Network Analysis Network is a graphical representation of all the Activities and Events arranged in a logical and sequential order.

. Network analysis plays an important role in project management. A project is a combination of interrelated activities all of which must be executed in a certain order for its completion. Activity: Activity is the actual performance of the job. This consumes resources (Time, human resources, money, and material) Event: An event refers to start or completion of a job. This does not consume any resources. Analyzing network, the planning, scheduling and control of a project becomes easier. PERT and CPM are the two most popular network analysis technique used to assist managers in planning and controlling large scale projects. PERT- (Programme Evaluation Review Technique) CPM - (Critical Path Method)

Applications: Construction of a Residential complex, Commercial complex, Petro-chemical complex Ship building Satellite mission development Installation of a pipe line project etc... Historical Evolution. Before 1957 there was no generally accepted procedure to aid the management of a project. In 1958 PERT was developed by team of engineers working on a Polaris Missile programme of the navy. This was a large project involved 250 prime contractors and about 9000 job contractors. It had about 19 million components. In such projects it is possible that a delay in the delivery of a small component might hold the progress of entire project. PERT was used successfully and the total time of completion was reduced from 7 years to 5 years. In 1958 Du Pont Company used a technique called Critical Path Method (CPM) to schedule and control a very large project like overhauling of a chemical plant, there by reducing the shutdown period from 130hrs to 90 hrs saving the company 1 million dollar. Both of these techniques are referred to as project scheduling techniques.

Differences between PERT & CPM PERT CPM

1. It is a technique for planning 1. It is a technique for planning scheduling & controlling of projects scheduling & controlling of projects whose activities are subject to whose activities not subjected to uncertainty in the performance any uncertainty and the time. Hence it is a probabilistic performance times are fixed. Hence model it is a deterministic model 2.It is an Event oriented system 3.Basically does not differentiate critical and non-critical activities 4. Used in projects where resources (men, materials, money) are always available when required. 5. Suitable for Research and Development projects where times cannot be predicted 2. It is an Activity oriented system Differentiates clearly the critical activities from the other activities. 4. Used in projects where overall costs is of primarily important. Therefore better utilized resources 5.Suitable for civil constructions, installation, ship building etc.

Rules for drawing the network diagrams.

1 2 3 4

In a network diagram, arrows represent the activities and circles represent the events. The tail of an arrow represents the start of an activity and the head represent the completion of the activity.

The event numbered 1 denotes the start of the project and is called initial event. Event carrying the highest number in the network denotes the completion of the project and is called terminal event.

Each defined activity is represented by one and only arrow in the network. Determine which operation must be completed immediately before other can start. Determine which other operation must follow the other given operation.

The network should be developed on the basis of logical, analytical and technical dependencies between various activities of the project.

The basic network construction Terminology used. Network representation: There are two types of systems AOA system (Activity on Arrow system) In this activities are represented by an arrows. AON system (Activity on Node system ) In this method activities are represented in the circles.

Problem 1. Construct an arrow diagram for the following project. Activities A B C D E F Relationship Precedes B,C Precedes D,E Precedes D Precedes F Precedes G Precedes G

E B G A C D F

Problem 2. Construct an arrow diagram for the following project. Job A B C D E Immediate predecessor A A C B,D Duration 14 Days 3 Days 7 Days 4 Days 10 Days

E B A 14 3 C 7 D 4 10

Key

Job Duration

Problem 3. Construct an arrow diagram for the following project. Job A B C D E F Immediate predecessor A,B A D C,E

C B F A D E

Problem 4. Construct an arrow diagram for the following project. Activity A B C D E Predecessor A,B B,C

A B C E

Problem 5. Construct an arrow diagram for the following project. Activity A B C D E F Predecessor A,B B,C A,B,C

A B C E

D F

Problem 6. Draw the PERT network for the following project Event A is followed by events B & C Event D is preceded by events B & C Event H is the successor to event E Event E is the successor to event B Event F is the successor to event D & G Event C is the predecessor to event G Event J is preceded by events F,G, & H

E B H A J F C G

10

CRITICAL PATH Meaning: The longest path in a project network which determine the duration of the project is known as critical path.

