310-PROJECT MANAGEMENT

FACULTY:
Dr. CH. VENKATAIAH
B.Tech, MBA, PhD
Associate Professor (Operations, Quality & Project Management)

PROJECT PLANNING
UNIT
II

Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 3
Project Planning
Resource Availability and/or Limits
Due date, late penalties, early completion
incentives
Budget
Activity Information
Identify all required activities
Estimate the resources required (time) to
complete each activity
Immediate predecessor(s) to each activity needed
to create interrelationships
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 4
Project Scheduling and Control Techniques
Gantt Chart
Critical Path Method (CPM)
Program Evaluation and Review Technique
(PERT)
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 5
Graph or bar chart with a bar for each project activity that shows passage of time
Provides visual display of project schedule
Gantt Chart
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 6
History of CPM/PERT
Critical Path Method (CPM)
E I Du Pont de Nemours & Co. (1957) for construction of
new chemical plant and maintenance shut-down
Deterministic task times
Activity-on-node network construction
Repetitive nature of jobs
Project Evaluation and Review Technique (PERT)
U S Navy (1958) for the POLARIS missile program
Multiple task time estimates (probabilistic nature)
Activity-on-arrow network construction
Non-repetitive jobs (R & D work)
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 7
Project Network
Network analysis is the general name given to certain specific techniques which
can be used for the planning, management and control of projects
Use of nodes and arrows
Arrows An arrow leads from tail to head directionally
Indicate ACTIVITY, a time consuming effort that is required to
perform a part of the work.
Nodes A node is represented by a circle
- Indicate EVENT, a point in time where one or more activities start
and/or finish.
Activity
A task or a certain amount of work required in the project
Requires time to complete
Represented by an arrow
Dummy Activity
Indicates only precedence relationships
Does not require any time of effort
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 8
Event
Signals the beginning or ending of an activity
Designates a point in time
Represented by a circle (node)
Network
Shows the sequential relationships among activities using
nodes and arrows
Activity-on-node (AON)
nodes represent activities, and arrows show precedence relationships
Activity-on-arrow (AOA)
arrows represent activities and nodes are events for points in time
Project Network
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 9
AOA Project Network for House
3
2 0
1
3
1 1
1
1 2 4 6 7
3
5
Lay
foundation
Design house
and obtain
financing
Order and
receive
materials
Dummy
Finish
work
Select
carpet
Select
paint
Build
house
AON Project Network for House
1
3
2
2
4
3
3
1
5
1
6
1
7
1 Start
Design house
and obtain
financing
Order and receive
materials
Select paint
Select carpet
Lay foundations
Build house
Finish work
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 10
Situations in network diagram
A
B
C
A must finish before either B or C can start
A
B
C
both A and B must finish before C can start
D
C
B
A
both A and C must finish before either of B or D can
start
A
C
B
D
Dummy
A must finish before B can start
both A and C must finish before D can start
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 11
Concurrent Activities
2 3
Lay foundation
Order material
(a) Incorrect precedence
relationship
(b) Correct precedence
relationship
3
4 2
Dummy
Lay
foundation
Order material
1
2 0
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Activity. It is a clearly defined project element, a job or a
task which requires the consumption of resources including
time. It is denoted by an arrow.
Event. An event describes the start or completion of an
activity. It is denoted by a numbered circle.
Path. A path is an unbroken chain of activities from the
initiating node to some other node, generally to the last
node indicating the end or completion of the project.
Dummy Activity. A dummy activity is that activity which has
a logical function only and consumes no time or resources.
It is denoted by a dotted arrow. There are two types of
dummies:
Identity Dummy. It helps to keep the designation of each
activity unique or different from another.
Dependency Dummy. It helps to keep the logic correct.

Definitions
12
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Activity arrows should be drawn from left to right
indicating progressive approach towards the
ultimate objective or the final event.
Crossing of activity arrows should be avoided.
Arrows should be drawn as straight or bent
lines but not curved lines.
Avoid use of unnecessary dummies.
Activities are set in the order of their execution.
Events are set in the order of their occurrence.

