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5/Scheduling the Project

Chapter 5
Scheduling the Project

This chapter covers the topic of scheduling, probably the most extensively covered
subject dealing with project management. In addition to the usual PERT and CPM
networks, Gantt charts, etc., the subject of project uncertainty and risk management is
also discussed. The use of computer simulation to generate the approximate distribution
of project completion times is also discussed. Appendix C illustrates how Crystal Ball
can facilitate this analysis and be used to help better understand the implications of
schedule uncertainty.

Cases and Readings

A case appropriate to the subject of this chapter is:

Harvard: 9-613-021 Arrow Diagramming Exercise This 3-page case describes the
marketing campaign for a newly developed industrial hardware item. Over two-dozen
activities are noted and described. The case asks for the network diagram and critical
path.

A reading appropriate to the subject of this chapter is:

L.P. Leach. Critical Chain Project Management Improves Project Performance


(Project Management Journal, June 1999, p. 39-51). This article explains the procedures
developed by E. Goldratt in his Critical Chain approach to project management. Includes
a discussion of project and feeder buffers. Projects using the critical chain often report
significantly improved schedule, cost, and scope performance.

Answers to Review Questions

1. By definition, critical tasks are those tasks that if delayed will delay the completion of
the entire project. Therefore, these tasks should be managed more closely than non-
critical tasks. (In cases where the activity times are not known with certainty, the
tasks assumed to be critical at the beginning of the project may turn out not to be so
critical. Therefore, when task times are uncertain, all tasks that may reasonably delay
project completion must be carefully managed.)

2. Slack for a particular task is calculated by subtracting the earliest time the task can
start from the latest time the task can start or by subtracting the earliest time the task
can finish from the latest time the task can finish. Both calculations result in the same
slack and indicate a window in which the task can be started and finished without
delaying the entire project. The slack for a particular path is calculated by subtracting

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the path’s duration from the critical path’s duration and provides an indication of how
much the path can be delayed without delaying the completion of the project.

3. The earliest start time for an activity with two predecessors is equal to the later
earliest finish time of the two predecessors since both predecessors must be
completed for the task to begin. The latest finish time for an activity with two
successors is equal to the smaller latest start time of the two successors. If the larger
were used, then the preceding task would be permitted to finish after the latest start
time of the other successor.

4. No, all activities on the same non-critical path will not necessarily have the same
slack. This is because a particular activity may be on multiple paths. When an
activity is on more than one path, its slack is determined by the path with the least
amount of slack.

5. (As noted in Section 3.3, p.64, only immediate predecessors should be listed.)
a. Task 4 is the only immediate predecessor of task 5.
b. b) Task 2 and 3 are both immediate predecessors of task 4.
c. Task 5 is the immediate predecessor of the network finish (F).

6. When two activities have the same beginning and ending nodes they do not have a
unique identity in the project network. To solve this problem a new ending or starting
node is created for one of the activities to provide them with a unique identity. Then
a dummy activity or an activity with no duration is added to preserve the precedence
relationship.

7. Activities a and b are common to both paths and so do not need to be considered.
They must take the same impact on both paths. We did consider the partial paths d-g-
h and c-f.

8. If the promised delivery date for a project is greater than the time required to
complete the project, the project is said to have “project slack.” The amount of the
project slack is equal to the delivery time minus the project completion time.

9. A milestone could be added as a node to the AON network with zero duration.

10. False. Only the path claimed to be critical has a 95 percent chance of being
completed within 24 days. However, there may be one or more other paths that also
have a chance of taking longer than 24 days. If we are comfortable making the
assumption that the paths are independent of one another, then the probability the
project will be completed in 24 days or less can be calculated as the product of the
probabilities that each path is finished on or before day 24.

11. Because the Gantt chart is so easy to construct and read, people may use this tool with
little project management training and no technical knowledge about the project. One

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danger is drawing conclusions and making decisions based on the relatively simple
information displayed in the chart.

12. In cases where the activity times are not known with certainty, it is not possible to
determine the actual duration of each path. Therefore, it is not possible to determine
the critical path a priori. A path that is determined to be critical at the beginning of
the project based on expected activity durations may turn out not to be critical when
the project is half completed, perhaps as a result of the extra management attention
this path received. Indeed, it is common for the status of various paths to alternate
between being critical and not being critical as the project is completed. One danger
is that what is thought to be the critical path at the beginning of the project consumes
all of management’s attention only to have other paths fall behind and actually end up
delaying the project. The implication is that all paths that have the potential to delay
the project should be appropriately managed.

Suggested Answers to Discussion Questions

13. One way to use the network approach to prepare cost estimates would be to simply
estimate the cost of each task in the diagram and then sum these costs up. The time
estimates for the activities would likely be of significant help in estimating some of
the costs (particularly when human labor is required), and developing a cash flow
schedule.

14. It would be accurate to multiply the probabilities together when the paths are
independent of one another. In reality, the paths are not likely to be truly independent
because the paths have activities in common and common resources are shared across
paths. This latter point is particularly noteworthy as the network diagram only shows
technological precedence relationships and most often does not include information
about how the resources will be allocated. In many textbooks it is common to argue
that while true independence across the paths is rarely met, statistical independence is
achieved for large network diagrams with only a few violations. Of course, the
typical homework-type problems assigned are not large enough to justify the
independence assumption and the calculations required for realistically-sized network
diagrams would be far too tedious for most managers. That is why simulation is the
recommended approach in this text. However, it is important to note that
understanding the statistical approach facilitates understanding the simulation
approach.

15. No, the probability would not be more accurate if only the critical path was
considered unless this one path was much longer than all the other paths. In this case
the other paths would have virtually no chance of delaying the entire project. When
activity times are uncertain, properly calculating the probability that the project is
completed by a certain date requires considering the probability that all paths are
completed by the specified date. If the assumption of path independence is
reasonable then the product of the probability of each path completing by the
specified time can be calculated. Otherwise, simulation must be used.

