Network planning

with PERT
 Network analysis: methodology
PERT project evaluation and review
technique
CPM critical path method

• enumeration of necessary activities, with

indication of immediately preceding and
necessarily finished activities
• activities placed in a logical network by means of
presentation with arrows. Each arrow presents
an activity and is preceded and followed by an
event
 Network analysis
• Analysing and planning of the subsequent
activities, necessary to complete the
project
• Basis of cost calculation and timing of
project
• Evaluation of possible measures to reduce
the duration of the project
• Basis of monitoring and evaluation of the
project
 Definitions
• A network is a logical presentation of the
activities of a project. It shows the
relations that exist between activities
• An activity is a basic task necessary to
complete the project. The activity needs
time and resources
• An event is a situation that defines the
beginning or the end of a (number of)
activit(y)(ies)
 0 0
7 24
7 24
B
2 5
110
C
A
7 D 24 0 F 31
17 E 26
24

1 G H J
Start 3 6 7
23 15 7 Finish
50 57
0 L
K 14 M 4 50
0 57
33
0
4 0
0
38
Critical path
sequence
TL
Dummy
Activity
= TE
min=slack
(TLkf
of
normal
max((TEkp
activities
time
–TA)
activity
= LF
for
+ TA)
–which
with
EF duration
TE = TL0 46

8
 Activity Schedule

– ES earliest starting time

• ES = TE start event of the activity
– EF earliest finishing time
• EF = ES + TA
– LF latest finishing time
• LF = TL end event of the activity
– LS latest starting time
• LS = LF – TA
 ES LS EF LF Activity
(TE) (LF-TA) (ES+TA) (TL) slack
(LF-EF)
A 0 0 7 7 0
B 7 13 18 24 6
C 24 26 55 57 2
D 7 7 24 24 0
E 24 24 24 24 0
F 24 24 50 50 0
G 0 1 23 24 1
H 24 35 39 50 11
J 50 50 57 57 0
K 0 5 33 46 13
L 24 32 38 46 8
M 38 46 42 50 8
 Float
• Free float = ES of the next activity – EF of the activity
• Total float = LF – ES -TA
• interfering float = total float – free float
• independent float = ES of the next activity – LF of the
activity
Crash activities
 4 4 10 15
6
B D 2 17 17 23 23
0 0 4
6 6
A F G
4 7
2
C E

4 8 10 10
The optimal crash sequence therefore is;
A - B @ £500 per unit time.
F - G @ £1000 per unit time.
B - E @ £2000 per unit time.
E - F @ £3000 per unit time
 Crash A-B
.Crash A -B by 2 weeks.
• Project completion reduces by 2 weeks.
• Project cost increases by £1000.
• Revised project cost = £19,500 + £1000 = £20,500
• Revised project completion = 23 - 2 = 21 weeks.
• Check the critical path

2 2 8 13
6
B D 2 15 15 21 21
0 0 2
6 6
A F G
4 7
2
C E

4 6 8 8
 Crash F-G
Crash F -G by 1 week.
• Project completion reduces by 1 weeks.
• Project cost increases by £1000.
• Revised project cost = £20,500 + £1000 = £21,500
• Revised project completion = 21 -1 = 20 weeks.
• Check the critical path

2 2 8 13
6
B D 2 15 15 20 20
0 0 2
6 5
A F G
4 7
2
C E

4 6 8 8
 Crahs B-E
Crash B - E by 1 week.
• Project completion reduces by 1 weeks.
• Project cost increases by £2000.
• Revised project cost = £21,500 + £2000 = £23,500
• Revised project completion = 20 -1 = 19 weeks
• Check the critical path

2 2 8 12
6
B D 2 14 14 19 19
0 0 2
5 5
A F G
4 7
2
C E

4 5 7 7
 Crash E-F
Crash E - F by 1 week.
• Project completion reduces by 1 weeks.
• Project cost increases by £3000.
• Revised project cost = £23,500 + £3000 = £26,500
• Revised project completion = 19 -1 = 18 weeks
• Final critical path

2 2 8 11
6
B D 2 13 13 18 18
0 0 2
5 5
A F G
4 6
2
C E

4 5 7 7
 Final crash curve
Cost 18 weeks
@ £26500
£26.5K
19 weeks
Crash E - F @ £23500

20 weeks
£23.5K
@ £21500
Crash E - F
21 weeks
£21.5K @ £20500
Crash E - F
£20.5K
Crash E - F
£19.5K
Original condition

18 19 20 21 23 Time
 Typical crash curve
Cost
Cost-ineffective crash.

Maximum effective crash

Minimum
cost

Origin

Time
 Typical extended crash curve

Cost Non-critical
crashing
Maximum
crash
Optimum time-cost
point

Best
cost
Fixed costs

Best time
 CPM with Uncertainty

• Steps leading to network are same as before

• Added complexity of having time estimates
– Optimistic Time =a
– Most Likely Time=m
– Pessimistic time=p
• Expected time calculated as
ET=(a+4m+b)/6
• Variance calculated as
σ2
=( b - a) 2 / 36
 CPM with uncertainty
• Given any path we can calculate
– Expected completion time of path
• Just add the expected times (ET)
– Variance of the path
• Just add the variances
• Critical Path Determined Exactly as before
– Only difference, we will now use expected times.
 Completion Probability
Assuming (which is the case) that the
completion time follows a normal
distribution with mean as ET and
variance as σ 2
, we can calculate the
following:
What is the probability that the project is
completed in T time units.
 Completion Probability
Take the critical path( determined as before,
but now with expected times). We know ET
for this critical path. We also know its std. dev
(σ ) . We will always assume that the time of
completion is Normally distributed.
Hence: If X=Time of completion.

T − ET
P( X ≤ T ) = P( Z ≤ )
σ