CH 5
CH 5
CH 5
Unit Five
Net working
Unit Objectives
After completing this chapter you should be able to:
Define what a project is.
Use CPM to evaluate project‟s time
Discuss the use of PERT in solving problems of project
Describe the concept of crashing
5.1. Introduction
It is essential to identify the various activities involved in the execution of Projects. The large
and complex projects of any organization involve a number of interrelated activities, which
might be performed independently, simultaneously, or one after the other. Modern management
has designed a network models approach to solve the problem associated with the allocation of
scarce resources of manpower, material, money and time to these interrelated activities.
A project can be defined as being a series of activities designed to achieve a specific objective,
and which has a definite beginning and a definite end.
Network analysis involves the breaking down of a project into its constituent activities, and the
presentation of these activities in diagrammatic form.
Networks are one of the important tools of management science which easily solve problem by
presenting in visual formats.
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The straight lines connecting the circles represent a task that takes time or resources; these lines
are called activities. The arrow heads show the direction of the activity.
The beginning and end points of an activity are called events or nodes. Event is a point in the
line and does not consume any resource. The head event has always a number higher than the
tail event.
Activity
Tail Head
Merge and burst events
It is not necessary an event to be the ending event of the only one activity but can be the ending
event of two or more activities. Such event is defined as a Merge event.
Merge event
Dummy
A complete network should have only one point of entry -the start event, and one point
of exit -the finish event.
Every activity must have one preceding event -the tail, and one following event - each
activity has one head.
Several activities may use the same tail event, and the same head event, but no two
activities may share the same head and tail events.
Time flows from left to right.
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The Gantt chart is a timeline chart. It clearly shows when each task is to begin, the time it will
take to complete each task, and which tasks will be going on simultaneously. You may want to
use more than one level of Gantt chart.
A Gantt chart, named after its inventor, shows the activities of a project, the same as CPA.
However, these activities are presented as a bar chart with the start and finishing times clearly
identified.
A- Topic select _ 1
B- Writing concepts _ 2
C- Design methodology A 5
F- Data collection E 1
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G- Data interpretation B, D 3
H- Data presentation E 1
I- Summarizing C, F 4
J- Defending G, H, I 2
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Example:
A small maintenance project consists of the following jobs whose precedence relationship is
given below.
Activities Preceding Expected Time
(Weeks)
A _ 15
B _ 15
C A 5
D A 3
E B, D 8
F E 1
G B, D 12
H E 14
I C, F 3
J G, H, I 14
Required:
a) Draw an arrow diagram representing the project.
b) Find the total float and free float for each activity.
c) Find the critical path and the total project duration.
Solution:
A) The network diagram that represents the project is as follows
5
15
A C
A F
A 3
Start A A 1
A D I Finish
A
B 3
A E 14
15 A A H 14
8
A
G 12A J
A
A
A
B) The total float for each activity
To determine the total float first the earliest start and finish; late start and finish are computed.
Forward pass calculation (obtaining earliest time)
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In this we estimate the earliest start and the earliest finish time.
Steps to be obtaining Earliest time for all activities
a. For each activity that starts the project (including the start node), set its earliest
start time as ES=0.
b. For each activity who ES value has just been obtained, calculate its earliest
finish time as EF= ES + (estimated) duration of the activity.
For each activity whose immediate predecessors now have EF value, obtain its ES by applying
the earliest start time rule. Then apply step “b” to calculate its EF.
Consider activity “A”, its only immediate predecessors is the start node. This node must be
started by time 0 to complete the project, so we begin by assigning values to this node as: Start
node: ES =0
EF = 0+ duration (0 weeks) = 0
Activity A: ES =0
EF = 0 + duration (15weeks) = 15
Activity B: ES= 0
EF = 0+ duration (15weeks) = 15
Activity G has two immediate predecessors activity B and D. The activity must be
waiting to start until both activities B and D are finished.
Activity B has EF = 15
Activity D has EF = 18
Larger EF = 18
Therefore, ES for activity G = EF for activity D= 18
EF = 18 + duration (12weeks) = 30
i. For each of the activities that together complete the project (including the finish node),
set its latest finish time (LF) equal to the earliest finish time of the finish node.
ii. For each activity whose LF value has just been obtained, calculate its latest start time as
LS=LF- duration of the activity.
iii. For each new activity whose immediate successors now how LS values, obtain its LF by
applying the latest finish time rule. Then, apply step 2 to calculate its LS.
iv. Repeat step 3 over and over again until LF and LS have been obtained for all activities
(including the start node).
