest time an activity can start without delaying critical path
time.
LS= LS of immediate predecessors - t
Latest finish time (LF)
• latest time an activity can be completed without delaying critical
path time.
• LF = minimum LS of immediate predecessors
Slack/
float
▶ The slack time for an activity refers to the length of time that can be tolerated
without incurring a delay in the scheduled project completion time.

▶ The slack time per activity needs to be calculated first to identify the critical
path(s), by considering either the start times or the finish times.

▶ Hence, for each of the activities in the project network, the slack time can be
calculated as follows:

Slack= LS-ES or LF-EF

 CPM Analysis
Step 1: Draw the CPM network

Step 2: Analyze the paths through the network

Step 3: Determine the float for each activity

▶ Compute the activity’s float/slack

float = LS - ES or LF - EF

▶ Float is the maximum amount of time that this activity can be delay in its
completion before it becomes a critical activity, i.e., delays completion of the
project

Step 4: Identify the critical with that the sequence of activities and events where there is
no “slack” i.e.. Zero slack

▶ Longest path through a network

CPM Calculation
▶ Path

▶ A connected sequence of activities leading from the starting event to the ending
event

▶ Critical Path

▶ The longest path (time); determines the project duration

▶ Critical Activities

▶ All of the activities that make up the critical path

Example of Network Diagram
Activities Immediate Duration Required:
Predecess  Draw the network
ors  Length of each path
A - 4  Find critical path
B A 6  Slack time for each
C A 3 path
D B 6
E D 14
F C 5
G E,F 2
H G 2
I G 3
J H,I 4
K J 2
Solution:

B. Calculating the Path Completion Times Using Deterministic Time

Estimates
Solution:…..

▶ Since activity A must be done first, it has ES 0. The earliest that activity A can be
finished is calculated as its earliest start time plus the time it takes to do the
activity. The general formula is EF = ES + activity time estimate. For activity A, the
formula is EF= ES + the activity A time estimate. Or, EF= 0 + 4 weeks, or a total of
4 weeks. The earliest start time for both activities B or C is equal to the EF for
activity A, the activity immediately preceding it.
Solution:…..
Using ES, EF, LS, and LF to Find
Slack

In this example, activities A, B, D, E, G, I, J, and K are on the critical

path. Activities C, F, and H have slack.
Exercis
e
Activities Immediate Duration
Predecess
ors
A - 8
B A 4
C A 6
D B 11
E C 2
F D,E 3
G F 1
Required:
 Draw the network
 Length of each path
 Find critical path
 Slack time for each
path
PROJECT SCHEDULING WITH PROBABILISTIC ACTIVITY
DURATIONS
▶ The CPM approach assumes that the duration of activities are known
with certainty and the actual duration will turn out to be exactly as
estimated.

▶ However, in practice this is not always possible and many projects

involve variability in activity times due to factors such as lack of prior
experience, equipment breakdown, unpredictable weather conditions,
late delivery of supplies, and others.

▶ PERT analysis is used when the duration of activities are not known
with certainty.
PROJECT SCHEDULING WITH PROBABILISTIC ACTIVITY
DURATIONS….
▶ It involves three types of estimates of the duration of an activity instead

of one single value as in the case of CPM:

1. The optimistic duration: a= the time an activity will take under the
most favorable conditions/the shortest time period.

2. The pessimistic duration: b= the time an activity will take under the
most unfavorable conditions/the longest time period.

3. The most likely duration: m= the most realistic time an activity will
require to be completed, that is, the time an activity will take
under normal conditions.
PROJECT SCHEDULING WITH PROBABILISTIC ACTIVITY
DURATIONS………

The important issue in network analysis is the average of

expected time for each activity, te and the variance of each
activity time, δ2 .
PROJECT SCHEDULING WITH PROBABILISTIC ACTIVITY
DURATIONS…….
 To find the expected activity time (t), the beta
distribution weightsa+ 4m +bas follows:
the estimates
t=
6
 To compute the dispersion or variance of activity completion
time, we use the formula:

2
 b  a 
Variance =  6 
Example:
Suppose a civil engineering firm has to bid for the construction of a dam. The
activities and time estimates are given below. Do the next requirements.
Activity a m b
1-2 (a) 1 3 4
1-3 (b) 2 4 6
1-4 (c) 2 3 5
2-5 (d) 3 4 5
3-6 (e) 3 5 7
4- 7 (f) 5 7 9
5-8 (g) 2 3 6
6-8 (h) 4 6 8
7-8 (I) 3 4 6
Cont.……….

REQUIRED:

a) Draw the project network and identify all the paths.

b) Compute the expected time for each activity and the expected duration for
each path.

c) Determine the expected project length.

d) Identify the critical path and critical activities.

e) Compute the variance for each activity and the variance for path .
Solutio
n a)
Cont…
..
SOLUTIO
N
B) Times
Path Activity a m b te = Path
a+4m+b total
6
1-2-5-8 a 1 3 4 2.83
d 3 4 5 4.00 10.16
g 2 3 6 3.33
1-3-6-8 b 2 4 6 4.00
e 3 5 7 5.00 15.00
h 4 6 8 6.00

1-4-7-8 c 2 3 5 3.17
f 5 7 9 7.00 14.34
3 4 6 4.17
i
 Cont…
..path is path 1-3-6-8, since it has the longest expected
C) The critical
duration. Times
Path Activity a m b δ=activity=(b- a)2 δ2 path
36

1-2-5-8 a 1 3 4 (4-1)2/36=9/36 = .25

d 3 4 5 (5-3)2/36=4/36= .11 0.80
2 3 6 (6-2)2/36=16/36= .44
g
1-3-6-8 b 2 4 6 (6-2)2/36=16/36= .44 1.32
e 3 5 7 (7-3)2/36=16/36= .44
4 6 8 (8-4)2/36=16/36= .44
h
1-4-7-8 c 2 3 5 (5-2)2/36=9/36=.25 0.94
f 5 7 9 (9-5)2/36=16/36=.44
i 3 4 6 (6-3)2/36=9/36=.25
 Cont’d……

▶ Using the variance for each activity, we can calculate the variance for
paths through the network.
▶ To calculate the variance for a specific path through the network, add
the variance for each of the activities on the path.
For example the variance of path c-f-I, is 0.94 weeks (0.25 + 0.44 + 0.25)
▶ The size of the variance reflects the degree of uncertainty for the path.
▶ The greater the variance, the greater is the uncertainty.
 Crashing Projects
▶ Managers wants to reduce the time they spend finishing a particular
project because of deadlines, promised completion dates, penalty
clauses for late completion, or the need to put resources on a new
project.

▶ In many situations it is possible to reduce the length of a project by

injecting
additional resources.

▶ In order to make a rational decision about which activities (If any)

to crash and the extent of crashing desirable, a manager needs
1. Regular time and crashing time estimates for
the following information:
each activity
2. Regular cost and crush cost estimates for each
activity
3. A list of activities that are on the critical
path
Crashing Projects…..
The general procedure for crashing is:

1. Obtain estimates of regular crash times and costs for each

activity.

2. Determine the length of all paths and paths with slack times.

3. Determine which activities are on the critical path.

4. Crash critical activities, in order of increasing costs, as long as

crashing costs do not exceed benefits.
Exampl
e:
Exampl
e:Note that we cannot reduce activities C, G, H, or K, so for those
▶
activities the maximum number of weeks of reduction is set to 0.
▶ Activities not on the critical path have slack and typically do not
need to be reduced.
Exampl
e:
Recommend which activities should be crashed so that the project
needs to be finished in 36 weeks instead of 41 weeks by using a
normal time.