Unit vi

UNIT - VI

PROJECT MANAGEMENT

What is a project?

“A project is a series of activities or
tasks or operations directed to
accomplishment of a desired objective.”

“A project is a temporary endeavour
undertaken to create a "unique" product or
service.”

HRM In A Dynamic Environment

earLY techNiQUes oF project
MaNaGeMeNt

1. Gantt’s Bar Chart
2. Milestone Chart


NetWorK aNaLYsis

Network Analysis refers to a number of techniques
for the planning and control of complex projects.

The two most frequently used forms of network planning
are:
1. Programme Evaluation and Review Technique (PERT)
2. Critical Path Method (CPM)


What is a NetWorK?

A network is a graphical diagram
consisting of certain configuration of
“Arrows” (²) and “Nodes” (( ) for showing
the logical sequence of various tasks to be
performed to achieve the project
objective.


pert / cpM
techNiQUes
The initial step in PERT/CPM project
scheduling process is the determination of
all specific activities that comprise the
project and their relationships.


eXaMpLe

Activity Description Duration (in Immediate
weeks) predecessor
A Obtain the budget 2 -
approval
B Obtain the machine 5 A
C Hire the operator 1 A
D Install the machine 1 B
E Train the operator 6 C
F Produce the goods 1 D,E


terMs UseD iN a NetWorK

n Activity: An effort that is required to complete a
part of the project. It is represented by “²”.

2. Node: It represents the beginning or completion of
an activity. It is represented by “a”


rULes oF NetWorK coNstrUctioN

1. Each defined activity is represented by one and only one arrow
in the network.

2. Before an activity can be undertaken, all activities preceding it
must be completed.

3. The arrows depicting various activities are indicative of logical
procedure only. The length and bearing of the arrows are of no
significance.


rULes oF NetWorK
coNstrUctioN
1. The arrow direction indicates the general progression in time.
Head events and Tail events.

3. When a number of activities terminate at one event, it
indicates that no activity emanating from that event may start
unless all activities terminating there have been completed.

5. Events are identified by numbers.

7. The activities are identified by the numbers of their starting
and ending events or by alphabets.


rULes oF NetWorK coNstrUctioN

1. A network should have only one initial and terminal
node.

A
3.
C Merge Event

B

B
A Burst Event

C


rULes oF NetWorK
coNstrUctioN
10. Parallel activities between two events, without intervening
events, are prohibited. When two or more parallel
activities in a project have the same head and tail events,
dummy activities are needed in constructing the network.

Dummy activities do not consume time or
resources. An efficient network contains a minimum
number of dummy activities required to portray the
correct precedence relationships.

11. Looping is not permitted in a network.


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Network analysis

 It is a Planning project Management
 It means construction of Variances
 It is process Technique
 It is outsourcing analysis


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What is Network

 Network analysis is a system which plans projects both large
and small by analyzing the project activities
 Projects are broken down to individual tasks or activities,
which are arranged in logical sequential order
 A network diagram is constructed which presents the

Relationship b/w all the activities are involved


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Meaning and Definition

According to author – “Network analysis helps to designing,
Planning, Coordinating and decision making in order to accomplish
the project economically in the minimum available time with the
limited available resources.”


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Techniques of Network

 PERT
CPM
RAMS
DEP
COPAC
MAP Project analysis

RPSM
LCS
MOSS
PCS
GERT

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Key concepts of Network

 Activity
 Event
 Predecessor Event
 Successor Event
 Net work
 Dummy activity
 Construction of Project
network


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ACTIVITY

Activity means a work. A project consists of several
activities. An activity takes time. It is represented by an
arrow in a diagram of the network. Eg. An activity in house
construction can be flooring.

Flooring


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Event

It is the beginning or the End of an activity. Events
are represented by circles in a project network diagram.
The events in a network are called the nodes.

