Rift Valley University Bishoftu Campus

Department of Business Management

Reading Material Prepared for Operations Research
(Tutorial Class for National Exit Exam)
By: Mekonnen Sorsa (MBA)
 CHAPTER 5: NETWORK MODELS
5.1. Definition and properties of network
A network is diagrammatical representation of logically
and sequentially connected activities using arrows and
nodes or events.
What is a project network? A project network is a graph
that shows the activities, duration, and interdependencies
of tasks within the project
A complete network diagram should have one start
point and one finish point
The flow of the diagram should be from left to right.
5.2. Important terminologies in net work
1.Event: is a specific point which marks the start and the end of an activity and
event is represented by circle and it does not consume resource

When the event is written at the tail end of an arrow, it

is known as tail event. If event is written on the head side of the arrow it is
known as head event
2.Branches/Arrow: Paths connecting two nodes, representing an activity.

3. Activity: Tasks or jobs which are interrelated, to be performed by consuming

time and other resources for their accomplishments.

An activity is denoted by letters A, B, C, etc. which is marked often above the
arrow and estimated time to accomplish the activity is written below the arrow.
4. Dummy activity: An imaginary activity that does not
consume any time and resources is known as a Dummy
activity.
Dummy activities are denoted by the Dotted line.
The main function of dummy activity is representing a
connection between events to maintain the sequence
logically
When two activities start at the same event and end at
the same event, they should be shown by means of a
dummy activity
Types of activities in network
a). Predecessor activity: Activities that must be completed before starting
another activity

b). Concurrent activities: Activities that can be accomplished together

c). Critical activities: Are those activities which if they consume more than their
estimated time, the project will be delayed

A critical activity in a network diagram is denoted by a thick arrow to

distinguish it from a non-critical activity.

4. Critical path (CP): Critical path is the longest path in the network diagram
which is formed by critical activities.

The significance of CP, activities that appear on it cannot be delayed

without delaying the project.
5.3.Network analysis (project scheduling techniques)
A project schedule network diagram visualizes the sequential and logical
relationship between tasks in a project setting.
 This visualization relies on the clear expression of the chronology of tasks and
events.
Most often, a project network diagram is depicted as a chart with a series of
boxes and arrows.
This network diagram tool is used to map out the schedule and work sequence
for the project, as well as track its progress through each stage — up to and
including completion.
Because it encompasses the large tasks that need to occur over the project’s
duration, a network diagram is also useful in illustrating the scope of the project

It is a technique involving presentation of activities in diagrammatic form and

evaluation of efficient scheduling of activities and resources utilization like time
 The common network analysis types include
1. Critical Path Method (CPM)
Applied for simple or non-complex projects
Applied when project manager is familiar with each
activities
Time estimation is deterministic (Sufficient confidence)
2. Project (program) valuation and Review Technique (PERT)
Applied for relatively complex projects such
as research activities
Applied when project manager is not
familiar with activities
Time estimation for each activity is based on
probabilistic
PERT CPM
 It is Event oriented technique :while  It is Activity oriented
discussing about PERT network, we say technique :While discussing CPM
that Activity 1-2, Activity 2-3 and so network, we say that Activity A
on. Or event 2 occurs after event 1 and follows
event 5 occurs after event 3 activity B and activity C follows
and so on. activity B and so on
 CPM manages the predictable
 PERT manages unpredictable activities
activities
 It is focused on time control  It is focused on cost optimization
 It is suitable for repetitive projects
 It is suitable for non-repetitive projects like building construction, road,
infrastructure, maintenance work
 It was developed in 1958.  It was developed in 1957.
 It is a three-time estimate  It is single time estimates W2
 It is a probability model.  It is a deterministic model
 It does not apply to the crashing
 It applies to the crashing concept.
concept
5.3.1. CRITICAL PATH METHOD (CPM)
Steps to be followed for CPM analysis:
1. Activity identification and sequencing
2. Network Construction (Diagrammatical)
3. Determination of the Critical Path
4. Calculations of ES, EF, LS, LF and slack time for each activities

 ES - Earliest start time: Earliest time at which an activity can be started

 EF - Earliest finish time: Earliest time at which an activity can be completed

 LS - Latest start time: Latest time at which an activity can be started

 LF - Latest finish time: Latest time at which the activity can be completed without delaying
the project.
Example 1. Based on the following given activities, predecessors and time in
weeks
a). Draw net work diagram b). Identify critical path c). Identify critical activities
d). Compute minimum completion time of the project e). Compute ES, EF for each
activity f). Compute LS, LF and Slack time for each activity