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16. It is much more intuitive, easier to read, and may contain much more information
relevant to the project.

17. As noted in the chapter, the finish-to-start is the most commonly used linkage because
typically certain activities must be completed before other activities can start. The
start-to-start and finish-to-finish linkages are occasionally applicable. In these cases
certain activities must either be started or finished at the same time. The start-to-
finish linkage is probably used the least frequently.

18. On page 121 we begin this discussion the way project managers traditionally think
about these probabilities, i.e., an estimate for a such that the actual duration will be a
or less some specified percent of the time and an estimate for b such that the actual
duration will be b or larger less than some percent of the time. From this perspective
the ensuing discussion on page 122 is misleading since the probabilities are now
defined in terms of the areas between a and b. Thus, the 3.3 corresponding to 95
percent is based on a z-value of 1.645 which has 5 percent of the area in the upper
tail. Doubling this yields the 3.3 given in the text. Note, that the 3.3 is appropriately
used when management specifies an optimistic time estimate that has a 95 percent
chance of being achieved and a pessimistic time estimate that has only a 5 percent
chance of being exceeded (consistent with the discussion on page 121). The 2.6
corresponding to 90 percent is based on a z-value of 1.28 which has 10 percent of the
area in the upper tail. Doubling 1.28 yields the 2.6 given in the book. Again, the 2.6
is appropriately used when management specifies an optimistic time estimate that has
a 90 percent chance of being achieved and a pessimistic time estimate that has only a
10 percent chance of being exceeded.

If the discussion on page 122 is used the percent refers to the probability of the
project being completed within the range of the optimistic and pessimistic time
estimates. In the case of 95 percent estimates the appropriate value would provide
0.025 percent of the area in each tail. For the standard normal distribution this
corresponds to a z-value of 1.96. In other words, + 1.96 standard deviations (or 3.92
standard deviations) encompasses 95 percent of the area under the standard normal
curve. Likewise 3.29 standard deviations encompass 90 percent of the area under the
standard normal curve. Therefore, based on the discussion in the text, it is possible
that students will interpret these probabilities in two different ways. Given this, we
provide solutions for the end-of-chapter problems based on both interpretations.

19. When activity times are uncertain, we can only estimate how long they will actually
take. This means that we can only estimate the duration of the paths also. Since
these are only estimates, we will not know for certain which path actually took the
longest to complete until the project is complete.

20. There are actually two sets of trade-offs project managers must make. Most
commonly, we talk about making trade-offs between cost, schedule, and performance.
However, there is often another set of trade-offs the project manager must deal with.

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Namely, project managers must often make trade-offs between achieving the project
goals and the project team viability. Managing this second set of trade-offs is what is
meant by managing the project team while the first set of goals refers to managing the
project.

Solutions to Problems

21. The expected duration and variance of path a-b-c-f are 44.5 and 6.47, respectively.
The probability that this path will take longer than 50 weeks and therefore interfere
with the project completion can be calculated as follows:

50 − 44 .5
z= = 2.17
6.47

From Appendix A, the area in the upper tail for a z-value of 2.17 can be easily
calculated as 1.5%. This means there is a 98.5% chance that this path will not
interfere with the project being completed in 50 weeks.

The probability that both paths finish by time 50 (assuming the paths are reasonably
independent of one another) is .985 × .86 = 84.71%.

22. (Note to instructor. Refer to Discussion Question 18 for a discussion of two possible
interpretations for the probabilities associated with these types of problems). If we
assume that by 95% we mean that there is a 95% probability that the task will be
completed within the range defined by the optimistic and pessimistic range then (b-a)
should be divided by 3.92, rather than 3. The spreadsheet below provides the
solutions for the 99+ percent probability estimates, as well as the 95% estimates using
both the 3.92 and 3.3. Students may find the use of 3.92 more intuitive. Using this
factor, the probability that path a-b-d-g-h finishes on or before time 50 is 76.5%.

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A B C D E F G H
1 Opt. Norm. Pess. Var. Var. Var.
2 Activity a m b TE ((b-a)/6)2 ((b-a)/3.92)2 ((b-a)/3.3)2
3 a 8 10 16 10.67 1.78 4.16 5.88
4 b 11 12 14 12.17 0.25 0.59 0.83
5 c 7 12 19 12.33 4.00 9.37 13.22
6 d 6 6 6 6.00 0.00 0.00 0.00
7 e 10 14 20 14.33 2.78 6.51 9.18
8 f 6 10 10 9.33 0.44 1.04 1.47
9 g 5 10 17 10.33 4.00 9.37 13.22
10 h 4 8 11 7.83 1.36 3.19 4.50
11
12 a-b-d-g-h 47.00 7.39 17.31 24.43
13 Std Dev 2.72 4.16 4.94
14 Prob 86.5% 76.5% 72.8%
15
16 Key Formulas
17 Cell E12 =E3+E4+E6+E9+E10 {copy to cells F12:H12}
18 Cell F13 =SQRT(F12) {copy to cells G13:H13}
19 Cell F 14 =NORMDIST(50,47,F13,TRUE) {copy to cells G14:H14}

23. (Note to instructor. Please refer to answer to Discussion Question 18.) If we assume
that by 90% we mean that there is a 90% probability that the task will be completed
with the range defined by the optimistic and pessimistic range then (b-a) should be
divided by 3.29, rather than 2.6. The spreadsheet below provides the solutions for the
99+ percent probability estimates, as well as the 90% estimates using both the 3.29
and 2.6. Students may find the use of 3.29 more intuitive. Using this factor, the
probability that path a-b-d-g-h finishes on or before time 50 is 72.7%.

