Pile cp14

14
Programme Evaluation and Review

Technique
Question 1
A product comprised of 10 activities whose normal time and cost are given as follows:
Activity
1-2
2-3
2-4
2-5
3-5
4-5
5-6
6-7
6-8
7-8
Normal Time (days)

3
3
7
9
5
0
6
4
13
10
Normal cost
50
5
70
120
42
0
54
67
130
166
Indirect cost ` 9 per day.

(i)
Draw the network and identify the critical path.
(ii)
What are the project duration and associated cost ?
(iii) Find out the total float associated with each activity.
Answer
6
(i)
3
Critical path A
1------2-------5-------6---------7---------8
The Institute of Chartered Accountants of India
(6 Marks) (May, 2005)
Programme Evaluation and Review Technique

(ii)
14.2
A D G H J is the critical path having normal project duration

3 9 6 4 10 = 32 days
Normal project cost:- Direct cost
` 704
Indirect cost (329)
288
992
(iii) Calculation of total float

Activity
Nt(days)
EF
LF
Float (LFEF)
1-2
2-3
2-4
10
12
2-5
12
12
3-5
11
12
4-5
10
12
5-6
18
18
6-7
22
22
6-8
13
31
32
7-8
10
32
32
Question 2
A small project is composed of seven activities, whose time estimates are listed below.
Activities are identified by their beginning (i) and ending (j) node numbers.
Activity
Estimated durations (in days)
(I-j)
Optimistic
Most likely
Pessimistic
1-2
14
1-3
14
1-4
16
2-5
3-5
10
28
4-6
10
16
12
30
5-6
6
(a) Draw the project network.
(b) Find the expected duration and variance for each activity. What is the expected project
length?
14.3
Advanced Management Accounting
(c) If the project due date is 38 days, what is the probability of meeting the due date ?
Given:
0.50
0.67
1.00
1.33
2.00
0.3085
0.2514
0.1587
0.0918
0.0228
(7 Marks) (Nov., 2005)

Answer
(a)
Estimated
durations
(I j)
1-2
14
1-3
14
1-4
16
2-5
3-5
10
28
12
16
4-6
10
16
10
5-6
12
30
14
16
Activity
a 4m b
6
(in
days)
The critical path is 1-----3----5----6

(b) The expected duration of the project 8+12+14 = 34 days
(c) Variance of project length is 2 4 16 16 36
ba

14.4
The standard normal deviate is:

Z=
due date - expected date of completion

var iance
When due date is 38 days

Z=
38 34 4
0.67 Probability meeting the date is 0.7486 or 74.86%.
6
6
Question 3
A network is given below:
(i)
Name the paths and give their total duration.
(ii)
Give three different ways of reducing the project above duration by four days.
(6 Marks) (Nov, 2006)

Answer
(i)
Assuming that the duration of activity 3 5 is 4 weeks.

The various critical paths are:
1-2-5-8-9
15 weeks
1-3-4-7-8-9
15 weeks
1-3-4-6-7-8-9
15 weeks
1-3-5-8-9
15 weeks
(ii) Note: Since the duration for activity 3-5 is not specified it is open for you to assume the
duration. Depending upon the duration assume three possibilities emerge.
14.5

1.
2.
3.
If the duration assumed is more than 4 weeks then that path (13, 35, 58, 89) alone
will be critical. In that case you can choose any of the activity in the critical path.
If the duration assumed is exactly 4 weeks then it will be one of the 4 critical paths
and the various possibilities are given below.
If the duration assumed is less than 4 weeks then the solution should be based on 3
of the critical paths namely 1-2-5-8-9, 1-3-4-6-7-8-9 and 1-3-4-7-8-9. This has 16
combinations.
Reduce in the following ways, the project duration is. Since all the paths are critical,
reduction is possible by combining activities. The activities can be independent,
common to few paths and common to all the paths. The various categories are as
follows:
1. Common to all the paths. 8-9
2. Independent : Combination 1. 1-2,3-5,4-6 and 4-7.
Combination
2.
2-5,3-5,4-6 and 4-7.
Combination
3.
1-2,3-5,4-7, 6-7.
Combination
4.
2-5,3-5,4-7, 6-7.
3. Activities common to two of the paths.
Combination
1.
1-2,1-3.
Combination
2.
1-3,2-5.
Combination
3.
3-4,5-8.
Combination
4.
5-8,7-8.
4. Activities common to two of the paths and two independent activities.
Combination
1.
1-2,3-4,3-5.
Combination
2.
1-2,3-5,7-8.
Combination
3.
2-5,3-4,3-5.
Combination
4.
2-5,3-5,7-8.
Combination
5.
4-6,4-7,5-8.
Combination
6.
4-7,5-8,6-7.
(Any three of the above combination.)
Question 4
A company had planned its operations as follows:
Activity
Duration (days)
12
24
13