Activity Immediate Completion

predecessors Time
(week)
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
Total
time=51 weeks
Total time required to complete activities is 51 weeks. However, we can see
from the network that several of the activities can be conducted simultaneously
(for example A and B).
a. Draw Network diagram
b. Identify critical path: NB. Critical path is the longest path in the network
diagram

1.A-D-G-I=5+3+14+2=24
2. A-E-F-G-I=5+1+4+14+2=26………..critical path (Represented by tick arrow)
3. A-C-H-I=5+4+12+2=23
4. B-H-I=6+12+2=20
c). Identify critical activities:
Activities on critical path (A, E, F, G and I are critical activities)
d). Minimum time to complete the project=critical path time=26 weeks
e) Compute ES, and EF for each activity
ES = Largest EF of immediate predecessors
EF= ES+t
f). LS and LF time for each activity
To find LS and LF time for each activity, we need a backward pass
calculation.
LS=LS of its successor minus time estimate of the activity
LF=LS of its successor activity

LS=LF-t LF=LS+t LS=LF-t LF=LS+t

1.LS(I)=26-2=24 1.LF(I)=24+2=26 6.LS(D)=LS(G)-3, 10-3=7 7+3=10
2. LS(H)=LS(I)-12, 24-12=12 2.LF(H)=12+12=24 7.LS(C)=LS(H)-4, 12-4=8 8+4=12
3.LS(G)=LS(I)-14, 24-14=10 3.LF(G)=10+14=24 8.LS(B)=LS(H)-6, 12-6=6 6+6=12
4.LS(F)=LS(G)-4, 10-4= 6 4.LF(F)=6+4=10 9.LS(A)=LS(E)-5, 5-5=0 0+5=5
5.LS(E)=LS(F)-1, 6-1=5 5. LF(E)=5+1=6
f). Compute Slack/float time
Slack time is the length of time an activity can be delayed without affecting the
completion date for the entire project (Slack=LS-ES or LF-EF)
The slack of critical activities are always zero

Activity Earliest Latest Earliest Latest finish Slack Critical

start (ES) start (LS) finish (EF) (LF) (LS-ES) path
A 0 0 5 5 0 Yes
B 0 6 6 12 6 No
C 5 8 9 12 3 No
D 5 7 8 10 2 No

E 5 5 6 6 0 Yes

F 6 6 10 10 0 Yes

G 10 10 24 24 0 Yes

H 9 12 21 24 3 No

I 24 24 26 26 0 Yes
5.4.2. PROGRAM EVALUATION AND REVIEW TECHNIQUE (PERT)
In the case of CPM activity times can be estimated with relative certainty, confidence
For many situations this is not possible, e.g Research and development, new products, complex
projects etc.
3 different time estimates
Optimistic time estimate O……………consider ideal condition
Most likely time estimate M and ………mostly nearest to actual requirement
Pessimistic time estimate P………..if condition goes wrong
Expected time estimate for each activity is calculated as: (Te) = (O + 4m + P) /6

Activit Predeces Optimisti Most Pessimis Expected time

y sor c (to) likely tic (tp) Te = O +4M+P
activity (tm) 6
A - 2 3 10 4 =(2+4X3+10) /6
B - 2 3 4 3 =(2+4X3+4)/6
C A 1 2 3 2= (1+4 X2+3)/6
D A 4 6 14 7= (4+4X6+14)/6
E B 4 5 12 6= (4+4X5+12)/6
F C 3 4 5 4= (3+4X4+5)/6
G D,E 1 1 7 2= (1+4X1+7)/6
Example 2. For the given activities
determine:

1. Critical path using PERT

2. Calculate variance and standard

deviation for each activity

3. Calculate the probability of completing

the project in 26 days
 Here the time for completion of activities are
probabilistic.
 So, using given values of time we will find the expected
time to completion the activities and variance.
 Now based on estimate time, we calculate the EST,
EFT, LST and LFT for each activity to find out
critical path of project as shown below.

 Here the critical path is along the activities 1-2, 2-4,

4-6. So the critical path is 1-2-4-6. ∴ The critical path
= 1-2-4-6 with time duration of 24 days
 A PERT analysis is used to determine the probability of your project being
completed on time. To conduct a PERT analysis, use standard deviation to
determine the amount of variation in your data.
 Here standard deviation is calculated for activities of critical path.
SD=Square root of variances of critical activities

 Now the probability of completion of project in that given time (t) of 26 days,
can be calculate by below formula,

 Using table in Appendix-B, we get probability =77.8%

 As we have
value of
Z=0.7682 now
you can see in
table we have
Z=0.76 which
has ψ(z)=0.7764
and Z=0.77 has
ψ(z)=0.7794 we
take average of
both we get
ψ(z)=0.7779=77.
8%