Determination of Critical Path

2 1 4 3 5 5 2 4 2 3 7 6 1 6 2 3 5 4 8

Step 1.List all the possible sequences from start to finish Step 2.For each sequence determine the total time required from start to finish. Step 3.Identify the longest path (Critical Path)

Step 1. List all the possible sequences from start to finish Path A : 1 2 5 8 Path B : 1 3 5 8 Path C : 1 3 6 7 8 Path D : 1 3 4 7 8 Path E : 1 3 4 6 7 8 Step 2.For each sequence determine the total time required from start to finish. Path A : 2 + 3 + 4 = 9 days Path B : 4 + 5 + 4 = 13 days Path C : 4 + 5 + 6 + 1 = 16 days Path D : 4 + 2 + 3 + 1 = 10 days Path E : 4 + 2 + 2 + 6 + 1 = 10 days

11

Step 2.For each sequence determine the total time required from start to finish. Path A : 2 + 3 + 4 = 9 days Path B : 4 + 5 + 4 = 13 days Path C : 4 + 5 + 6 + 1 = 16 days Path D : 4 + 2 + 3 + 1 = 10 days Path E : 4 + 2 + 2 + 6 + 1 = 10 days Step 3.Identify the longest path (Critical Path) Path C : 4 + 5 + 6 + 1 = 16 days Path C : 1 3 6 7 8

Determination of Critical Path

2 1 4 3 5 5 2 4 2 3 7 6 1 6 2 3 5 4 8

Step 1.List all the possible sequences from start to finish Step 2.For each sequence determine the total time required from start to finish. Step 3.Identify the longest path (Critical Path)

12

Float (Slack) Float (Slack ) refers to the amount of time by which a particular event or an activity can be delayed without affecting the time schedule of the network. Float (Slack) Float (Slack) is defined as the difference between latest allowable and the earliest expected time. Event Float/Slack = LS ES Where LS = Latest start time ES = Early start time. Earliest start : Denoted as ES Earliest start time is the earliest possible time by which the activity can be started. Early finish time : Denoted as EF Early finish time is the earliest possible time by which the activity can be completed. Latest start time : Denoted as LS Latest start time is the latest possible time by which the activity can be started Late finish time : Denoted as LS Late finish time is the latest possible time by which the activity can be completed Total float (TF) / Total slack (TS) Total float of the job is the differences between its Late start and Early start or Late finish and Early finish i.e. TF( CA) = LS (CA) - ES (CA) Or TF( CA) = LF (CA) - EF (CA) CA = Current activity Free float (FF) Free float is the amount of time a job can be delayed without affecting the Early start time of any other job. FF(CA) = ES(SA) EF (CA) CA = Current Activity SA = Succeeding Activity Independent Float (IF) Independent Float is the amount of time that can be delayed without affecting either predecessor or successor activities. IF = ES(SA) LF(PA) - Duration of CA ES = Early Start LF = Late Finish SA = Succeeding Activity PA = Preceding Activity CA = Current Activity

13

Example 1 Construct the Network for the following Project and determine the following i) Critical Path ii) ES,EF,LS,LF iii) TF,FF

Activity

Duration

1-2 1-4 2-3 2-4 3-5 4-5 5-6

14 3 7 0 4 3 10

Construction of the Network and Determination Critical Path

4

3
1 G 0

10

E
D 2 7 3

14

14

Determination of TF and FF
1) (1 ) 9) 3 0, )(1 2 B( ,2 19 3(
4

G(14,14)

0(22,22)

C(14 ,17) (8) 3(2 2,25 )(8)

F(25,35)(0)

14

A( 0, 14 )(0 (0 ) ,1 4) (0 )

D(14,21)(0) 2 7(14,21)(0)

TF( CA) = LS (CA) - ES (CA) FF(CA) = ES(SA) EF (CA) Key IF = ( ES(SA) LF(PA)) - Duration of CA

Activity Duration

ES

EF

E(21 ,25)( 0) 4(21 ,25) (0)

10(25,35)(0)