34
14
25
16
47
19
36
24
57
68
7
8
(i)
78
Draw the network and find the critical paths.
(ii)
After 15 days of working, the following progress is noted:
14.6
(a) Activities 12, 13 and 14 completed as per original schedule.

(b) Activity 24 is in progress and will be completed in 4 more days.
(c) Activity 36 is in progress and will need 17 more days to complete.
(d) The staff at activity 36 are specialised. They are directed to complete 36 and
undertake an activity 67, which will require 7days. This rearrangement arose due
to a modification in a specialisation.
(e) Activity 68 will be completed in 4 days instead of the originally planned 7 days.
(f)
There is no change in the other activities.
Update the network diagram after 15 days of start of work based on the assumption given
above. Indicate the revised critical paths alongwith their duration.
(11 Marks) (May 2007)
Answer
(i)
16
19
24
14.7
Paths
Duration
12578
7 + 16 + 9 + 8 = 40
12478
7 + 8 + 19 + 8 = 42
1478
6 + 19 + 8 = 33
13478
8 + 6 + 19 + 8 = 41
1368
8 + 24 + 7 = 39
Critical path 1 2 4 7 8 = 42 days.

Revised Duration of activities 2 4 and 3 6 after 15 days for updation.
Activity
Preceding Activity
Date of completion
Revised Duration
24
12
15 + 4 = 19 days
19 7 = 12 days
36
13
15 + 17 = 32 days
32 8 = 24 days
6 7 (new activity)
36
7 days
68
36
4 days
(ii)
16
12
19
24
Paths
Duration
12578
7 + 16 + 9 + 8 = 40
12478
7 + 12 + 19 + 8 = 46
1478
6 + 19 + 8 = 33
13478
8 + 6 + 19 + 8 = 41
1 3 6 7 8
8 + 24 + 7 + 8 = 47
1368
8 + 24 + 4 = 36
Critical path = 1 3 6 7 8 = 47 days.
14.8
Question 5
The following information is available:
Activity
No. of days
No. of men required

per day
12
13
14
26
35
56
46
(i)
Draw the network and find the critical path.
(ii)
What is the peak requirement of Manpower? On which day(s) will this occur?
(iii) If the maximum labour available on any day is only 10, when can the project be
completed?
(9 Marks) (May, 2008)
Answer
2
4
6
D
1
C
2
B
8
3
4
Path
Days
AD
10
BEF
CG
4
E
1
F
1
G
CP
Critical Path = 1 2 6
i.e. AD = 10 days.
Peak requirement is 11 men, required on days 7 and 9.
If only 10 men are available on any day, shift F,G to days 10 and 11 and the project can be
completed in 11 days.
14.9
Day
A2
A2
A2
A2
B3
B3
E2
E2
10
D3
D3
D3
D3
D3
D3
E2
E2
11
12
13
14
F3
C5
C5
C5
C5
C5
C5
C5
C5
G8
10
10
10
10
11
11
If s/o
shift
New
10
10
10
10
3
F3
G8
Question 6
A project consists of seven activities and the time estimates of the activities are furnished as
under:
Optimistic
Days
Most likely
Days
Pessimistic
Days
12
10
16
13
14
16
25
35
11
32
46
10
16
56
Required:
Activity
(i)
Draw the network diagram.
(ii)
Identify the critical path and its duration.
(iii) What is the probability that the project will be completed in 5 days earlier than the critical
path duration?
(iv) What project duration will provide 95% confidence level of completion (Z 0.95 =1.65) ?
14.10
Given
Z
Probability
1.00
1.09
1.18
0.1587
0.1379
0.1190
1.25
1.33
0.1056
0.0918
(11 Marks) (Nov., 2008)
Answer
Calculation of expected time and variance of each activity:
Activity
Optimistic
Days
Most likely
Days
Pessimistic
Days
Expected
Duration
Variance
12
10
16
10
13
14
16
25
35
11
32
14
16
46
10
16
10
2
56
The network diagram is as under:
Critical Path:
Duration (days)
13
35
56
14
= 25 days
= 18
Standard deviation: 1
16
18 4.24
14.11
Probability that the project will be completed five days earlier:
20 25
1.18.
4.24
According to probability values given in the question probability is 11.9%