Solution: Consider activity “J”, its only immediate successor is the finish node. This node
must be reached by time 54 to complete the project within 54 weeks, so we begin by assigning
values to this node as: Finish node: LF= EF=54
LS = 54-0 = 54
Activity J: LF= LS for the finish node =54
LS = 54 – duration (14 weeks) =40
Consider activity D, has two immediate successors. Activity E has LS=18 and
Activity G has LS= 28
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The following table given the calculation of total float and free float
Total float = LS - ES or LF - EF
Free float = ES for activity successor – EF
Having some float or slack on the project is actually good for the project. This means that you
use this “extra” time to tackle unforeseen emergencies, delays, and problems, or test & improve
the quality of the product. If the Float is Zero, then the Project is very risky. Any single point of
failure and the entire project can be delayed. The risk on the project then becomes quite high.
Since the activity A, D, E, H, J, are on the line of critical path for this project had been zero float
or slack.
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Total slack can be positive or negative. If total slack is a positive number, it indicates the
amount of time that the task can be delayed without delaying the project finish date. If the total
slack is a negative number, it indicates the amount of time that must be saved so that the project
finish date is not delayed. Negative slack indicates that there is not enough time scheduled for
the task and is usually caused by constraint dates.
Probabilistic time estimates can be made with the help of the following three estimates.
1. Optimistic time estimate (O)
It is a time required for the completion of an activity under optimum conditions.
2. Pessimistic time (p)
It is a time estimate under worst conditions.
3. The most likely time estimate (R)
It is the most probable amount that will be required.
Thus by making use of the above, one can estimate project completion times as;
Expected time = te = O + 4R + P, Where t is time
6
Having been provided with this information, let us try to find the following facts;
a) Find the expected duration and
b) Draw the PERT Diagram.
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Estimates of activity times for projects are usually made for some given level of resources. In
many situations it is possible to reduce the length of a project by injecting additional resources.
The impetus to shorten projects may reflect effects to avoid late penalties, to take advantage of
monetary incentives for timely completion of project, or to free resources for use on other
projects. In many cases however, the desire to shorten the length of a project merely reflects an
attempt to reduce the indirect costs associated with running the project, such as facilities and
equipment costs, supervision, and labor and presumed costs. Managers often have certain
options at their disposal that allow them to shorten, or crash, certain options at their disposal
that options are using additional personnel or more efficient equipment and relaxing work
specifications. Hence, a project manager may be able to shorten a project, there by realizing a
savings on indirect
project costs by increasing direct expenses to speed up the project. The goal in evaluating time-
and trade-offs is to identify a plan that will minimize the sum of the indirect and direct project
costs.
Crashing -is accelerating project of those critical activities that have the lowest ratio of
incremental cost to incremental time saved
Crash time -is the minimum time in which activity can be completed in case additional
remoras are inducted.
Crash cost -is the total cost of completing an activity in crash time.
The objective of project crash cost analysis is to reduce the total projected completion time (to
avoid late penalties, to take advantage of monetary incentives for timely completion of a
project, or to free resources for we on other the projects), while minimizing the cost of crashing.
Project completion time can be shortened only by crashing critical activities, which follows that
not all project activities should be crashed. However, when activities are crashed, the critical
path may change, requiring further crashing of previously non-critical activates in order to
further reduce the project completion time. In a nutshell, crashing means adding extra
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resources, and managers are usually interested in speeding up project at the least additional
cost.
In order to make a rational decision about which activities (if any) to crash and the extent of
crashing desirable, a manager needs the following information:
1. Regular time and crash time estimates for each activity (normal)
2. Regular (normal) cost and crash cost estimates for “
3. A list of activates that are on the critical path
Note: Activities on critical path are potential candidates for crashing between
shortening non critical activities would not have an impact on total project
duration and activities are crashed according to crashing costs. Crash those
activities with the lowest cost first. Moreover, crashing should continue as long
as the cost to crash is less than the benefit received from crashing. These benefits
might take the form of incentive payments for early completion of the project as
part of a government contract, or they might reflect savings in the indirect
project costs, or both
Note that two or more paths may become critical as the original critical path becomes
shorter, so that subsequent improvements will require simultaneous shortening of two or
more
paths. In some cases it will be most economical to shorten an activity that is on two or more
of the critical paths. This is true whenever the crashing cost for a joint activity is less than
the sum of crashing one activity on each separate path.