3 Job (ES,EF)(FF) Duration (LS,LF)(TS)

LS

LF

TF

FF

1-2 1-4 2-3 2-4 3-5 4-5 5-6

14 3 7 0 4 3 10

0 0 14 14 21 14 25

14 3 21 14 25 17 35

0 19 14 22 21 22 25

14 22 21 22 25 25 35

0 19 0 0 0 8 0

0 11 0 0 0 8 0

15

Example 2 Construct the Network for the following Project and determine the following i) Critical Path ii) ES,EF,LS,LF iii) TF,FF Activity 1-2 2-3 2-4 3-5 3-6 4-6 4-7 5-8 6-8 7-8 Duration 2 3 5 4 1 6 2 8 7 4

16

(0, 2)(0) 1 2(0, 2)(0) 2

(2,
5(2 ,

7)( 0) 7)( 0)

Activity

Duration

ES

EF

LS

LF

1-2 2-3 2-4 3-5 3-6 4-6 4-7 5-8 6-8 7-8

2 3 5 4 1 6 2 8 7 4

0 2 2 5 5 7 7 9 13 9

2 5 7 9 6 13 9 17 20 13

0 2 5 8 12 7 14 12 13 16

2 8 7 12 13 13 16 20 20 20

(9 ,1 3) (0 4(1 ) 6, 20 )(7 )

) 5)(0 (2, (3) , 8) 3(5

5 (9,1 7)(0 0) ( ) ) 8 (12 ,9 3) ,20 ( (5 ) ) 2 ( 3 ) ,1 4(8 3 (5, ) 6)( 20)(0 1(1 7) (13, 2, (0) 13 , 20) )(7 ) 7(13 6 0) ) ( 0) 3 ( ,1 (7 , 13) 7 (7, 9)(0) ( 6 4 7 2(14,16)(7) (ES,EF)(FF) Key Duration (LS,LF)(TS)

TF

FF

0 3 0 3 7 0 7 3 0 7

0 0 0 0 7 0 0 0 0 0

17

In PERT model, 3 time values are associated with each activity. They are i) Optimistic time = to ii) Pessimistic time = tp iii) Most likely time = tm These three times provide a measure of uncertainty associated with that activity Optimistic Time: This is the shortest possible time in which the activity can be finished. It assumes that every thing goes well. Pessimistic Time: This is the longest time that an activity could take. It assumes that every thing goes wrong. Most likely Time: It is the estimate of the normal time that an activity would take. This assumes normal delays. Expected Time ( te): te can be calculated by the following formula te = (to + 4tm + tp) / 6 Example. If a job has to = 5 days, tp = 17 days, tm = 8 days Then Expected time for the job would be te = (to + 4tm + tp) / 6 = (5 + 4 x 8 + 17) / 6 = 9 days Variability of activity times Standard deviation and Variance are commonly used in statistics to measure the variability of number. In PERT model, to measure the variability of an activity time duration standard deviation and variance are used. A large standard deviation represents high variability and vice-versa. Calculation of Standard Deviation and Variance Variance = (Standard deviation )2 Standard deviation =(t p t o) / 6 Expected length of the Critical Path = te of all the activities along the Critical Path Probability of completing the project within a given date Z = (TS TE ) / Where TS = Scheduled time for project completion TE = Expected time for the project completion = Standard deviation for the Network Network = Sum of variances along the Critical Path = ( i-j )2 Where i-j is the variance of a activity i-j along the critical path

18

Example 1 Construct the Network for the following project and calculate the probability of completing the project in 25 days Activity 1-2 1-3 2-3 2-4 3-4 3-5 4-6 5-6 to 2 4 2 2 0 3 6 1 tm 6 8 4 3 0 6 10 3 tp 10 12 6 4 0 9 14 5

1.Construction of the Network

2-3-4

21

10 6-

6-

4-

10
6

2-4-6

4-

8-

12

-0

-0
15

5 3-

3-6-9 3

19

2. Calculation of Expected time for all the activities

2-3-4

6 21

-10 6

6-

2-4-6 4

410 10
6

4-

8-

12

-0

-0

0
3-6-9

15

-5 3

3 6

Expected Time ( te): te can be calculated by the following formula te = (to + 4tm + tp) / 6