To obtain 95% confidence level:
1.65
X 25
4.24
X 25 = 6.996
X = 32 days
Question 7
The normal time, crash time and crashing cost per day are given for the following network:
2
1
4
(i)
Activity
Normal time (days)
Crash time (days)
Crashing cost (Rs./day)
12
18
14
40
13
23
22
20
23
60
24
10
40
34
80
45
50
Crash the project duration in steps and arrive at the minimum duration. What will be the
critical path and the cost of crashing?

(ii)
If there is an indirect cost of ` 70 per day, what will be the optimal project duration and
the cost of crashing?
(10 Marks) (Nov., 2008)
Answer
(i)
14.12
Critical path
12345
37 days
Paths:
1
Normal
Crash
36
26
37
27
34
30
Crash Activity
Days,
Cost
Step I
12
40
II
12
40
III
45
50
IV
45
50
23
60
VI
12&13
60 (40 + 20)
300
1 2 4 5
1
Revised critical paths : 2 3 4 5 31 days
1 3 4 5
VII
12 & 34
(40 + 80)
120
420
But VII is not done if indirect cost = 70, which is < 120.
30 days
14.13
(ii) Project duration is 31 days and cost of crashing is 300.

Workings of Crashing:
15
16
17
18
10
40
15
16
17
32
31
26 26
26
26
26
37
36
35
33
32
31
27
26
26
26 26
26
50
34
40
14
36 35
6
8
18
2
40
60
14
80
5
50
2
22
3
2
6
14.14
23
5
1
20
22
Critical Path : 1 2 3 4 5
34
34
34
32
31
30
30
30
30
30 30
30
80
50
(37 days) Crashing cost
(1)
12
1 day
40
(2)
12
1 day
40
(3)
45
2 days
100
(4)
23
1 day
60
(5)
12&13
1 day (40 + 20)
60
300
1245
Revised critical Path :
12345
1345
Duration 31 days
(Note: After each crashing a networking diagram has to be drawn and critical path has to
be decided).
Alternative Solution:
(i)
Network Diagram:
18
1
0
10
18 8
29 29
18
8
23
3
26 26
5
37 37
14.15
Project duration = 37 days.

(i)
(ii)
1 2 3 4 5 (Critical Path)
Crashing by Steps
Crash
activity
Crashing
No. of days
Crash cost
per day (Rs.)
Crashing cost
(Rs.)
12
40
120
12
40
40
13
20
20
Step : 3
45
50
100
Step : 4
34
80
80
Step : 1
Step : 2
360
Revised Network
14
1
0
10
14 14
24 24
8
5
30 30
22
3
22 22
Effective crashing days = 7

Critical Paths:
(i)
1245
(ii)
1345
(iii) 1 2 3 4 5
Project duration = 30 days
Crashing cost = ` 360
(ii) For optimal project duration, we have to consider indirect cost per day i.e., ` 70. The
crashing cost of activity 34 is ` 80 which is higher than indirect cost per day. Hence,
14.16
we may opt it out (Step 4).