Start Stop

Punching


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Predecessor Event

The event just before another event is called the
predecessor event


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Successor Event

The event just following another event is called the
successor event

3

1 2 4 6

5


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Successor Event

In this diagrams
Event 1 is predecessor for the event 2
Event 2 is successor to event 1
Event 2 is predecessor for the events 3,4 and 5
Event 4 is predecessor for the event 6
Event 6 is successor to events 3, 4 and 5


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Network

 A network is series of related activities and events which
result in an end product or service.
 The activities shall follow a prescribed sequence.
 It is construction area of network path


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Dummy activity

 A dummy activity is an activity which does not consume any
time.
 sometimes it may be necessary to introduce a dummy
activity in order to provide connectivity to a network only.


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Construction of a project network

 A project network consists of a finite number of events and
activity by adhering to a certain sequential order.
 It is a path way of network


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Problem 1

Construct the network diagram for a project with the following activities

Activity Number of Predecessor
Event-Event Activity Activity
1-2 A -
1-3 B -
1-4 C -
2-5 D A
3-6 E B
4-6 F C
5-6 G D


3-2
Solution

2
A
B
1 3

C 4


3-2
Solution

A D
1 2 5


3-2
Solution

B E
1 3 6


3-2
Solution

G G
2 5 6


3-2
Solution

5
G

E
3
6

4 F


3-2
Solution

2
D
5
A G
B E
1 3 6

C 4 F


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CRITICAL PATH METHOD (CPM)

The critical path method (CPM) aims at the
determination of the time to complete a project and the
important activities on which a manager shall focus attention.


3-2
Problem 1
The following details are available reading a project
Activity Predecessor Duration
Event-Event Activity (Weeks)
A - 3
B A 5
C A 7
D B 10
E C 5
F D,E 4

First let us construct the network diagram for the given
project. We mark the time estimates along the arrows
representing the activities


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Solution

Start Event 3 D End Event
B
A 5 10
1 2 F
5 6
3 C E 4

7 4
5


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Solution

Path I

A B D F
1 2 3 5 6
3 5 10 4

with a time of 3+5+10+4 =22 weeks


3-2
Solution

Path II

A C E F
1 2 4 5 6
3 7 5 4

with a time of 3+7+5+4 =19 weeks


3-2
Solution

Compare the times for the two paths. Maximum of {22,19} =
22. we see that path I has maximum time of 22 weeks. The
critical activities are A,B,C,D and F, finally the project
completion time is 22 weeks.


3-2
Problem 2

Find out the completion time and the critical activities for the following
project.
D 5
2
20 G 8
A
8
K 6
1 B 3 E 6 H 11 8 10
10 16
I L
C 5
F J 9
7 4 7
25 10


3-2
Problem 3
Draw a network diagram and determine the critical path for the
following project.
Activity Duration
Event-Event (Weeks)
1-2 5
1-3 6
1-4 3
2-5 5
3-6 7
3-7 10
4-7 4
5-8 2
6-8 5
7-9 6
8-9 4


3-2
Solution

We have the following network diagram for the project.

5
D
2 H
A 5 2
5 I
1 B 3 E 6 8 K
6 7 5 9
4
C
3 F 10 J
4 G
7 6
4


3-2
Problem 4
The following details are available reading a project

Activity Predecessor Time estimates
Activity (Weeks)
A - 4
B - 7
C - 3
D A 6
E B 4
F B 7
G C 6
H E 10
I D 3
J F,G 4
K H,I 2

Draw a project network diagram


3-2
PERT analysis

INTRODUCTION

Programme Evaluation and Review Technique (PERT) is a tool
that would help a project manager in project planning and control. It
would enable him in continuously monitoring a project and taking
corrective measures wherever necessary. This technique involves
statistical methods.


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PERT analysis

The PERT analysis includes 3 Aspects
3. Pessimistic time estimate (tp)
4. Optimistic time estimate (to)
5. Most likely time estimate (tm)

Formulae te = to + 4tm + tp
6


3-2
Problem 1

Predecessor Optimistic Time Most likely time Pessimistic time
Activity
Activity estimate (to days) estimate (tm days) estimate (tp days)

A - 2 4 6

B A 3 6 9

C A 8 10 12

D B 9 12 15

E C 8 9 10

F D,E 16 21 26

G D,E 19 22 25

H F 2 5 8

I G 1 3 5


3-2
Solution

From the three time estimates tp, tm, to calculate te for each activity.