3. Determination of Critical Path

2-3-4

6 21

-10 6

6-

2-4-6 4

410 10
6

4-

8-

12

-0

-0

0
3-6-9

15

-5 3

3 6

Key

to - tm - tp te

Expected Duration of the project Te = 20 days

20

Activity 1-2 1-3 2-3 2-4 3-4 3-5 4-6 5-6

to 2 4 2 2 0 3 6 1

tm 6 8 4 3 0 6 10 3

tp 10 12 6 4 0 9 14 5

Critical activities 1-2 2-3 3-4 4-6 -

2 = ((t p t o) / 6)2 1.78

0.44

1.78

2 = 4.00

Network = Sum of variances along the Critical Path = (Network )2 =4 =2 Probability of completing the project within a given date Z = (TS TE ) / Where TS = Scheduled time for project completion TE = Expected time for the project completion = Standard deviation for the Network = (25 20) / 2 = + 2.5 From the Normal distribution Table, we get the probability of completing the project in 25 days is 99.4%

21

Example 2. The following table lists the jobs of a network along with their time estimates. Activity 1-4 1-3 1-2 4-5 3-5 3-6 5-6 2-6 to 3 3 6 1 3 2 6 4 tm 9 6 12 4 9 5 12 19 tp 27 15 30 07 27 08 30 28

a) Draw the project network. b) What is the probability that the job will be completed in 35 days? c) What due date has 90% chance of being met?

1.Construction of the Network

2

30 26 -1
1 3 - 6 - 15 3

4-1 9-

28

2-5-8

-9

3-

-2 7
4

9-

27
5

6-

12

0 -3

22

2. Calculation of Expected time for all the activities

2

30 21 6 14
1 3 - 6 - 15 7 3

4-1 928 18
2-5-8 5

11 - 27
4

-9

311
1-4-7 4

9-

27
5

2-1

30
14

Expected Time ( te): te can be calculated by the following formula te = (to + 4tm + tp) / 6

3. Determination of Critical Path

2

30 21 6 14
1 3 - 6 - 15 7 3

4-1 928 18
2-5-8 5

11 - 27
4

-9

311
1-4-7 4

9-

27
5

2-1

30
14

Key

to - tm - tp te

Expected Duration of the project Te = 32 days

23

As there are two Critical Paths, the path which gives more variance(2) is taken as Critical Path Path A Activity 1-2 2-6

2 = ((t p t o) / 6)2 ((30 6)/6)2 ((28 4)/6)2

2 16 16 2 = 32.00

Path B Activity 1-3 3-5 5-6 2 = ((t p t o) / 6)2 ((15 3)/6)2 ((27 3)/6)2 ((30 6)/6)2 2 4 16 16 2= 36.00 = 2 = 36 =6

Therefore the Critical Path is 1 - 3 - 5 - 6 b) Probability of completing the project within a given date Z = (TS TE ) / Where TS = Scheduled time for project completion TE = Expected time for the project completion = Standard deviation for the Network = (35 32) / 6 = + 0.5 From the Normal distribution Table, we get the probability of completing the project in 35 days is 69.15% c) The due date for 90% chance of being met. Probability of completing the project within a given date Z = (TS TE ) / The value of Z from the table for a 90% probability is +1.28 TS = ? (to be calculated) ,TE = 32, = 6 i.e. 1.28 = (TS 32) / 6 TS = 39.68 days

24

CPM Model In 1958 Du Pont Company used a technique called Critical Path Method (CPM) to schedule and control a very large project like overhauling of a chemical plant, there by reducing the shutdown period from 130hrs to 90 hrs saving the company 1 million dollar. Both of these techniques are referred to as project scheduling techniques. Cost considerations in PERT / CPM The total cost of any project comprises of two costs. Direct cost - material cost, manpower loading Indirect cost - overheads such as managerial services, equipment rent, building rent etc.

