The Lesson 7

Network Analysis for project Management

Introduction
The purpose of lesson six is to study how network techniques could use for project
planning, monitoring and management. The session will explain basic characteristics
of network analysis and main network analytical tools such as Project Evaluation
and Review Techniques (PERT) and Critical Path Analysis (CPA) methods.

Due to some limitations of using Gantt charts in project scheduling i.e. not indicate
inter relationships between project tasks/activities and impacts of delaying tasks or
of shifting resources, network analysis is used as planning technique for project
management.

7.1 Objectives of Network Analysis

Network analysis is used to serve several objectives (Sharma, A. K. 2006).

1. Minimization of total time

2. Minimization of total costs
3. Minimization of cost for a given total time
4. Minimization of time for a given cost
5. Minimization of idle resources

7.2 Diagrams and Networks

Three main diagramming methods are used in project planning and management
(Nicholas, J. M, 2001).

1. Precedence Diagramming Method (PDM)

2. Program Evaluation and Review Techniques (PERT)

3. Critical Path Method (CPM)

7.2.1 Precedence Diagramming Method
PDM shows the logical relationship of major elements of work package (tasks) to
be performed as “precedence” or to be completed before others as predecessor. It is
also important to distinguish what activities are the successors and do at the same
time. For example if we assess the activities of a person who wake up in the morning
and getting ready for work, sequence of his activities could list as prior activities
to be performed to do next activities. Thus considering immediate Precedence of
work and time spent for each activity, whole process can present orderly as shown
in table 7.1.

Table 7.1: Activities and Immediate Precedence

Activity Immediate Precedence Duration (seconds)

A. Get undressed - 60
B. Take shower A 600
C. Put on underwear B 40
D. Dry, brush hair B 350
E. Put on shirt C 150
F. Put on pants C 60
G. Put on shocks C 45
H. Put on tie E 180
I. Put on shoves F,G 100
J. Put on jacket H, I, D 15

Quoted from Nicholas, J. M. (2001)

Logic diagram on the above activities and immediate precedence is presented in

diagram 7.1.
Dig 7.1: Logic Diagram

E H
150 180

Wake up A B C F I J
60 600 40 60 100 15

G
45
D
350

Activity on Nodes Diagrams

Network diagrams are used to present the sequence of activities and events
associated with the project. According to nodes diagrams method, nodes (circles)
are used to represent activities and the events represent as an instant in time signifies
as start and finish of activity. (Dig. 7.2). Thus activity is a work task to be
implemented. It can be a part of WBS, cluster of work package or individual job that
execute with resources and time. Event is an instant in time indicate start and finish.

Dig. 7.2: Activity on Node

Start take Finish

shower

Activity on Arrow Diagrams (AOA method)

According to AOA method, the activity is represented as directed line segments
that called on arrow or arc between two nodes (circles). As shown in diagram 7.3,
nodes represent the events of start and finish and arrow line indicates the activity
and the time. Note that activity is presented above the line and time is presented
below the line.

Dig. 7.3: Activity on Arrow Diagrams

Construction
B
8 weeks

An Example

Both AON and AOA formats use as activity oriented networks to show (describe)
projects in terms of tasks or jobs in planning and implementation.

If you were given information about the project as shown in table7.2, you can
prepare a network either using AON method or AOA method.

Table 7.2 Activity, Immediate predecessor and Time

Activity Immediate predecessor Time (Days)

A - 06
B A 09
C A 08
D B, C 04
E B, C 06

Dig. 7.4: AON Method D4

B9

Start Finish
A6

E6
C8
Note that AON networks construct without use of dummy and it is easier and
simple to construct. As shown in Dig. 7.4, nodes used to indicate activity and time,
and arrows used to indicate relationship between events and activities.

When use AOA method, node represents events and arrows shows the activity.
Each events were numbered including start and finish (Dig 7.5).

Dig. 7.5: AOA Method

D4
3 5
B
7
1 A 2 9
6
6 8 C 8 4 E

AOA method is used often by project managers because it suit for PERT and CPM
procedures to indicate the relationship of project activities, duration and costs.

7.2 2 Program Evaluation and Review Techniques (PERT)

PERT was developed by U.S. Navy’s Polaris Missile System Program in 1958.
Though initially it was developed for defense projects, now it widely uses as
planning and controlling projects. It emphasis the uncertainty of project finish by
considering variation of project time in terms of three scenarios as follows.

Optimistic Time: Minimum Time required for an activity to complete, the situation
where everything goes well. (See point a in figure 7.1)
Most likely (Normal) Time: It is the normal time to complete the task. It assumes
that no extra time or personnel required. (See point m in figure 7.1)
Pessimistic Time: The maximum time that activity could take. It is the worst time
that could be expected if everything went wrong. (See point b in figure 7.1)
 Fig. 7.1: Probability Distribution of Time

Activity
Optimistic ML Average Pessimistic

a m te b

Probability

3 5 6 13 month (Time)

As shown above Probability Distribution of project time is based on the three

possible scenarios as optimistic, ml and pessimistic time distribution. Thus
expected time (te) and of each activity could be calculated using following
formulas.

te = ta+4tm+ tb

te = expected time
ta = Optimistic time
tm = Most likely time (ML)
tb = Pessimistic time
According to time distribution of fig 6.1, the average or expected time (te)is
= 3+4(5) + 13/6 = 6 days
The Variance also counted as follows;

V = (𝑏 − 𝑎 )2

Thus Variance of above distribution is

V = (13 − 3)2 = (1.67 days)2 = 2.78 days

The following Example indicates details of activities of a construction project. If

the management want to calculate expected time under three possible time
scenarios i.e. optimistic, most likely and pessimistic time, how do you calculate the
expected time for the project?