A B C D E F G H
1 Opt. Norm. Pess. Var. Var. Var.
2 Activity a m b TE ((b-a)/6)2 ((b-a)/3.29)2 ((b-a)/2.6)2
3 a 8 10 16 10.67 1.78 5.91 9.47
4 b 11 12 14 12.17 0.25 0.83 1.33
5 c 7 12 19 12.33 4.00 13.30 21.30
6 d 6 6 6 6.00 0.00 0.00 0.00
7 e 10 14 20 14.33 2.78 9.24 14.79
8 f 6 10 10 9.33 0.44 1.48 2.37
9 g 5 10 17 10.33 4.00 13.30 21.30
10 h 4 8 11 7.83 1.36 4.53 7.25
11
12 a-b-d-g-h 47.00 7.39 24.57 39.35
13 Std Dev 2.72 4.96 6.27
14 Prob 86.5% 72.7% 68.4%
15
16 Key Formulas
17 Cell E12 =E3+E4+E6+E9+E10 {copy to cells F12:H12}
18 Cell F13 =SQRT(F12) {copy to cells G13:H13}
19 Cell F 14 =NORMDIST(50,47,F13,TRUE) {copy to cells G14:H14}

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24. Note to instructor. In order to familiarize student with MSP’s “Help” facilities, we
have not given precise instructions in the text for changing MSP’s project calendars,
and for using MSP to find slack. If you wish to make these available, they follow:

The MSP calendar must be reset to a 7-day work week from its usual default of a 5-
day work week. To reset the MSP calendar, click “Tools,” and then click “Change
working time.” On the calendar you will note that Saturdays and Sundays for June
and July are shaded, i.e., nonworking time. Click on each of these days and then
click on “Working time.” Alternatively, you may highlight the entire months of June
and July and then click on “Working time.”

To show slack or float in MSP, click on “View,” then on “More views,” on “Detail
Gantt,” and “Apply.” Activity slack will be shown on the Gantt chart. Then click on
“View,” “Table,” and then “Schedule.” Drag the divider bar to the right, and you will
find “Total slack” and “Free slack” listed in the MSP table. (For these instructions to
take effect, project activity data must have been entered into MSP.)

d i
k
2 5 6
a h 9
e l
f j 8
1 b 3
7
g
c

One way to find the critical path is to identify all paths and calculate their
duration. As shown below, this project has six paths and path b-e-h-j-l is the
critical path with a duration of 40.

Path Duration Critical?


a-d-i-k 29 No
a-d-h-j-k 35 No
b-e-i-k 35 No
b-e-h-j-l 35 Yes
b-f-j-l 35 No
c-g-j-l 35 No

The slack for each task is calculated as follows:

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Activity ES EF LS LF Slack
a 0 5 5 10 5
b 0 7 0 7 0
c 0 4 14 18 14
d 5 11 10 16 5
e 7 16 7 16 0
f 7 13 16 22 9
g 4 8 18 22 14
h 16 22 16 22 0
I 16 24 22 30 6
j 22 31 22 31 0
k 24 34 30 40 6
l 31 40 31 40 0

25.
a. The spreadsheet below was used to calculate the expected time and
variance for each activity.
b. The precedence diagram may be drawn as follows:
d
a f
c
g
b e

c. Path a-c-e-g has the longest expected duration of 19.5 weeks. (Note:
although this path has the longest expected duration, given the uncertainty
associated with the activity times, it may not be the path with the longest
actual duration.) Referring to column G in the spreadsheet below, we see
the probability of completing path a-c-e-g in 23 weeks or less is 96.3%.

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Spreadsheet for Problem 25

A B C D E F G H
1 Opt. Norm. Pess. Var. Var. Var.
2 Activity a m b TE ((b-a)/6)2 ((b-a)/3.92) 2 ((b-a)/3.3) 2
3 a 2 4 6 4.00 0.44 1.04 1.47
4 b 3 5 9 5.33 1.00 2.34 3.31
5 c 4 5 7 5.17 0.25 0.59 0.83
6 d 4 6 10 6.33 1.00 2.34 3.31
7 e 4 5 7 5.17 0.25 0.59 0.83
8 f 3 4 8 4.50 0.69 1.63 2.30
9 g 3 5 8 5.17 0.69 1.63 2.30
10
11 Expected Variance Variance Variance
12 Paths Duration Column F Column G Column H
13 a-d-f 14.83 2.14 5.01 7.07
14 a-c-e-g 19.50 1.64 3.84 5.42
15 b-e-g 15.67 1.94 4.56 6.43
16
17 Prob Path Fin by 23
18 a-d-f 100.0% 100.0% 99.9%
19 a-c-e-g 99.7% 96.3% 93.4%
20 b-e-g 100.0% 100.0% 99.8%
21
22 Prob Project Fin by 23 99.7% 96.3% 93.1%
23
24 Key Formulas:
25 Cell B13 =E3+E6+E8 {copy to cells C13:E13}
26 Cell B14 =E3+E5+E7+E9 {copy to cels C14:E14}
27 Cell B15 =E4+E7+E9 {copy to cells C15:E15}
28 Cell C18 =NORMDIST(23,$B13,SQRT(C13),TRUE) {copy to cells D18:E18 and C19:E20}
29 Cell C22 =PRODUCT(C18:C20) {copy to cells D22:E22}

d. Both of the other two paths have virtually a 100% chance of being
completed by week 23.
e. As shown in the spreadsheet, there is a 96.3% probability of completing
the project by week 23.

26.
a.
d
a i
e
b f j
g
c k
h

b. The expected time and variance for each activity are calculated in the
spreadsheet below.