Rules and Conventions
13
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Head event number should be greater than tail
event number. No event is numbered until the
tail event of each activity arrow ending into that
event has been numbered.
There should be no danglers or loops. Danglers
are activities which lead no where. All activities
must be connected to events and the finishing
activities must be connected to the finish event
of the project.

Rules and Conventions
14
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 15
CPM calculation
Path
A connected sequence of activities leading from
the starting event to the ending event
Critical Path
The longest path (time); determines the project
duration
Critical Activities
All of the activities that make up the critical path
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 16
Forward Pass
Earliest Start Time (ES)
earliest time an activity can start
ES = maximum EF of immediate predecessors
Earliest finish time (EF)
earliest time an activity can finish
earliest start time plus activity time
EF= ES + t
Latest Start Time (LS)
Latest time an activity can start without delaying critical path time
LS= LF - t
Latest finish time (LF)
latest time an activity can be completed without delaying critical path time
LS = minimum LS of immediate predecessors
Backward Pass
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management 17
CPM analysis
Draw the CPM network
Analyze the paths through the network
Determine the float for each activity
Compute the activitys float
float = LS - ES = LF - EF
Float is the maximum amount of time that this activity
can be delay in its completion before it becomes a
critical activity, i.e., delays completion of the project
Find the critical path is that the sequence of activities and
events where there is no slack i.e.. Zero slack
Longest path through a network
Find the project duration is minimum project completion
time
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
It is used where activity duration is known with
certainty.
Activities are identified.
Dependency of activities is determined
Network is drawn
Earliest start times and latest finish times are
calculated
Critical path and critical activities are identified
Critical Path Method
18
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Rasoi Appliances wants to launch a newly
designed microwave oven.
Activities required for the launch have been
identified. Their relationship with each other
and the activity duration have also been
determined.

Example
19
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
20
Activity
Symbol
Activity Description Predecessor Time
(days)
A Develop advertising plan - 6
B Develop promotion and training
materials plan
- 7
C Develop training plan - 8
D Schedule Radio,TV and print media
advertising
A 20
E Develop advertising copy A 18
F Prepare promotional material for in-
store introduction
B 9
G Prepare material for training of
stores representatives
B 8
H Conduct pre-introduction advertising
campaign
D, E 7
I Select store representatives for
training
C 2
J Conduct training G, I 14
K Final in-store launch of product F, H and J 10
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
21
8
C
A
B
6
7

Drawing a Network. We can start with
activities A, B and C as they have no
predecessors.

Consider the activities which can follow only A or B or C as
these have been completed. D and E follow A, F and G
follow B and I follows C. Add these activities to the net
work.
Activity H is dependent on the completion of Activities D
and E. Activity J is dependent on completion of Activities G
and I. Add these activities to the network.
A dummy activity L has been drawn. This is an identity
dummy. Add activity K which can start only when activities
H, F and J are completed.
Start from the left and number the nodes as we move to the
right of the network in the order of their appearance. If two or
more nodes are on the same line, number from top to bottom.
If the dummy L had not been put, then node 5 would have
been eliminated and activity E also would have ended at
node 7. In that case, a reference to activity between nodes
2-7 would refer to both D and E causing problems of
unique reference.
D
E
F
G
I
20
18
9
8
2



L
J
H
7
14



K
10

1
2
3
4
5
6
7
8 9
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
The earliest that the project can start is at
time zero.
The earliest finish time for an activity is the
earliest start time + activity duration.
The earliest start time of an activity which is
dependent on two or more activities is the
time at which all the preceding activities are
completed.

