CHAPTER SEVEN

PROJECT NETWORK ANALYSIS

7.1. Project Management and Network Analysis: Introduction

• All organizations have ongoing activities, and they have projects.

• The distinction is that a project has a beginning, an end, and one
or more well-defined goals.
• The project could be:
– the development of a software program,
– the building of a house or an office building,
– the development of a new drug,
– a marketing campaign for new products, and many others.
 Cont…

• The large and complex projects of any organization involve a

number of interrelated activities performed independently,
simultaneously, or one after the other.
• A network models approach is designed to solve the problem
associated with:
– the allocation of scarce resources of manpower, material, money
and time to these interrelated activities.
• For network analysis to be of use, the project must be capable
of being split into a number of discrete activities
• These activities should relate together in a logical and well-
defined manner.
 Cont…

• Network analysis involves the breaking down of a project into

its constituent activities, and the presentation of these activities
in diagrammatic form.
• Networks are important devices for managerial decision
making.
• Network models consist of a set of circles (nodes), and lines
(branches) which connect nodes each other.
2 5

1 6

3 4 A network diagram with:

6 nodes and 8 branches.
Network components and Precedence Relationship

• Some of the common terms in networks are defined below.

1. Activity
• It is a physically identifiable part of a project which consumes time
and resources.
• There are three types of activities in a network model:
– Predecessor activity: an activity that must be completed
immediately prior to the start of another activity.
– Successor activity: an activity that cannot be started until one or
more preceding activities are completed
– Concurrent activities: activities which can be accomplished
simultaneously.
 Dummy activities: activities that consume no resources
 Cont…

2. Event
• In AOA convention, the beginning and end points of an
activity are called events or nodes.
• Event is a point in the time and does not consume any
resource.  
Activity
1 2

3. Path
• Path is unbroken chain of activity arrows connecting the initial
event to some other event.
• It is a sequence of activities that leads from the starting node
to the finishing node.
 Cont…

4. Network
• It is the graphical representation of logically and sequentially
connected arrows and nodes representing activities and events
of a project.
• The network diagram describes sequential relationships
among major activities on a project.
• The length (of time) of any path can be determined by
summing the expected times of the activities on that path.
• The path with the longest time is of particular interest
because it governs project completion time.
Expected project duration = the expected time of the longest path
 Cont…

• Moreover, if there is any delay along the longest path, there

will be corresponding delay in project completion time.
• Conversely, attempts to shorten project completion must focus
on the longest sequence of activities.
• Because of its influence on project completion time, the longest
path is called the Critical Path,
• Activities in the critical path are referred to as Critical Activities.
• Delay in the paths that are shorter than the critical path will not
affect the overall project completion time.
 Cont…

• The allowable delay for any path is called the Path Slack.
• It reflects the difference between the length of a given path
and the length of the critical path.
• The critical path, then, has zero slack time.
 Conventions for drawing networks:
• Two conventions for constructing the network diagrams:
– Activity- on-Arrow (A-O-A): the arrows are used to designate
activities.
– Activity – on- Node (A-O-N): the nodes are used to designate
activities.
Example of a Network diagram (A-O-A)

• A simple project network diagram

Example of a construction Project (A-O-N)

Activity List & precedence relationship Arrow Diagram

 

EXAMPLES OF THE USE OF DUMMYACTIVITY

Network concurrent activities

a a 2

2
1 1
Dummy
b b 3
WRONG!!!
RIGHT 

Activity c not required for e

WRONG !
a
a e
d
1

b 1 b
e
d

c
2

c
WRONG!!!
RIGHT 

RIGHT 

12
 CPM and PERT

• There are two closely related quantitative techniques used to

manage complex projects.
1. PERT (Program Evaluation and Review Technique) and
2. CPM (Critical Path Method)
• PERT and CPM were independently developed in the late 1950s.