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A B C D E F G H
1 Opt. Norm. Pess. Var. Var. Var.
2 Activity a m b TE ((b-a)/6)2 ((b-a)/3.29)2 ((b-a)/2.6)2
3 a 5 6 9 6.33 0.44 1.48 2.37
4 b 4 4 6 4.33 0.11 0.37 0.59
5 c 7 9 15 9.67 1.78 5.91 9.47
6 d 6 6 6 6.00 0.00 0.00 0.00
7 e 4 5 7 5.17 0.25 0.83 1.33
8 f 12 16 17 15.50 0.69 2.31 3.70
9 g 8 12 20 12.67 4.00 13.30 21.30
10 h 7 9 16 9.83 2.25 7.48 11.98
11 i 10 14 18 14.00 1.78 5.91 9.47
12 j 6 12 20 12.33 5.44 18.11 28.99
13 k 7 9 14 9.50 1.36 4.53 7.25
14
15 Expected
16 Paths Duration Variance Variance Variance
17 a-d-i 26.33 2.22 7.39 11.83
18 b-e-i 23.50 2.14 7.11 11.39
19 b-f-j 32.17 6.25 20.79 33.28
20 c-g-j 34.67 11.22 37.32 59.76
21 c-h-k 29.00 5.39 17.92 28.70
22
23 Prob of =NORMDIST(38,$E20,SQRT(F20),TRUE)
24 Fin Path copy to cells G25:H25
25 c-g-j < 38 84.0% 70.7% 66.7%
26
27 90% Chance =NORMINV(0.9,$E20,SQRT(F20))
28 of Fin path copy to cells G29:H29
29 c-g-j 39.0 42.5 44.6

c. As shown in the spreadsheet above, this project has five paths. Path c-g-i
has the longest expected duration of 34.67 days although this path may
turn out not to be the critical path given the uncertainty associated with the
activity times.
d. As is calculated in the above spreadsheet, the probability that path c-g-i
will be completed in 38 days or less is 70.7% assuming that the 90% refers
to the probability that of each activity’s duration occurring between the
optimistic and pessimistic time estimate (see answer to Discussion
Question 18)
e. Assuming the paths are independent, for a 38 day delivery, paths a, d, i
and b, e, i values greater than 3.0 and with associated probabilities almost
1.0, they can be ignored. The probabilities for paths b, f, i and c, h, k are .
84 and .95 respectively. Given the probability that the nominal critical
path is .667 (see Q. 25d), the chance that all three paths will be completed
in 38 days is the product of their individual probabilities, .55.
f. Column F in the spreadsheet above corresponds to the 99+ percent level.
According to the calculations shown, there is an 84% chance that the
project will be completed in 38 days or less. The difference in
probabilities is caused by the fact that the estimation of a and b at the 99+

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percent level produces a distribution of activity times (and thus of path


lengths) that is much smaller than the range produced by estimations at the
90 percent level. The greater uncertainty reduces that chance that any path
will be completed in a specific time.
g. As shown in the spreadsheet, if the estimates were made at the 99+ percent
level, the project would have a 90 percent chance of being completed by
day 39. On the other hand, if the estimates were made at the 90 percent
level (and assuming that 90% refers to the area between a and b), the
project would have a 90 percent chance of being completed within 42.5
days.

27. A portion of the spreadsheet developed to simulate this project 150 times is shown
below. (Note: the variance was based on the interpretation that there was a 95%
chance that the task times would fall between a and b.)
A B C D E F G H I J K L M N O
1 Activity Activity Activity Activity Activity Activity Activity Path Path Path Project a-d-f a-c-e-g b-e-g Less than
2 a b c d e f g a-d-f a-c-e-g b-e-g Duration Crirical? Crirical? Crirical? 23 Weeks?
3 3.69 4.74 4.76 7.20 3.92 6.30 3.52 17.20 15.89 13.40 17.20 1 0 0 1
4 2.70 5.38 6.04 6.23 5.58 3.92 4.08 12.84 18.40 16.35 18.40 0 1 0 1
5 4.25 5.70 6.06 5.48 4.22 2.27 8.84 11.99 23.36 15.63 23.36 0 1 0 0
6 5.30 5.79 6.22 6.71 6.10 3.85 4.68 15.87 22.30 17.67 22.30 0 1 0 1
7 5.22 4.39 5.11 7.90 6.03 3.29 4.80 16.41 21.17 14.82 21.17 0 1 0 1
8 5.77 3.30 5.81 7.12 5.44 4.09 4.88 16.98 21.90 12.05 21.90 0 1 0 1
9 1.77 0.99 4.86 6.16 5.53 4.51 4.01 12.45 16.17 7.52 16.17 0 1 0 1
10 3.76 5.23 4.17 6.27 5.10 7.47 3.53 17.51 16.57 15.56 17.51 1 0 0 1
11 5.12 8.45 4.38 5.50 6.51 3.05 6.70 13.67 22.72 23.42 23.42 0 0 1 0
12 2.89 5.93 3.04 5.13 5.55 5.60 5.93 13.62 17.41 17.42 17.42 0 0 1 1
13 3.30 6.15 3.60 7.61 4.22 4.11 5.81 15.01 16.93 16.52 16.93 0 1 0 1
14 2.28 7.05 6.19 5.61 5.73 5.21 5.77 13.10 19.97 19.83 19.97 0 1 0 1
15 2.12 4.55 7.20 6.42 4.82 4.28 5.14 12.82 19.28 13.93 19.28 0 1 0 1
16 3.00 2.84 4.73 6.01 5.70 6.78 6.28 15.79 19.72 11.39 19.72 0 1 0 1
17 3.21 5.76 6.02 5.54 5.17 3.76 6.49 12.51 20.89 16.69 20.89 0 1 0 1
18 1.84 3.86 6.49 5.15 5.27 2.92 5.36 9.91 18.97 13.00 18.97 0 1 0 1

a. Path a-d-f had the longest duration in 3.3% of the replications. Similarly,
paths a-c-e-g and b-e-g had the longest durations in 81.3% and 15.3% of
the simulation replications, respectively. This clearly demonstrates the
difficulty in determining which path will be the critical path when activity
times are uncertain.
b. In 140 of the 150 replications (or in 93.3% of the replications) the project
was completed in 23 weeks or less. More formally, a histogram of the
project completion times could be easily developed as shown below. The
histogram appears to be approximately normally distributed and in fact
almost always passes the chi-squared goodness of fit test confirming that
the normal distribution provides a reasonable fit. Based on the
assumptions that the distribution of project completion times follows a
normal distribution, a mean project completion time of 19.97 weeks, and
standard deviation of 2.07, it can be easily calculated that the probability
of completing the project in 23 weeks or less is 92.86% which is quite
close to the empirical estimate of 93.3%.