In that case, project duration = 31 days.
Crashing cost = ` 280.
Saving in indirect cost = 6 ` 70 = ` 420.
Question 8
The following network gives the duration in days for each activity :
2
2
3
1
4
4
(i)
You are required to list the critical paths.
(ii)
Given that each activity can be crashed by a maximum of one day, choose to crash any
four activities so that the project duration is reduced by 2 days.
(6 Marks)(Nov.,2009)
Answer
Critical Paths:
All are critical paths:
(i)
1256
2+8+5
= 15
(ii)
1356
3+7+5
= 15
(iii) 1 4 5 6
4+6+5
= 15
(iv) 1 3 4 5 6
3+1+6+5
= 15
(i)
Choose 5 6, common path;

Crash by 1 day
(ii)
Choose: 1 2, 1 3, 1 4
Or
(iii) Choose: 1 2, 3 5, 4 5
Or
(iv) Choose: 2 - 5 , 3 5, 4 5
14.17
Or
(v) Choose: 1 3, 1 4, 2 - 5
Question 9
State any 5 limitations of the assumptions of PERT and CPM
(5 Marks)(Nov.,2011)
Answer
Limitations of the assumption of PERT and CPM
(i)
Beta distribution may not always be applicable
(ii)
The formulae for expected duration and standard deviation are simplification. In certain
cases, errors due to these have been found up to 33 %
(iii)
The above errors may get compounded or may cancel each other
(iv)
Activities are assumed to be independent. But the limitations on the resources may not
justify the assumption.
(v)
It may not always be possible to sort out completely identifiable activities and to state
where they begin and where they end
(vi)
If there exist alternatives in outcome, they need to be incorporated by way of a decision

tree analysis.
(vii)
Time estimates have a subjective element and to this extent, techniques could be weak.
Contractors can manipulate and underestimate time in cost plus contract bids. In
incentive contracts, overestimation is likely.
(viii) Cost-time tradeoffs / cost curve slopes are subjective and even experts may be widely
off the mark even after honest deliberations
Question 10
The following network and table are presented to you:
14.18
Activity
Normal
Duration
(Days)
Normal
Cost (`)
Crash
Duration
(Days)
Crash
Cost (`)
2,250
2,750
16
1,875
11
2,750
14
2,250
3,000
12
3,000
3,750
15
1,000
14
2,500
10
2,500
2,860
Perform step by step crashing and reduce the project duration by 11days while minimizing the
crashing cost. What would be the cost of the crashing exercise?
(8 Marks)(May, 2012)
Answer
X= 15
W= 12
Y= 10
V = 14
T=8
U = 16
Paths:
TUVY
8+16+14+10
= 48 days (critical path)
WXY
12+15+10
= 37 days
T
Crash cost-normal cost
500
875
750
360
Crashing cost/day
250
175
150
180
Crash days possible
Step I crash V 5 days

Step II crash U 5 days
750
875
Step III crash Y- 1 day

Minimum cost of crashing exercise
(`)
180
750+875+180 = 1805 (for 11 days)
Question 11
Write a short note on the distinction between PERT and CPM.
(5 Marks)(Nov., 2012)
14.19
Answer
The PERT and CPM models are similar in terms of their basic structure, rationale and mode of
analysis. However, there are certain distinctions between PERT and CPM networks which are
enumerated below:
(i)
CPM is activity oriented, while PERT is event oriented
(ii) CPM is a deterministic model. It completely ignores the probabilistic element of the
problem. PERT is a probabilistic model. It uses three estimates of activity time.
Optimistic, pessimistic and most likely, with a view to take into account time uncertainty.
(iii) PERT is primarily concerned with time. It helps the manager to schedule and coordinate
various activities so that the project can be completed on scheduled time. CPM places
dual emphasis on time and cost and evaluates the trade-off between project cost and
project time. By deploying additional resources, it allows the project manager to
manipulate project duration within certain limits so that the project duration can be
shortened at an optimal cost.
(iv) CPM is commonly used for those projects which are repetitive in nature and where one
has prior experience of handling similar projects. PERT is generally used for those
projects where time required to complete various activities are not known as prior.
Question 12
The Noida Nirman Authority intends to install a road traffic regulating signal in a heavy
traffic prone area. The total installation work has been broken down into six activities.
The normal duration, crash duration and crashing cost of the activities are expected as
given in the following table : .
Normal Duration
Crash
Duration
(Days)
(Days)
per day (`)
1-2
30,000
1-3
40,000
1-4
15
10
45,000
2-4
15,000
3-4
10
20,000
4-5
60,000
Activity
Crashing Cost
You are required to :