4 *Most likely time Pessimistic time Time estimate
Optimistic Time
Activity estimate (tm days) estimate (tp to + 4tm +tp Te = to+4tm+tp
estimate (to days)
days) 6

A 2 16 6 24 4
B 3 24 9 36 6

C 8 40 12 60 10

D 9 48 15 72 12
E 8 36 10 54 9
F 16 84 26 126 21
G 19 88 25 132 22
H 2 20 8 30 5
I 1 12 5 18 3


3-2
Solution (contd..)

3 D 6 H
F
B
A 12 21 5
1 2 6 5 8
4 22 3
10 9
E G 7
C 4 I


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Path I

A B D F H
1 2 3 5 6 8
4 6 12 21 5

Time for the path : 4+6+12+21+5=48 days


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Path II

A B D G I
1 2 3 5 7 8
4 6 12 6 3



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Path III

A C E F H
1 2 4 5 6 8
4 10 9 21 5



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Path IV

A C E G I
1 2 4 5 7 8
4 10 9 6 3



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Final

Compare the times for the four paths.
Maximum of { 48,31,49,32} = 49


3-2
Problem 2

Optimistic Time Most likely time Pessimistic time
Activity estimate (to days) estimate (tm days) estimate (tp days)

1-2 3 6 9
1-6 2 5 8
2-3 6 12 18
2-4 4 5 6
3-5 8 11 14
4-5 3 7 11
6-7 3 9 15
5-8 2 4 6
7-8 8 16 18


3-2
Solution


Optimistic Time
estimate (tm days) estimate (tp to + 4tm +tp Te = to+4tm+tp
estimate (to days)
days) 6
Activity

1-2 3 24 9 36 6
1-6 2 20 8 30 5
2-3 6 48 18 72 12
2-4 4 20 6 30 5
3-5 8 44 14 66 11
4-5 3 28 11 42 7
6-7 3 36 15 54 9
5-8 2 16 6 24 4
7-8 8 64 18 90 15


3-2
Solution (contd..)

3 F
C

12 11
2 5 I
A 5 7
6 D 4
4 G
1 8
5
15
B
E H
6 7
9


3-2
Problem 3

Predecessor
Activity estimate (to estimate (tm estimate (tp
Activity
days) days) days)

A - 2 5 8
B A 2 3 4
C A 6 8 10
D A 2 4 6
E B 2 6 10
F C 6 7 8
G D,E,F 6 8 10


3-2
Solution


Optimistic Time
estimate (tm days) estimate (tp to + 4tm +tp Te = to+4tm+tp
estimate (to days)
days) 6
Activity

A 2 20 8 30 5
B 2 12 4 18 3
C 6 32 10 48 8
D 2 16 6 24 4
E 2 24 10 36 6
F 6 28 8 42 7
G 6 32 10 48 8


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Solution (Network)

3

B E
6
3 4
F
C 7

8
A D G
1 2 5 6
5 4 8


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Problem 4

Predecessor
Activity
days) days) days)

A - 12 14 22
B - 16 17 24
C A 14 15 16
D A 13 18 23
E B 16 18 20
F D,E 13 14 21
G C,F 6 8 10


3-2
Problem 5

Predecessor
Activity
days) days) days)

A - 2 4 6
B - 3 5 7
C A 5 6 13
D A 4 8 12
E B,C 5 6 13
F D,E 6 8 14


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INTRODUCTION TO PROJECT CRASHING

1.The process of shortening the time to complete a project is called crashing
and is usually achieved by putting into service additional labor or machines
to one activity or more activities.

2. Crashing involves more costs. A project manager would like to speed up a
project by spending as minimum extra cost as possible.


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STEPS IN PROJECT CRASHING

Step:1
Find the critical path with the normal times and normal costs for the activities and
identify the critical activities.
Step:2
Find out the crash cost per unit time for each activity in the network. This is calculated
by means of the following formulae

Activity Cost

Crash Time & Cost
Crash Time

Normal Time Normal Time & Cost

Activity Time
Crash Time Normal Time


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STEPS IN PROJECT CRASHING

Crash cost/Time period = Crash cost-Normal cost/Normal time-Crash time
Step:3
Select an activity for crashing


Unit vi

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