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Distribution of Project Completion Times

30
25

Frequency
20
15
10
5
0
15

16

17

18

19

20

21

22

23

24

e
or
M
Weeks

c. The 93.3% calculated here is slightly smaller than the 96.3% calculated in
Problem 25. The difference could be due to a sampling error, not
replicating the project enough times, or related to the assumption that the
activity times are normally distributed.

28. Since the times for activities are now known for activities a - d, updating the
simulation model simply requires replacing the randomly generated activity times for
these tasks with the known times. After entering these known times in columns A –
D, the revised probability of the project being completed by week 23 drops to 40%.
With the updated information, it is clear that path b-e-g will be the critical path.
Furthermore, task B’s actual duration was equal to its pessimistic time estimate. This
and the fact that tasks E and G are skewed to the right helps explain the decrease in
the probability of completing this project by week 23.

Suggested Solution to Discussion Problem

29. Note: If students use MSP to generate the AON network, and if they use a “Start”
node to begin the project, the Start node will be numbered “1.” This will increase by
one all the task numbers used in the problem statement. This is a common source of
confusion in reality as well as in the classroom.

There appear to be three activities that have no logical predecessors: Organize the
sales office, order stock from the manufacturer, and design the package. Organize the
office has three logical successors: select distributors, hire sales personnel, and select
advertising agency. Given these relationships, the other predecessor-successor
relationships are obvious.

Besides the need to manage the critical path carefully, there are only two managerial
problems or opportunities readily apparent. If resources could be made available to

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speed up organization of the sales office, project slack would result. Second,
selecting distributors is the only activity with low slack, 2 weeks. It bears watching.

Students may advise shifting resources from ordering stock from the manufacturer,
but once the purchase order has been made out and sent, the 13 week duration is
mostly waiting for delivery and there are no resource commitments involved.

A D

H
Start
B L

E I

C Finish

F J

G K

A B C D E F G
1 Task Description ES EF LS LF Slack
2 A Design package 0 2 5 7 5
3 B Order stock from manf. 0 13 4 17 4
4 C Org. sales office 0 6 0 6 0
5 D Set up packing facility 2 12 7 17 5
6 E Select distributors 6 15 8 17 2
7 F Hire sales personnel 6 10 6 10 0
8 G Select adv. agency 6 8 13 15 7
9 H Package initial stocks 13 19 17 23 4
10 I Sell to distributors 17 23 17 23 0
11 J Train sales personnel 10 17 10 17 0
12 K Plan adv. campaign 8 12 15 19 7
13 L Ship stock to distributors 23 29 23 29 0
14 M Conduct adv. campaign 12 22 19 29 7

Incident for Discussion Suggested Answer

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Springville Fire Department: The scheduling techniques mentioned are not mutually
exclusive, they are complementary and could be used together. PERT/CPM serves well
for planning and control. A Gantt chart would provide the ease of use, showing
durations, monitoring and on-going analysis. It might also be noted that CPM has
traditionally been favored by the construction industry. If only one technique must be
used, the modified PERT/CPM method, plotted on a time scale, would probably be the
best choice.

Suggested Case Analyses and Solutions


St. Dismas Assisted Living Facility Project Action Plan -- 3

Teaching Purpose: This installment of the St. Dismas case provides students with an
opportunity to further develop their skills in creating and using Gantt charts.

1. Draw a Gantt chart for the construction phase of the project. What is the completion
date if construction starts in March? What is the completion date of the project if
construction is started in November?

The following is the Gantt chart using MSP with a March 1, 2000 start date. This was
entered using the standard calendar defaults used by MSP of a Monday through
Friday 8 am to 5 pm workday with an hour off for lunch. The project completion date
is 7/30/01. (Please note: Start and finish milestones were added to the action plan for
ease in identifying the project’s start and finish dates.)

The following is the Gantt chart using MSP with a November 9, 1999 start date. This
start date was chosen because one of the constraints placed on the project was that it does
not begin until after the elections in November. Elections are usually held the first
Tuesday in the month of November. The case stated that one to two months was
estimated as needing to be added to the project schedule to allow for bad weather
conditions during the outside construction phases of the project (30 – 60 working days).
Days of work need to be added to the duration of each of the steps where work takes
place outside if it will happen during the winter months. The authors chose to add 30
days to each of the steps affected, step # 4 and #5. Step #6 is also work done outside, but
with the changes made to #4 and #5, step #6 will not start until the month of April.
Students may also change the calendars to let the workers off for the holidays of 1999 in
addition to those allowed for in 2000. The new ending date is May 18, 01. The project
will take a total of 30 additional days to complete. By adding 30 days of working time to

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each of the steps possibly affected by the weather, we only ended up adding 30 days total
to the project. This is a good discussion point of how the tasks affected by the increased
durations were not both on the critical path – only Step #4 extended the length of the
project. However, the student’s must keep in mind resource availability and the
increased cost of the project extension.

2. Why is it not possible to meet the scheduling constraints set by the Board? What is
your recommendation to handle the scheduling problem?

The case outlined two specific constraints that the Board placed on the project. The
first is that the project should not start until after the elections in November. The
second constraint is that the building be ready for occupancy by July of the following
year. The board wanted to target occupancy for the summer months.

The constraint of the building opening by July of the year following construction
beginning can not be met. No matter when the project begins it takes longer than one
year to complete. If the project begins immediately after the November 1999
elections it will be completed by May 18, 2001, if the project begins in March of
2000, as recommended by the construction manager it will be completed by July 30,
2001.