Table 7.4 Calculate Expected Time

Activity Immediate Optimistic Most likely Pessimistic Expected Time

Predecessor Time (a) Time (m) Time = (b) te = a+4m+ b
6

A - 03 04 05 04
B A 01 02 03 02
C A 02 03 04 03
D C 01 02 03 02
E A 03 05 07 05
F C 04 05 12 05
G B,D 05 04 11 04
H E 92 04 06 04
I F,G 02 03 04 03
J H.I 04 06 08 06

Quoted from Pathirage, J. M. P. (2013)

The network analysis based on the table 7.4 is presented by a diagram below.

Dig. 7.6: Network Analysis

G

4 6
5

B 2 D 2 F 6 3 I
A C J
1 2 3 7 8
4 3 6

E H
5
5 4

7.3 Critical Path Method (CPM)

CPM method was introduced in 1957 by DuPont Company and expanded to include
Remington Rand and Mouchy Associates. The CPM emphasis to minimize the cost
while reducing time period. Thus it concern more on the resource availability to
accompany the project task by managing time and cost (See fig. 7.2).

Fig. 7.2: The relationship of Time and Cost

Cost

Cc=18……………..

cost slope=Cc-Cn

Cn=9 ….………………………… Tc-Tn

Tc=5 Tn=8 Duration (Weeks)

Cn= Normal Cost

Cc = crash cost

Tn = Normal Time

Tc = crash time

According to above equation and the statistics in the figure 7.2, additional cost
requirement (Cc-Cn ) to reduce duration from Tn -Tc ( 8 - 5 weeks) is calculated as
follows.

Cc-Cn / Tn-Tc

= 18- 9 / 8 -5 = 9 / 3

= 3

Critical path
Critical path is the longest path in a network. It is the order of activities or task that
indicate maximum time to complete the project. It is important because it reflects
earliest start time and earliest finish time. So it helps to identify faults of the path
that would affect to delay the project. Therefore, both PERT and CPM methods
count critical path in the network analysis. Four type of durations are considered in
critical path analysis. It includes;

1. Earliest Start Time (EST);

It is the time, which indicates earliest start time of activity without delaying the
total project time

2. Earliest Finish Time (EFT):

It is the time, which indicates earliest finish time of activity without delaying the
total project time

3. Latest Start Time (LST):

The time, which indicates latest start time of activity without delaying the total
project time
4. Latest Finish Time (LFT):

It is the time, which indicates latest finish time of activity without delaying the
total project time

If we consider expected time calculated in table 7.4, EST and EFT for each task
could be calculated as follows;

For activity A, no early start work and therefore EFT is 04 days. For activity B, EST
is 4 because it start after activity and it require 2 days to finish. Thus EFT is 4+2 =6.
The activity C also start after activity A and hence EST is 4 and since activity C
require 3 days, its EFT is 4+3 = 7. Thus EFT for all activities can be calculated by
counting EST and time require for each activity. According to table 7.4 and diagram
7.6, EST for last activity J is 17 days and its EFT is 23 days. It indicates the longest
path of the projected to be completed. EST and EFT is mentioned above the arrow.

Since the last activity and the last event are considered as total time required to
complete project, LST and LFT of each and every activities counted by reducing
required time for each activity from EFT. For instance, EFT of the last activity is
23 and it consider as the LFT. Thus LST for activity J is counted by reducing
required time for activity J as follows (23-6 = 17). Similarly, LST and LFT for each
activity could be calculated. LST and LFT is mentioned below the arrow (Table 7.5).

Counting early and late perspectives indicates clearly critical path. Thus critical and
non-critical activities identify easily by counting slack, which reflects time period
for which an activity can be delayed without causing troubles in completion of
project. It may be positive or negative. When slack become negative it recognize as
critical activity and when it becomes positive it recognize as non-critical activity If
we consider the same example in accordance with slack, the diagram analysis could
be illustrated as follows (See diagram 7.7). The critical path is denoted by double
line or darker to distinguish it from non-critical activities.
Table 7.5: Counting Slack according to Network

Activity EST EFT LST LFT Slack*

A (1-2 ) 0 04 0 04 0
B (2-4) 4 06 07 09 03
C (2-3) 4 07 04 07 0
D (3-4) 7 09 07 09 0
E (2-5) 4 09 08 13 04
F (3-6) 7 13 08 14 1
G (4-6) 9 14 09 14 0
H ( 5-7) 9 13 13 17 04
I ( 6-7) 14 17 14 17 0
J (7-8) 17 23 17 23 0

*Counting slack LST- EST, LFT- EFT

Dig. 7.7: Critical Path Analysis

C (4,7) D(7,9) F(7,13)

3(4,7) 2(7,9) 6(8,14)

A(0,4) B (4,6) G(9,14) I (14,17) ) 7 J (17,23 8

1 2 4 6
4 (0,4) 2 (7,9) 5(9,14 3(14,17 6 (17,23)

E (4,9) H (9,11)

5 (8,13) 4 (13,17)
5

Critical Path 1 A 2 C 3 D 4 G 6 I 7 J 8
4 3 2 5 3 6

= 23 weeks