They both enable managers to get:

•a graphical display of project activities.
•an estimate of how long the project will take.
•an indication of most critical activities to timely completion of project.
•An indication of how long any activity can be delayed without
lengthening the project completion.
 Cont…

• The main difference between PERT and CPM is that:

CPM was developed for projects with a set of commonly
performed tasks, where the task times are fairly well known.
• In contrast,
PERT was developed for projects with tasks where scientists had
little experience and could not estimate their times with much
certainty.

• In short, the CPM model does not include uncertainty in task

times, but the PERT model do.
History

CPM was developed by Du Pont and the emphasis was on the trade-
off between the cost of the project and its overall completion time
(e.g. for certain activities it may be possible to decrease their
completion times by spending more money - how does this affect the
overall completion time of the project?)

PERT was developed by the US Navy for the planning and control of
the Polaris missile program and the emphasis was on completing
the program in the shortest possible time. In addition PERT had the
ability to cope with uncertain activity completion times (e.g. for a
particular activity the most likely completion time is 4 weeks but it
could be anywhere between 3 weeks and 8 weeks).
1. Critical Path Method (CPM)

• CPM is a diagrammatic representation which shows the

various activities in a project where the activity time
estimates can be predicted with considerable certainty
– Single estimate of activity time
– Deterministic activity times
• Aim:
– to show the critical path where a delay will result in the
overall project being delayed.
• An activity is said to be critical if a delay in its start will cause
a further delay in the completion of the entire project.
Activity Slack (Float)

 Each event has two important times associated with it :

- Earliest time (Et): which is a calendar time when a event can
occur when all the predecessor events completed at the
earliest possible times
- Latest time (Lt): which is the latest time the event can occur
with out delaying the subsequent events and completion of
project.
• Difference between the latest time and the earliest time of
an event is the slack time (Float) for that event
• Positive slack : Slack is the amount of time an event can be
delayed without delaying the project completion
Procedure of Determining the Critical Path

• Step 1. List all activities and draw the network diagram.

• Step2. Indicate the normal time (tij) for each activity (i,j) above
the arrow which is deterministic.
• Step 3. Calculate the earliest start, the earliest finish, the latest
finish and latest start times for each event.
• Step 4. Determine the total float for each activity by taking the
difference between the earliest start and the latest start time.
• Step 5. Identify the critical activities and connect them by
double line arrows.
• Step 6. Calculate the project duration.
Determining Activity Float Time

 Forward pass Procedure

• For each activity i beginning at the Start node, compute:
• Earliest Start Time (ES): the maximum of the earliest finish
times of all activities immediately preceding activity i.
– This is the earliest time an activity can begin without
violation of immediate predecessor requirements.
– It is 0 for an activity with no predecessors.
• Earliest Finish Time (EF): Earliest Start Time + Time to complete
activity i.
– This represent the earliest time at which an activity can end.
 Cont…

• The project completion time is the maximum of the Earliest Finish

Times at the Finish node.
 Backward pass Procedure
• Assuming that each activity ends at node j, compute the following for
each of these activities, (i,j):
• Latest Finish Time (LF): the minimum of the latest start times beginning
at node j.
– This is the latest time an activity can end without delaying the entire
project.
• Latest Start Time (LS): Latest Finish Time-Time to complete activity (i,j).
– This is the latest time an activity can begin without delaying the entire
project.
 Cont…

 Slack (Float) = (Latest Start) - (Earliest Start), or

= (Latest Finish) - (Earliest Finish).
• A critical path is a path of activities, from the Start node to
the Finish node, with 0 slack times.
Example (A-O-A)

• A small maintenance project consists of the following jobs

whose precedence relationship is given below.
Jobs 1-2 1-3 2-3 2-5 3-4 3-6 4-5 4-6 5-6 6-7
Duration (days) 15 15 3 5 8 12 1 14 3 14

• Required
a. Draw an arrow diagram representing the project.
b. Find the total float for each activity.
c. Find the critical path and the total project duration.
Solution

a. Arrow diagram (A-O-A)