The constraint of construction beginning after the November elections can be met
with out any affect on the project. Meeting the July complete occupancy constraint is
possible only if the project is started in the winter months, this would add cost and
time to the project. It would also make the first units available in April, which is
before the targeted “summer” occupancy. Recall that the case stated that research
showed that most people shopped for assisted living facilities during the summer
months. A summer occupancy could be met by starting the project March 1, 2000,
without additional time or cost added to the original estimated project action plan. 45
units would be available for occupancy as early as June 25, 2001 (see step #9 of Gantt
chart with 3/1/00 start date).

3. When will the project be completed based on your recommendation?

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If students chose March 1, 2000, the entire project will be completed by July 31,
2001.

If students chose to start the project February 1, 2000, without any schedule changes
due to weather conditions, the project would be completed by 6/29/01. By using
MSP to change the project’s start date, students can easily choose various new start
dates and see the associated project end date.

4. Draw a Gantt Chart of the Marketing Plan and Implementation Phase of the Project.
Determine the start date of the Marketing Plan phase of the project in order to meet
your recommended facility ready for occupancy date?

We assumed a March 1, 2000 start date for the project.

Below is the Gantt chart for the steps in the Marketing Plan and Implementation
phase of the St. Dismas Assisted Living Project. The action steps were taken directly
from the Marketing plan developed and implemented section of the broad marketing
plan that was presented in the case.

To determine the project’s start date, you must first determine the start date of the
final step in the project action plan, “Implementation of the Marketing Plan”. This
must be started 5 months prior to the building being ready for occupancy so that
marketing has time to find residents to move in when the facility is available. The
marketing plan must be implemented based on the date that the first 45 units are
ready for residents. This date is June 25, 2001.

In order to determine the start date of the Implementation task, Step #7, one can
schedule this project backwards, we know the completion date, we do not know when
to start. Once we enter the projects completion date, MSP will determine when each
step of the project should take place. First enter all of the tasks names, precedences,
and their durations, as shown below:

Next, we must enter this project’s overall finish date, using the project
information dialog box, found in the “Project” menu on the tool bar.

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Enter an end date of 6/25/01, and select “Schedule from the project finish date”.
MSP will automatically determine each step’s start and end date to meet the
constraint you set. See below:

5. What is the next step the team members must take in order to complete their action
plans?
Each member of the project steering team needs to prepare final action plans,
including dates and resources. The team must also determine the predecessors from
outside their specific plan that link to their plans; for example if a step can not be
completed on the marketing phase of the project until Legal has completed a step in
their project plan, this must be noted on the action plan. This will enable a complete
overall integrated project action plan to be tied to the project budget, monitored and
controlled.

Nutristar

Teaching Purpose: The purpose of this case is to reinforce students’ skills in analyzing
projects with probabilistic time estimates. The case also provides students with an
opportunity to use spreadsheets to simulate the completion of the project and use the
results of the simulation to perform standard probability calculations.

1. Draw a network diagram for this project. Identify all the paths through the network
diagram.

The following abbreviations will be used for the activities.

Activity Description Abbreviation


Concept Development A
Plan Development
Define project scope B
Develop broad schedule C
Detailed cost estimates D
Develop staffing plan E
Design and Construction
Detailed engineering F
Facility construction G
Mobilization of construction H
Employees
Procurement of equipment I
Start-up and Turnover
Pre-startup inspection J
Recruiting and training K

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Solving start-up problems L


Centerlining M

Using these abbreviations and the information provided in the case, the following
AOA network diagram can be constructed.

B F
G
A C H I J K
D
L M
E

There are 32 paths through the network as follows

A, B, F,G, J, K, M
A, B, F,G, J, L, M
A, B, F, I, J, K, M
A, B, F, I, J, L, M
A, B, H,G, J, K, M
A, B, H,G, J, L, M
A, B, H, I, J, K, M
A, B, H, I, J, L, M

A, C, F,G, J, K, M
A, C, F,G, J, L, M
A, C, F, I, J, K, M
A, C, F, I, J, L, M
A, C, H,G, J, K, M
A, C, H,G, J, L, M
A, C, H, I, J, K, M
A, C, H, I, J, L, M

A, D, F,G, J, K, M
A, D, F,G, J, L, M
A, D, F, I, J, K, M
A, D, F, I, J, L, M
A, D, H,G, J, K, M
A, D, H,G, J, L, M
A, D, H, I, J, K, M
A, D, H, I, J, L, M

A, E, F,G, J, K, M

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A, E, F,G, J, L, M
A, E, F, I, J, K, M
A, E, F, I, J, L, M
A, E, H,G, J, K, M
A, E, H,G, J, L, M
A, E, H, I, J, K, M
A, E, H, I, J, L, M

2. Simulate the completion of this project 100 times assuming that activity times follow
a normal distribution. Estimate the mean and standard deviation of the project
completion time.

Prior to simulating the project, the mean and standard deviation for each activity must
be calculated. The spreadsheet shown below was developed to calculate these
parameters.
A B C D E F G
1 Optimistic Most Pessimistic Expected Standard
2 Activity Time Likley Time Time Variance Deviation
3 A 3 12 24 12.500 12.250 3.500
4 B 1 2 12 3.500 3.361 1.833
5 C 0.25 0.5 1 0.542 0.016 0.125
6 D 0.2 0.3 0.5 0.317 0.003 0.050
7 E 0.2 0.3 0.6 0.333 0.004 0.067
8 F 2 3 6 3.333 0.444 0.667
9 G 8 12 24 13.333 7.111 2.667
10 H 0.5 2 4 2.083 0.340 0.583
11 I 1 3 12 4.167 3.361 1.833
12 J 0.25 0.5 1 0.542 0.016 0.125
13 K 0.25 0.5 1 0.542 0.016 0.125
14 L 0 1 2 1.000 0.111 0.333
15 M 0 1 4 1.333 0.444 0.667
16
17 Key Formulas:
18 Cell E3: =(B3+(C3*4)+D3)/6 {copy to cells E4:E15}
19 Cell F3: =((D3-B3)/6)^2 {copy to cells F4:F15}
20 Cell G3 =SQRT(F3) {copy to cells G4:G15}

Next, the actual spreadsheet to simulate the completion of the project can be
developed. As demonstrated in the textbook, one approach is to dedicate a column to
each activity and then generate random activity times. Thus, in the spreadsheet
developed for this case, columns A - M were dedicated to activities A - M,
respectively. Then random numbers were generated for one activity at a time using
Excel’s random number generation capability. Using Excel’s Random Number
Generator only requires the specification of the type of random variable, its mean,
standard deviation, and the range for the random numbers. For example, to generate
the random activity times for Activity A, normal was specified for the type of
distribution, 12.5 for the mean, 3.5 for the standard deviation, and A3:A102 for the
output range. A snapshot of the spreadsheet developed is shown below.