(i)
draw the network and find the normal and minimum duration of the work.
(ii)
compute the additional cost involved if the authority wants to complete the work in the
shortest duration.
14.20
Answer
(i)
The critical path is 1 3 4 5. The normal length of the project is 20 days and
minimum project length is 12 days.
(ii) Statement showing Additional Crashing Cost:
Normal
Project
Length
Days
20
19
18
17
16
15
Job
Crashed
Crashing Cost
3-4
3-4
3-4
4-5
3-4,1-4
14
1-3, 1-4, 2-4
13
1-3, 1-4, 2-4
12
1-3, 1-4, 1-2
` 20,000 x1 Day = ` 20,000

` 20,000 x 2 Days = ` 40,000
` 20,000 x 3 Days = ` 60,000
` 20,000 x 3 Days +1 Day x ` 60,000 =` 1,20,000
` 20,000 x 4 Days + ` 60,000 x1 Day + ` 45,000 x 1
Day = `1,85,000
` 1,85,000 +1 Day x ` 40,000 +1 Day x ` 45,000+ 1
Day x ` 15,000 = ` 2,85,000
` 2,85,000 +1 Day x ` 40,000 +1 Day x ` 45,000+ 1
Day x ` 15,000 = ` 3,85,000
` 3,85,000+1 Day x ` 40,000 +1 Day x ` 45,000 +1
Day x ` 30,000 = ` 5,00,000
` 5,00,000/-
Total Additional Cost

(At shortest duration)
14.21
Question 13
Under what circumstance PERT is more relevant? How?
Answer
PERT (Program Evaluation and Review Technique) is more relevant for handling such
projects which have a great deal of uncertainty associated with the activity durations.
To take these uncertainty into account, three kinds of times estimates are generally obtained.
These are:
The Optimistic Times Estimate: This is the estimate of the shortest possible time in which
an activity can be completed under ideal conditions. For this estimate, no provision for
delays or setbacks are made. We shall denote this estimate by to.
The Pessimistic Time Estimate: This is the maximum possible time which an activity
could take to accomplish the job. If everything went wrong and abnormal situations
prevailed, this would be the time estimate. It is denoted by tp.
The Most Likely Time Estimate: This is a time estimate of an activity which lies between
the optimistic and the pessimistic time estimates. It assumes that things go in a normal
way with few setbacks. It is represents by tm.
Question 14
A project consists of seven activities whose time estimates (optimistic - to, pessimistic - tp and
most likely - tm) in days are given below:
Activity
to
tp
tm
1-2
1-3
1-4
2-5
3-5
4-6
5-6
1
1
2
2
3
2
2
5
7
10
8
15
8
14
3
4
6
2
6
5
5
Required:
(i)
Draw the network and find out the expected time and variance for each activity. What is
the expected duration for completion of the project?
(ii)
IT the target time is 22 days, what is the probability of not meeting the target?
(iii) Within how many days can the project be expected to be completed with 99 percent
chance?
Given Z2.33 = 0.9901 and Z1.67 = 0.9525
(8 Marks)(Nov., 2013)
14.22
Answer
(i)
The network for the given problem
The Expected Time and Variance for each of the activities (in Days)
Time Estimates (Days)
Expected
Time
Variance
Optimistic
(to)
Pessimistic
(tp)
Most Likely
(tm)
A
(12)
B
(13)
C
(14)
10
D
(25)
E
(35)
F
(46)
G
(56)
16
9
1
15
14
Activity
te =
to +4tm +tp
6
tp - t o
S 2t =
Probability of Completing the Project by Schedule Time Ts is given by Z =
4
9
1
Ts Te
e
14.23
Expected Project Length (T e)
= 17 Days
2
Variance of the Critical Path 1356 ( e ) [1+4+4]
= 9
Standard Deviation of the Critical Path ( e ) 9
= 3
(ii) Probability of not meeting the target time of 22 days
Ts Te
e