5
2 5

15

1
Start
End
1 3 4 3
15 8 7
14
14
12
3 6
The Easy Way to Identify the Critical Path

• The paths of the entire network are:

Path 1: 1 – 2 –5 -6 -7=> 37 days

Path 2: 1 – 2 – 3– 4 – 5 – 6 – 7 => 44 days
Path: 1 – 2 – 3– 4 – 6 – 7 => 54 days - Critical Path Length
Path: 1 – 2 – 3– 5 – 6 – 7 => 44 days
Path: 1 – 3 – 4– 5 – 6 – 7 => 41 days
Path: 1 – 3 – 4 – 6 – 7 => 51 days
Path: 1 – 3 –6 – 7 => 41 days
¶ Critical Path: 1 – 2 – 3– 4 – 6 – 7
¶ Critical activities: 1-2, 2-3,3-4,4-6, 6-7
 Cont…

Revised Arrow diagram indicating the critical path

5
2 5

1
Start
15 End
1 3 4 3
15 8 7
14
14
12
3 6

NB: The critical path is indicated in double line

 Forward pass calculation

ESi= Max (ESj, ti-j),

Where: Esi is the earliest time and
tij is the normal time for the activity (i,j).
ES1=0
ES2= ES1 + t1-2= 0 + 15= 15
ES3= Max (ES2 + t2-3, Es1 + t1-3)
=Max (15 +3, 0+15) = 18
ES4= ES3+ t3-4 = 18+8 = 26
ES5 = Max (ES2 + t2-5, ES4 + t4-5)
= Max (15 +5, 26+1) = 27
ES6 = Max (ES3+t3-6, ES4+ t4-6, ES5+t5-6)
= Max (18+12, 26+14, 27+3) = 40
ES7 = ES6 + t6-7 = 40 +14 = 54
Backward pass calculation

LFi = Min ( LFj-ti-j) where LFj is the latest finish time for the event j.
LF7 = 54
LF6 = LF7 = t6-7 = 54-14 = 40
LF5 = LS6-t5-6= 40-3 = 37
LF4 = Min (LF5-t4-5, LF6-t4-6)
= Min (37-1, 40-14) = 26
LF3 = Min (LF4-t3-4, LF6-t3-5)
= Min (26-8, 40-12) = 18
LF2 = Min (LF5 - t2-5, LF3-t2-3)
= Min (37-5, 18-3) = 15
LF1 = Min (LF3-t1-3, LF2-t1-2)
= Min (18-15, 15-15) = 0
b) Total float for Each Activity

• The following table gives the summarized calculation for critical

path and total float.
Earliest Latest
Normal Start Finish Start Finish Total float LFj-ESj
Activity
time or LFi-ESi
ESi ESj LFi LFj

1-2 15 0 15 0 15 0
1-3 15 0 15 3 18 3
2-3 3 15 18 15 18 0
2-5 5 15 20 32 37 17
3-4 8 18 26 18 26 0
3-6 12 18 30 28 40 10
4-5 1 26 27 36 37 10
4-6 14 26 40 26 40 0
5-6 3 27 30 37 40 10
6-7 14 40 54 40 54 0
c) Critical path and the total project duration

• We can determine the following based on the

information obtained above.
– Activities 1-2, 2-3, 3-4, 4-6, 6-7 are the critical
activities.
– The critical path is given by, 1-2-3-4-6-7
– The total project completion time (duration) is
given by 54 days.
Example 2: Using A-O-N Convention

• XYZ co. is about to introduce a new product. A list of activities

and their predecessors and of the duration of each activity is
given in the following table.
Immediate
Activity Predecessors Duration (in Weeks)
A — 5
B — 6
C A 4
D A 3
E A 1
F E 4
G D,F 14
H B,C 12
I G,H 2
 Cont…

Required?
a. Draw a project diagram for this project.
b. Find the total float for each activity.
c. Find the critical path and the total project duration.
Solution
a.Network Diagram
6 12