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Crash Normal
Time
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Example:
Using information below develop an optimum time – cost solution. Assume that indirect project
costs are birr 1000 per day.
10
6 b 2 End
Start a f
5 9 e
C 4
d
Solution
Step 1. Determine activities on critical path and non critical path and their lengths.
Path Length
1-2-5-6 18
1-3-4-5-6 20 Critical path
2. Rank the critical path activates in order of lowest crashing cost and determine the no of
days each can be crashed.
3. Begin shortening the project, one day at a time, and check after each reduction to see
which path is critical.
4. 1. Shorten activity C by one day – length becomes 19 days
2. Shorten e by one day since shortening c is not possible. – length 18 days.
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3. Since there are two critical paths, further improvement will necessitate
shortening one activity on each.
SUMMARY
18 18 18 17
1-2-5-6
20 19 18 17
1-3-4-5-6
Activity to be
- c d f
crashed
Cost of crashing 300 600 800
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Note: The next activities to be crashed were „e‟ and„d‟. However, if the two activities were
crashed, the total cost will be greater than (600+ 700 = 1300) the benefit (i.e., 1000/day).
Therefore, we stop the crashing at this point.
Total cost of crashing will be the normal cost of the activities plus the crash cost.
? Dear learner, can you compute the total cost of the above problem?
__________________________________________________________
__________________________________________________________
_
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Activity:
1. Given the following information:
Determine:
a)Critical path and Critical activities
b) Duration of the project
c) Slack time of activities
Estimat
(months
Activit a es
) m b
1--->2
y 4 8 12
1--->3 6 10 15
1--->4 2 10 14
2--->5 3 6 9
2--->6 1 4 13
3--->5 3 6 18
4--->5 0 0 0
4--->7 2 8 12
5--->8 9 15 22
5--->7 5 12 21
7--->8 5 6 12
6--->9 7 20 25
8--->9 3 8 20
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3. The Stone River Textile Mill was inspected by OSHA and was found to be in violation of a
number of safety regulations. The OSHA inspectors ordered the mill to alter some existing
machinery to make it safer (Le., add safety guards, etc.); purchase some new machinery to
replace older, dangerous machinery; and relocate some machinery to make safer passages and
unobstructed entrances and exits. OSHA gave the mill only 35 weeks to make the changes; if
the changes w re not made by then, the mill would be fined $300,000. The mill determined the
activities in a PERT network that would have to be completed and then estimated the indicated
activity times, as shown below. Construct the PERT network for this
project and determine the following:
Time
Estimates
(weeks)
Activity Description a m b
1-->2 Order new machinery 1 2 3
1-->3 Plan new physical layout 2 5 8
1-->4 Determine safety changes in 1 3 5
existing machinery
2-->6 Receive equipment 4 10 25
2-->5 Hire new employees 3 7 12
3-->7 Make plant alterations 10 15 25
4-->8 Make changes in existing 5 9 14
machinery
5-->6 Dummy 0 0 0
6-->7 Dummy 0 0 0
7-->8 Dummy 0 0 0
6-->9 Train new employees 2 3 7
7-->9 Install new machinery 1 4 6
8-->9 Relocate old machinery 2 5 10
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5. Indirect costs for a project are $12,000 per week for as long as the project lasts. The
project manager has supplied the cost and time information shown below.
a 3 11,000
b 3 3,000 first week, 4000 others
c 2 6000
d 1 1000
e 3 6000
f 1 2000
10 14
a b
13 6
d
15 c
e 8
f
6. The following table provides the information necessary to construct a project network
and project crash data.
Activity Time Activity Cost ($)
(weeks)
Activit
(i,j) Predecessor Normal Crash Normal Crash
y
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8. Given the following network with the indicated distances between nodes (in miles),
determine the shortest route from node 1 to each of the other four nodes (2, 3, 4, and
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