Calculating Earliest Start Time (EST)
22
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
23
C
A
B
6
7
8
D
E
F
G
I
20
18
9
8
2
L
J
H
7
14
K
10
0
6
7
8
26
24
15
33 43
1
2
3
4
5
6
7
8 9
At Node 2, EST is = EST at Node 1 + Activity Duration of A
= 0 + 6 = 6
At Node 3, EST is = EST at Node 1 + Activity Duration of B
= 0 + 7 = 7
At Node 4, EST is = EST at Node 1 + Activity Duration of B
= 0 + 8 = 8
Node 7 is the starting event for activity J. Activity J can start only when
activities I and G are completed. Activity I can be completed earliest by 8 + 2
= 10, while G can end earliest on 7 + 8 = 15. Hence the earliest that J can
start is the end of 15th day.
At Node 6, EST is = EST at Node 2 + Activity Duration of D =
6 + 20 = 26, and (from Node 5 to Node 7) 24 + 0 = 24. Earliest H can start
is 26.
At Node 5, EST is = EST at Node 2 + Activity Duration of E
= 6 + 18 = 24
At Node 8, we get
From 7 to 8, 26 + 7 = 33. From 3 to 8, 7 + 9 = 16
From 6 to 8, 15 + 14 = 29. Earliest K can start is 33.
At Node 9, EST = EST at Node 8 + duration of activity K
= 33 + 10 = 43
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
The project will take 43 days.
Start form Node 9 as 43 days and work
backward to find out the latest time when
the starting event of an activity must occur,
or the latest time by which all preceding
activities must finish so that the project is
not delayed

Latest Finish Time
24
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
25
C
A
B
6
7
8
D
E
F
G
I
20
18
9
8
2
L
J
H
7
14
K
10
0
6
7
8
26
24
15
33 43
43 33
26
19
26
17
0
11
6
At Node 8, LFT is = LFT at Node 9 Activity Duration of K
= 43 10 = 33
At Node 6, LFT is = LFT at Node 8 Activity Duration of H
= 33 7 = 26
At Node 7, LFT is = LFT at Node 8 Activity Duration of J
= 33 14 = 19
At Node 5, LFT is = LFT at Node 7 Activity Duration of L
= 26 0 = 26
At Node 3, LFT is = LFT at Node 6 Activity Duration of G or
LFT at Node 8 Activity Duration of F
= 19 8 =11 or 33 9 = 24
If event 3 occurs at 24 then the project will get delayed. LFT is = 11
At Node 4, LFT is = LFT at Node 6 Activity Duration of I
= 19 2 = 17
At Node 2, LFT at Node 5 Activity Duration of E or
LFT at Node 7 Activity Duration of D.
Take the smallest value. At Node 2, LFT is = 6
At Node 1, LST = 0
1
2
3
4
5
6
7
8 9
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Spare time in an activity is called float. It is
used to economise on resources without
affecting the overall duration of the project.
Types of floats
Total float
Free float
Interference float
Independent float
Floats
26
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Total Float. It is the spare time available on any given
activity if the tail event occurred at its earliest time
and the head event at its latest time.
Total Float = Time Latest at Head Time Earliest at
Tail Activity Duration.
= 30 4 3 = 23

27
4EST
26EFT
30LST
8LFT
G
3
Total Float. = 30 4 3 = 23
Free Float. The spare time available on an activity if both the tail and the
head events occur at their earliest time. If this spare time is used up
during the execution of this activity, it will have no effect on subsequent
activities.
Free Float = Time Earliest Head Time Earliest Tail
Activity Duration
= 26 4 3 = 19

Total Float. = 30 4 3 = 23
Free Float. = 26 4 3 = 19
Interference Float. It is equal to total float less free float. If this float is used
up in an activity, it will interfere with the availability of floats available for
subsequent activities.
Interference Float = Total Float Free Float
= 23 19 = 4

Total Float. = 30 4 3 = 23
Free Float. = 26 4 3 = 19
Interference Float. = 23 19 = 4
Independent Float. The spare time available in an activity which is
neither affected by the use of float by preceding activities nor
does it affect the float available in subsequent activities.
Independent Float = Time Earliest Head Time
Latest Tail Duration.
= 26 8 3 = 15

Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
28
Activity Total Float
(TL Head TE
Tail Duration)
Free Float
(TE Head TE
Tail Duration )
Interference
Float
(Total Float
Free Float)
Independent
Float
(TE Head TL
Tail Duration)
A 6 0 6 =0
B 11-0-7=4 7-0-7=0 4-0=4 7-0-7=0
C 17-0-8=9 8-0-8=0 9-0=9 8-0-8=0
D 26-6-20=0
E 26-6-18=2 24-6-18=0 2-0=2 24-6-18=0
F 33-7-9=17 33-7-9=17 17-17=0 33-11-9=13
G 19-7-8=4 15-7-8=0 4-0=4 15-11-8 (0)
H 33-26-7=0
I 19-8-2=9 15-8-2=5 9-5=4 15-17-2 (0)
J 33-15-14=4 33-15-14=4 4-4=0 33-19-14=0
K 43-33-10=0
Calculation of floats
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Problem for Practice
29
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
PERT Programme Evaluation and
Review Technique is used in
probabilistic situations when the duration
of activities is not known with certainty.
Three time estimates are used for activity
duration pessimistic time, optimistic time
and most likely time.
Mean time for each activity is calculated.
Network is drawn as for CPM with mean
times as activity durations

PERT Network
30
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Critical activities are identified.
Standard deviation on the critical path is
calculated.
Using the standard deviation and the mean
and assuming normal distribution, project
duration with different levels of confidence or
vice versa can be computed.
PERT Network
31
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management




Standard deviation cannot be added. Variance can be
added. Standard deviation on the critical path is
PERT - Network
32
4
Mean Time
6
o m p
t t t

Standard Deviation
6
p o
t t

2 2
...
A B
SD SD
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
PERT - Example
33
Activity Predecessor Optimistic Time
(t
o
)
Most likely
Time (t
m
)
Pessimistic
Time (t
p
)
A - 1 2 3
B - 1 2 3
C - 1 2 3
D A 1 2 9
E A 2 3 10
F B 3 6 15
G B 2 5 14
H D, E 1 4 7
J C 4 9 20
K J, G 1 2 9
L H, F, K,
Finish
4 4 4
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Solution
34
Activity Optimistic
Time (t
o
)
Most
likely
Time (t
m
)
Pessimistic
Time (t
p
)
Mean
Time
Standard
Deviation
A 1 2 3 2 0.33
B 1 2 3 2 0.33
C 1 2 3 2 0.33
D 1 2 9 3 1.33
E 2 3 10 4 1.33
F 3 6 15 7 2.00
G 2 5 14 6 2.00
H 1 4 7 4 1.00
J 4 9 20 10 2.67
K 1 2 9 3 1.33
L 4 4 4 4 0
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Draw the network and find critical activities
35
5
1
1
1 9 8
7
6
5
4
3
2
B
H E
D
A
L F
C
G
J
K
2
3
4 4
2
6
7
2 10
3
4
19 15
12 2
6
0
2
2
1
9
1
5
1
2
2
0
1
1
7
6
C, J, K and L are critical activities. Critical path is 1 4 7 8 9
Project will be completed in 19 days or less with 50% confidence.
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
36
Activity Optimistic
Time (t
o
)
Most
likely
Time (t
m
)
Pessimistic
Time (t
p
)
Mean
Time
Standard
Deviation
C 1 2 3 2 0.33
J 4 9 20 10 2.67
K 1 2 9 3 1.33
L 4 4 4 4 0




2 2 2 2
2 2 2 2
S. D.
0.33 2.67 1.33 0
3

C J K L
SD SD SD SD

Dr. CH. VENKATAIAH

Associate Professor
310-Project Management
37
With 84% level of confidence how much time would the
project take?
PERT assumes that the distribution of the total project
completion time is normal. 84% represents Mean + 1
standard deviation. We can say with 84% level of
confidence that the project will finish in 22 weeks.
What are the chances that the project will finish in 20
weeks?
20 19
0.33
3
x
z

19 20
0.33 SD
From normal distribution tables the probability when z =0.33 is 0.6290.
There is a 63% chance that the project will finish in 20 weeks.
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
PERT is a probabilistic model and is based on three time
estimates. It is used mainly for projects where the activity
durations are uncertain, like research and development
projects. Levels of confidence and probabilities can be
associated with the completion date of a project.
CPM is based on certainty of the activity durations. It is
used for projects where there is certainty about the time
that each activity would take. The project completion
duration is not probabilistic but is certain.
Differences PERT and CPM
38
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Any Queries???
39