B 4 H 2
C I
5 3 14
A D G
1 4
E F
An alternative way of computing activity float

b. ES, EF, LS and LF times ES Normal

time
EF

LS Float LF
0 6 6 9 12 21
6 6 12 12 3 24
5 4 9 24 2 26
B 8 3 12 H 24 0 26

C I
0 5 5 10 14 24
5 3 8
0 0 5 10 0 24
7 2 10
A D G
6 4 10
5 1 6
6 0 10
5 0 6
E F
 Cont…

• Activity float, critical path and expected duration summary

Activity Duration ES EF LS LF Float

A 5 0 5 0 5 0
B 6 0 6 2 8 2
C 4 5 9 8 12 3
D 3 5 8 7 10 2
E 1 5 6 5 6 0
F 4 6 10 6 10 0
G 14 10 24 10 24 0
H 12 9 21 12 24 3
2 24
I path: A—E—F—G—I 26
Expected duration26
24 0
= 26 weeks
Critical
2. Project Evaluation and Review Technique (PERT)

• PERT is a time-oriented technique designated to cater for

projects where it is not possible to estimate the exact
duration of the activity.
• It uses statistical theory to estimate:
– how long a project is likely to last, and
– the probability of completing the project by a particular
date.
• It helps to address situations which require a probabilistic
approach.
• It is most often used in project management for non-repetitive
jobs where the time and cost estimates are quite uncertain.
 Cont…

• The probabilistic approach involves three times estimates for each

activity instead of one:
1. Optimistic time:- The length of time required under optimum
conditions. It is represented by the letter “a”.
• It is the shortest time
2. Pessimistic time:- The amount of time that will be required
under the worst conditions. It is represented by the letter “b”.
• It is the longest time
3. Most-likely time:- The most probable amount of time
required. It is represented by the letter “m”.
Cont…
 Cont…

• Hence, the expected time is computed as a weighted average

of the three time estimates:

• The standard deviation of each activity’s time is estimated as

one-sixth of the difference between the pessimistic and
optimistic time estimates.
• The variance if found by squaring the standard deviation.
 Cont…

• The size of the variance shows the degree of uncertainly

associated with an activity’s time;
– The larger the variance the greater the uncertainty.
• In network analysis, it is also desirable to determine the
standard deviation of the expected time for each path.
• This can be done by adding the variances of the activities on
a path, and, then, taking the square root of that number.
 Example

• A company has decided to redesign its electronic components. The activities

involved in the project, their relationship and three time estimates for
each activity is provided in the following table. Activity times are in weeks.

Activity Optimistic time Most likely time Pessimistic time

1-2 3 5 7
2-3 4 8 12
3-4 2 4 6
3-5 3 6 9
3-6 3 6 9
4-5 2 4 6
4-6 1 3 6
5-6 2 5 8
6-7 2 5 14
7-8 4 7 10
 Cont…

• Given the above information, compute the following:

a. Find the expected duration and variance of each activity
b. Find the expected duration of the project.
c. Calculate the variance and standard deviation of project
length
d. What is the probability that the project will be completed:
• at least 4 days earlier than expected?
• no more than 4 days later than expected?
e. If the project due date is 41 days what is the probability of
meeting the due date.
Solution

a. Expected duration and variance of each activity

Cont…
 Cont…

• Project variance and standard deviation summary

To assist our calculations, let us approximate the values as:

Variance = 9 and standard deviation = 3.
 Cont…

 Solution for questions d) and e)

• To respond to questions (d) and (e), the application of
Poisson probability distribution is mandatory.
• Thus;

• In other words,
 Cont…

 So, p (Z<-1.33)
= p(X< 35)
= 0.0918
= 9.18%
 Cont…

• Thus, P (X<43) is: p (Z<1.33)

= p(X< 43)
= 0.9082
= 90.82%
e) The probability of meeting the due date if the project due
date is 41 days is;
Project Crashing

Reading Assignment
48