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A B C D E
1 Activity Activity Activity Activity Activity
2 A B C D E
3 11.44919 4.702878 0.535049 0.356053 0.421074
4 8.028109 2.884924 0.694415 0.317893 0.489304
5 13.3549 3.234122 0.338099 0.291584 0.241881
6 16.96766 2.398613 0.739816 0.279394 0.303745
7 16.69423 3.21668 0.72604 0.293843 0.375742

After generating the random numbers, one column is dedicated to each path and
formulas are entered to calculate the path completion time based on the random
activity times generated. Again, a snapshot of the spreadsheet developed is shown
below. Entering the formulas is very straightforward since the letters used to label
the activities correspond directly to the column labels. To illustrate, the formula for
path A - B - F- G - J - K - M in row three is: =A3+B3+F3+G3+J3+K3+M3.

L M N O P
1 Activity Activity Path Path Path
2 L M ABFGJKM ABFGJLM ABFIJKM
3 0.441605 0.813718 38.36431331 38.30425754 26.17570742
4 0.974028 1.393954 28.75870589 28.94689201 20.95738934
5 1.115277 1.663059 33.8563155 34.61093393 28.58927129
6 1.13499 1.029766 31.93146016 32.6103619 29.56046329
7 0.502369 1.374516 36.15716899 36.18521673 31.82999899

To determine the time to complete the project, a final column was entered that
calculates the maximum path completion time for each row in the spreadsheet. Then,
summary statistics for this column were calculated. One simulation of 100
replications of the project yielded an average project completion time of 35.53
months with a standard deviation of 4.65 months. The maximum completion time
was 46.17 months and the minimum completion time was 24.85 months.

3. Develop a histogram to summarize the results of your simulation.

Excel’s histogram function can be used to quickly calculate the frequency distribution
of the project completion times. Since the shortest project completion time was just
under 25 months and the longest just over 46, and the standard deviation was close to
five, intervals of 0 - 25, 25 - 30, 30 - 35, 35 - 40, 40 - 45, and 45 - 50 were specified.
Once the frequency distribution was generated, Excel’s ChartWizard was used to
develop the actual histogram shown below. The distribution appears to be
approximately normally distributed.

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A B C D E F G H I J K L
1 Bin Frequency
2 25 1
3 30 15
4 35 30
5 40 38
6 45 14 40
7 50 2 35
8 More 0 30
9
25
10 Number of
11
20
Replications
12 15
13 10
14 5
15 0
16 25 30 35 40 45 50
17
18 Project Completion Time
19
20
21

4. Calculate the probability that the project can be completed within 30 months. What
is the probability that the project will take longer than 40 months? What is the
probability that the project will take between 30 and 40 months?

Normally, the approach to calculate the probability that a project is completed by


some specified time is to calculate the probability that all paths finish by the specified
time. With 32 paths to consider, just determining which paths should be considered
in the analysis is a tedious process. Further, this approach is based on the assumption
that the paths are independent of one another. In the present case, this assumption is
clearly violated due to the number of times several activities appear on alternate
paths. Another approach is to use the information generated from simulating the
completion of the project. Specifically, the results of the simulation indicated that the
average completion time of the project was 35.33 months with a standard deviation of
4.65 months. Based on this and assuming a normal distribution, the probability that
the project is completed within 30 months can be calculated as:
30 − 35.33
z= = −1.15
4.65

Thus, the probability of completing the project in 30 months or less (refer to normal
table in Appendix A) is 12.51 percent. In a similar fashion, the probability that the
project is not completed within 40 months can be calculated as:

40 − 35.33
z= = 1.00
4.65

Thus, the probability that the project is not completed within 40 months is 15.87
percent. The probability that the project is completed within 30 to 40 months is 71.62
(1.0 - .1251 - .1587) percent.

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Test Questions

True/False and Multiple Choice

F 1. ___When it was originally developed, PERT used certain (deterministic) methods to


estimate activity duration.

T 2. ___ AON and AOA networks can both be used to depict any project network.

T 3. ___ The shortest time to complete a network is equal to the duration of the longest
path through the network.

T 4. ___ Critical path tasks always have zero slack.

F 5. ___ To manage a project successfully, it is only necessary that the project manager
pay close attention to tasks on the critical path.

F 6. ___ A project manager should use probabilities to determine project durations only
on complex projects.

F 7. ___ If task duration estimates are carefully made, the project manager needs to only
examine the critical path when conducting a risk analysis.

T 8. ___The actual project duration will be known with certainty after the project is
completed.

T 9. ___ Milestones on a Gantt chart are tasks with a duration of zero.

F 10. ___ It is easiest to see lead and lag time in a project task on a PERT/CPM chart.

F 11. ___ A start-to-finish linkage is the most common way of linking to successive task.

T 12. ___ The formula for the expected time of an activity in a network assumes that the
optimistic, pessimistic and most likely time estimates have a Beta distribution.

T 13. ___ A project schedule is a project action plan converted into a timetable.

F 14. ___ A Gantt chart can not depict a critical path, only a PERT/CPM chart can.