Accordingly probability of meeting the target time of 22 days is given by Z
=
22 17
3
1.67*
Probability (Z = 1.67)
= 0.9525
Probability of not meeting the target time of 22 days [1 0.9525]
= 0.0475
=
4.75%
Ts Te
e
Or
(iii) Expected Time if the project to be completed with 99% chance
Accordingly,
Z=
Ts 17
3
At 99% Chance Z equals to 2.33

Accordingly,
2.33 =
Ts 17
3
Ts = 23.99
Or
Hence, expected time of completing the project with 99% of chances is 23.99 or 24 Days.
Question 15
The following table relates to a network:
Activity
Normal Time
(Days)
Crash Time
(Days)
Normal Cost
(`)
Crash Cost
(`)
1-2
30,000
40,000

2-3
2-4
2-5
3-4
4-5
6
8
9
5
7
4
7
6
4
5
48,000
1,25,000
75,000
82,000
50,000
14.24
70,000
1,50,000
1,20,000
1,00,000
84,000
The overhead cost per day is ` 5,000 and the contract includes a penalty clause of
` 15,000 per day if the project is not completed in 20 days.
(i)
Draw the network and calculate the normal duration and its cost.
(ii)
Find out:
(1) the lowest cost and the associated time.
(2) the lowest time and the associated cost.
(8 Marks) (May, 2014)
Answer
(i)
The network for the given problem
Normal Duration
23 Days
Associated Cost
`5,70,000
(Refer Statement Showing Project Cost & Duration)
(ii) Lowest Cost

Associated Time
` 5,42,000
20 Days
14.25
Lowest Time
17 Days
Associated Cost
` 5,79,000
Workings:
Statement Showing Project Cost & Duration
Project
Length
Days
23
Job
Crashed
Crashing
Cost
Normal
Cost
Indirect
Cost
Penalty
Total
Cost
`4,10,000
12
`10,000
(`10,000 1 Day)
`4,10,000
20
23
18
45
17
34
`45,000
(`15,000
3 Days)
`30,000
(`15,000
2 Days)
`0
(`15,000
0 Days)
`0
(`15,000
0 Days)
`0
(`15,000
0 Days)
`5,70,000
22
`1,15,000
(`5,000
23 Days)
`1,10,000
(`5,000
22 Days)
`1,00,000
(`5,000
20 Days)
`90,000
(`5,000
18 Days)
`85,000
(`5,000
17 Days)
`32,000
`4,10,000
(`10,000 + `11,000
2 Days)
`66,000
`4,10,000
(`32,000 + `17,000
2 Days)
`84,000
`4,10,000
(`66,000 + `18,000
1 Day)
`5,60,000
`5,42,000
`5,66,000
`5,79,000
Statement Showing Cost Slope of each activity