Direct cost

Crash

Normal

Job duration Shorter the duration higher will be the Direct expenses

Indirect cost

Crash

Normal

Job duration

Shorter the duration lesser will be the Indirect expenses

25

Total cost

Cost

Dire ct c ost ost ct c e r i Ind

Crash

Optimum

Normal

Job duration

Example 1. Find the lowest cost and optimum cost schedule for the following project, given the over head expenses as Rs.45/-day. Activity Normal duration Crash duration Cost of crashing per day

1-2 2-3 2-4 3-4

3 4 7 5

1 2 3 2

Rs.40 Rs.40 Rs.10 Rs.20

26

1.Construction of the Network

7-3
3 -1 1 40 2

10

2
3

40

Normal duration Crash duration

Key
Cost of crashing per day in Rs.

1.Determination of Critical path

20

4-

-2

7-3
3 -1 1 40 2

10

2
3

40

Normal duration Crash duration

Key
Cost of crashing per day in Rs.

20

4-

-2

27

Step 1.
3 -1 1 40 2 40 7-3 12 days
Activity crashed Days saved Project duration

4-2 3

5-2 20 4 4

10
Cost of crashing Total cost of crashin g -Nil40 70 150 250 Over Head cost Total cost

None 3-4 3-4 &2-4 1-2 2-3&2-4

0 2 1 2 2

12 10 9 7 5

-Nil20 x 2 =40 20x1+10x1 =30 40 x 2 =80 40x2+10x2 =100

45 x 12 45 x 10 45 x 9 45 x 7 45 x 5

540 490 475 465 475

Step 2.
3 -1 1 40 2 40 7-3 10 days
Activity crashed Days saved Project duration

4-2 3

3-2 20 4

10
Cost of crashing Total cost of crashin g -Nil40 70 150 250 Over Head cost Total cost

None 3-4 3-4 &2-4 1-2 2-3&2-4

0 2 1 2 2

12 10 9 7 5

-Nil20 x 2 =40 20x1+10x1 =30 40 x 2 =80 40x2+10x2 =100

45 x 12 45 x 10 45 x 9 45 x 7 45 x 5

540 490 475 465 475

28

Step 3.
3 -1 1 40 2 40 6-3 9 days
Activity crashed Days saved Project duration

4-2 3

2-2 20 4

10
Cost of crashing Total cost of crashin g -Nil40 70 150 250 Over Head cost Total cost

None 3-4 3-4 &2-4 1-2 2-3&2-4

0 2 1 2 2

12 10 9 7 5

-Nil20 x 2 =40 20x1+10x1 =30 40 x 2 =80 40x2+10x2 =100

45 x 12 45 x 10 45 x 9 45 x 7 45 x 5

540 490 475 460 475

Step 3.
3 -1 1 40 2 40 6-3 9 days
Activity crashed Days saved Project duration

4-2 3

2-2 20 4

10
Cost of crashing Total cost of crashin g -Nil40 70 150 250 Over Head cost Total cost

None 3-4 3-4 &2-4 1-2 2-3&2-4

0 2 1 2 2

12 10 9 7 5

-Nil20 x 2 =40 20x1+10x1 =30 40 x 2 =80 40x2+10x2 =100

45 x 12 45 x 10 45 x 9 45 x 7 45 x 5

540 490 475 460 475

29

Step 4.
1 -1 1 40 2 40 6-3 7 days
Activity crashed Days saved Project duration

4-2 3

2-2 20 4

10
Cost of crashing Total cost of crashin g -Nil40 70 150 250 Over Head cost Total cost

None 3-4 3-4 &2-4 1-2 2-3&2-4

0 2 1 2 2

12 10 9 7 5

-Nil20 x 2 =40 20x1+10x1 =30 40 x 2 =80 40x2+10x2 =100

45 x 12 45 x 10 45 x 9 45 x 7 45 x 5

540 490 475 460 475

Step 5.
3 -1 1 40 2 40 4-3 5 days
Activity crashed Days saved Project duration

2-2 3

2-2 20 4

10
Cost of crashing Total cost of crashin g -Nil40 70 150 250 Over Head cost Total cost

None 3-4 3-4 &2-4 1-2 2-3&2-4

0 2 1 2 2

12 10 9 7 5

-Nil20 x 2 =40 20x1+10x1 =30 40 x 2 =80 40x2+10x2 =100

45 x 12 45 x 10 45 x 9 45 x 7 45 x 5

540 490 475 460 475

30