T 15. ___ The difference between the LST and EST is called slack.

F 16. ___ A disadvantage of Gantt charts is that they are hard to draw.

F 17. ___ When discussing completion dates with senior management, a project manager
should include a 10% safety factor.

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F 18. ___Lead and lags cannot be shown in an AOA network.

F 19. ___Leads and lags can only be shown on an AON network.

F 20. ___ The difference between LST and LFT is called slack.

F 21. ___ The difference between EST and LFT is called slack.

T 22. ___ The difference between LFT and EFT is called slack.

T 23. ___ A big advantage of AON networks is that they are easier to draw.

a 24. ___ What is it a milestone?


a. a significant event in the project
b. a mark on a chart that depicts project progress
c. an activity on the critical path
d. an activity with an uncertain completion time
e. all of the above

b 25. ___What is project slack:


a. the amount of time a non-critical task can be delayed without making the
project late.
b. the amount of time the critical path of a project can be delayed without
making the project late.
c. the amount of time an activity on the critical path can be delayed without
making the project late
d. the difference between how long the project would take if all tasks were
completed based on their pessimistic versus optimistic time estimates
e. none of the above

d 26. ___ For which purpose is simulation not used with regard to project scheduling:
a. to overcome the limitations associated with statistical techniques
used to develop probability of completion time estimates
b. to investigate the range of project completion times
c. investigate the distribution of project completion times
d. to verify the accuracy of the optimistic, pessimistic and most likely
time estimates
e. all of the above

c 27. ___ Technical dependencies on a project plan are easiest to see on a:


a. Gantt chart
b. GERT chart
c. PERT/CPM chart
d. Work Breakdown Structure
e. Linear Responsibility Chart

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c 28. ___ PERT was originally used for what type of project?
a. construction
b. R&D
c. military
d. computer software development
e. advertising

b 29. ___ Which of the following is not an element of the Gantt chart?
a. actual progress
b. variance of the critical path
c. the current date
d. scheduled milestones
e. all of the above are elements.

a 30. ___ Which of the following is typically used as the best estimate of task duration?
a. expected time
b. pessimistic time
c. optimistic time
d. most likely time
e. all of the above

Short Answer
31. Define the term Critical Path.
The set of activities on a path from the project’s start to finish that, if delayed, will
delay the completion of the project.

32. What is activity slack?


The amount of time a non-critical activity can be delayed without delaying the
project.

33. What are some of the drawbacks of letting the project team and management know
how much slack is in the project?
The team will tend to delay the start of a task with slack, thinking they have plenty of
time to complete it—the student syndrome. Management will want the slack removed
and the project duration shortened.

34. What is a Gantt chart?


A graphical depiction of a project action plan. It displays project activities as a bar
chart against a time scale.

35. What are the four methods of linking steps in a project using precedence
diagramming?
Finish to start, start to finish, start to start, finish to finish.

Problems

36. The following information has been compiled for a project that is about to begin.

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Activity Activity Duration Preceding Activities


A 3 None
B 5 A
C 3 A
D 1 C
E 3 B
F 4 B, D
G 2 C
H 3 G, F
I 1 E, H

a. Construct the network for the project.


b. Determine the earliest and latest start times for each activity as well as the
earliest finish and latest finish times for each activity.
c. Calculate the slack for each activity.
d. Which activities are critical?
e. How long will it take to complete this project?

Solution:

a.
E
I
B

A F

H
C D

b. and c.

A B C D E F
1 Activity ES EF LS LF Slack
2 A 0 3 0 3 0
3 B 3 8 3 8 0
4 C 3 6 4 7 1
5 D 6 7 7 8 1
6 E 8 11 12 15 4
7 F 8 12 8 12 0
8 G 6 8 10 12 4
9 H 12 15 12 15 0
10 I 15 16 15 16 0

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d. Activities A, B, F, H, and I have zero slack and are therefore critical.

e. The critical path is A-B-F-H-I and has a duration of 16.

37. The following information has been compiled for a project that is about to begin.
Assume the time estimates were made at the 99+ percent level.

Preceding Optimistic Most Pessimistic


Activity Activities Time Likely Time
A None 6 7 14
B None 8 10 12
C A 2 3 4
D A 6 7 8
E B, C 5 5.5 9
F B, C 5 7 9
G D, E 4 6 8
H F 2.5 3 3.5

a. Construct the network.


b. What is the probability that the path with the longest expected duration
will be completed within 21 days?
c. Assuming the paths are independent, what is the probability that the
project will be completed within 21 days?

Solution

a.
D

A G

C E

B H

b. As shown in the spreadsheet below, path A-C-E-G has the longest


duration of 23 and a probability of being completed by time 21 of 11.5%.
c. The probabilities of the other four paths being completed by time 21 can
be calculated in a similar fashion. Based on the assumption that the paths
are independent, the probability that the project is completed by time 21
can be calculated by taking the product of these respective probabilities.
In this case, the probability that the entire project is completed by 21 days

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is .5 percent. In other words, there is only half a percent chance that all
five paths will be completed by time 21.

A B C D E F
1 Task Opt. Most Likely Pess. tE Variance
2 A 6 7 14 8 1.78
3 B 8 10 12 10 0.44
4 C 2 3 4 3 0.11
5 D 6 7 8 7 0.11
6 E 5 5.5 9 6 0.44
7 F 5 7 9 7 0.44
8 G 4 6 8 6 0.44
9 H 2.5 3 3.5 3 0.03
10
11 Prob of
12 Expected Path
13 Paths Duration Variance z Fin < 21
14 A-D-G 21 2.3 0.00 50.0%
15 A-C-E-G 23 2.8 -1.20 11.5%
16 A-C-F-H 21 2.4 0.00 50.0%
17 B-E-G 22 1.3 -0.87 19.3%
18 B-F-H 20 0.9 1.04 85.2%
19
20 Prob of
21 Proj < 21 0.5%

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