Activity
1-2
2-3
2-4
2-5
3-4
4-5
Total
Normal
Duration
Cost
(Days)
(`)
5
6
8
9
5
7
Crash
Duration
Cost
(Days)
(`)
30,000
48,000
1,25,000
75,000
82,000
50,000
4,10,000
4
4
7
6
4
5
40,000
70,000
1,50,000
1,20,000
1,00,000
84,000
Question 16
The activities involved in a project are detailed below:
Cost Slopes
T
C
C/T
(Days)
(`)
(`)
1
2
1
3
1
2
10,000
22,000
25,000
45,000
18,000
34,000
10,000
11,000
25,000
15,000
18,000
17,000
14.26
Duration (Weeks)
Job
Optimistic
Most likely
Pessimistic
12
23
35
78
58
67
45
16
24
3
6
5
4
1
3
3
2
2
6
12
11
19
4
9
6
5
5
15
30
17
28
7
27
15
14
8
(i)
Draw a network diagram.
(ii)
Find the critical path after estimating the earliest and latest event times for all nodes,
expected project length, variance of critical path, standard deviation of critical path and
(iii) What will be the effect on current critical path if the most likely time of activity 3-5 gets
revised to 14 instead of 11 weeks given above?
(6 Marks) (November, 2014)
Answer
(i)
The Network for the given problem-
14.27
(ii) The Expected Time and Variance for each of the Activities (in Weeks)
Activity
12
23
35
78
58
67
45
16
24
Time Estimates (Weeks)
Expected Time
Optimistic
(to)
Most Likely
(tm)
Pessimistic
(tp)
3
6
5
4
1
3
3
2
2
6
12
11
19
4
9
6
5
5
15
30
17
28
7
27
15
14
8
te =
Variance
t o + 4t m + t p
S2t
tp - to
=
7
14
11
18
4
11
7
6
5
Expected Project Length (T e)

2
Variance of the Critical Path 12358 ( e )

Standard Deviation of the Critical Path ( e )
4
16
4
16
1
16
4
4
1
36 weeks
4+16+4+1
25
25
=
=
(iii) Effect on the current critical path if the most likely time of activity 35 gets revised to 14:
If the most likely time of activity 35 gets revised to 14 instead of 11 weeks as given, the
expected duration of the activity 35 will be
t o + 4t m + t p
te
te
5 4x14 17
6
te
13 Weeks
Accordingly, expected duration of the activity 35 will be 13 weeks instead of 11 weeks

calculated earlier. As activity 35 lie on the critical path, the project duration will increase
by 2 weeks (1311) and the total project duration will become 38 weeks (36+2).

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14

Programme Evaluation and Review

Normal Time (days)

Indirect cost ` 9 per day.

Draw the network and identify the critical path.

What are the project duration and associated cost ?

The Institute of Chartered Accountants of India

(6 Marks) (May, 2005)

Programme Evaluation and Review Technique

A D G H J is the critical path having normal project duration

Indirect cost (329)

(iii) Calculation of total float

Estimated durations (in days)

The Institute of Chartered Accountants of India

Advanced Management Accounting

(7 Marks) (Nov., 2005)

The critical path is 1-----3----5----6

The Institute of Chartered Accountants of India

Programme Evaluation and Review Technique

The standard normal deviate is:

due date - expected date of completion

When due date is 38 days

Name the paths and give their total duration.

(6 Marks) (Nov, 2006)

Assuming that the duration of activity 3 5 is 4 weeks.

The Institute of Chartered Accountants of India

Advanced Management Accounting

The Institute of Chartered Accountants of India

Programme Evaluation and Review Technique

After 15 days of working, the following progress is noted:

(a) Activities 12, 13 and 14 completed as per original schedule.

There is no change in the other activities.

The Institute of Chartered Accountants of India

Advanced Management Accounting

Critical path 1 2 4 7 8 = 42 days.

The Institute of Chartered Accountants of India

Programme Evaluation and Review Technique

No. of men required

Draw the network and find the critical path.

The Institute of Chartered Accountants of India

Advanced Management Accounting

Draw the network diagram.

Identify the critical path and its duration.

The Institute of Chartered Accountants of India

Programme Evaluation and Review Technique

The Institute of Chartered Accountants of India

Advanced Management Accounting

Probability that the project will be completed five days earlier:

According to probability values given in the question probability is 11.9%

Normal time (days)

Crash time (days)

Crashing cost (Rs./day)

The Institute of Chartered Accountants of India

Programme Evaluation and Review Technique

The Institute of Chartered Accountants of India

Advanced Management Accounting

(ii) Project duration is 31 days and cost of crashing is 300.

The Institute of Chartered Accountants of India

Programme Evaluation and Review Technique

(37 days) Crashing cost

1 day (40 + 20)

Revised critical Path :

The Institute of Chartered Accountants of India