Network Planning

Methods
Example PERT &CPM :
Saint Paul’s Hospital

3-1 © 2004 by Prentice Hall, Inc., Upper Saddle

Terms Used in Project Management
Activity : A certain amount of work or task required in
the project
Activity duration: In CPM the best estimate of time to
complete an activity . In PERT the expected time or
average time to complete an activity
Critical activity : An activity that has no room for
schedule slippages : if it slips the entire the entire
project completion will slip. An activity with zero slack

3-2 © 2004 by Prentice Hall, Inc., Upper Saddle

♦ Critical path: The chain of critical activities for
the project .The longest path through the network
♦ Dummy activity :An activity that consumes no
time but shows precedence among activities
♦ Earliest finish (EF): The earliest that an activity
can finish from the beginning of the project
♦ Earliest start ( ES): The earliest that an activity
can start from the beginning of the project

3-3 © 2004 by Prentice Hall, Inc., Upper Saddle

♦ Event :A beginning , a completion point ,or a
milestone accomplishment within the project .
An activity begins and ends with events
♦ Latest finish (LF) : The latest that an activity can
finish from the beginning of the project
♦ Latest start (LS) :The latest that an activity can
start from the beginning of the project
♦ Most likely time ( t m) : The time for completing the
activity that is is the consensus best estimate, used in
PERT

3-4 © 2004 by Prentice Hall, Inc., Upper Saddle

♦ Optimistic Time (to): The time for completing an
activity if all goes well : used in PERT
♦ Pessimistic Time (tp): The time for completing an
activity if bad luck is encountered : used in PERT
♦ Predecessor activity : An activity that must occur
before another activity .
♦ Slack : The amount of time that an activity or group
of activities can slip without causing a delay in the
completion of the project
♦ Successor activity : An activity that must occur
after another activity

3-5 © 2004 by Prentice Hall, Inc., Upper Saddle

Conventions used in drawing network
diagrams (Arrows & Circles )
♦ Activity on Arrow (AOA) : The activities are
denoted by Arrows and events are denoted by
circles

♦ Activity on Node(AON) : Activities are denoted

by circles(or nodes) and the precedence relation
ships between activities are indicated by arrows

3-6 © 2004 by Prentice Hall, Inc., Upper Saddle

PERT / CPM
Network planning methods that
generate:
♦ Relationship between activities
♦ Project duration
♦ Critical path
♦ Slack for non – critical activities
♦ Crashing (cost / time trade-offs)
♦ Resource usage

3-7 © 2004 by Prentice Hall, Inc., Upper Saddle

 St. Paul’s Hospital
Immediate
Activity Description Predecessor(s)
A Select administrative and medical —
staff. —
B Select site and do site survey. A
C Select equipment. B
D Prepare final construction plans and B
layout.
E Bring utilities to the site. A
F Interview applicants and fill positionsC
in nursing, D
support staff, maintenance, and A
security. E,G,H
G Purchase and take delivery of F,I,J
equipment.
H Construct the hospital.
3-8 © 2004 by Prentice Hall, Inc., Upper Saddle
 St. Paul’s Hospital
Immediate
AON Network
Activity Description
I Predecessor(s)
A Select administrative and medical —
staff. —
A F K
B Select site and do site survey. A
C Select equipment. B
D Prepare final construction plans and B
layout. Start C G Finish

E Bring utilities to the site. A

F Interview applicants and fill positionsC
in nursing, B D H J D
support staff, maintenance, and A
security. E,G,H
G E
Purchase and take delivery of F,I,J
equipment.
H Construct the hospital.
3-9 © 2004 by Prentice Hall, Inc., Upper Saddle
 St. Paul’s Hospital
Immediate
Completion Time I
Activity Description
15 Predecessor(s)
A Select administrative and medical —
staff. A F K —
12 10 9
B Select site and do site survey. A
C Select equipment. B
D Prepare
Start final construction
C G plansFinish and B
10 35
layout.
E Bring utilities to the site. A
B D H J
F Interview 9
applicants
10
and
40
fill positions
4
C
in nursing, D
support staff, maintenance, and A
E
security. 24
E,G,H
G Purchase and take delivery of F,I,J
equipment.
H Construct the hospital.
3-10 © 2004 by Prentice Hall, Inc., Upper Saddle
 Path Expected Time (wks)
St. Paul’s Hospital
A-I-K 36
A-F-K 31 Critical
Completion Time Immediate
A-C-G-J-K 70 Path
Activity Description
I Predecessor(s)
15 B-D-H-J-K 72
A Select administrative B-E-J-K
and medical 46 —
staff. A F K —
B Select
12 site and
10 do site survey.
9 A
C Select equipment. B
D Prepare finalC construction
G
plans and B
layout.Start 10 35
Finish

E Bring utilities to the site. A

F Interview
B applicants
D H and fill
J positionsC
in nursing, 9 10 40 4 D
support staff, maintenance, and A
security. E
E,G,H
G Purchase and 24 take delivery of F,I,J
equipment.
H Construct the hospital.
3-11 © 2004 by Prentice Hall, Inc., Upper Saddle
 Critical Path
♦ The longest path in the network
♦ Defines the shortest time project can be completed
♦ Critical path activity delay project delay

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 Earliest Start and
Earliest Finish
♦ Begin at starting event and work
forward
♦ ES is earliest start
♦ ES = 0 for starting activities
Activi
♦ ES = Maximum EF of all
predecessors for ES ty
Nam
EF
non-starting activities e
♦ EF is earliest finish
LS LF
♦ EF = ES + Activity time Activi
ty
Durati
3-13 on
© 2004 by Prentice Hall, Inc., Upper Saddle
Earliest Start / Earliest
FinishI

15

A F K

12 10 9

C G
Start Finish
10 35

B D H J

9 10 40 4

24
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Earliest Start / Earliest
Finish 12 I 27
Earliest start time 15 Earliest finish time

0 A 12 12 F 22 63 K 72
12 10 9

12 C 22 22 G 57
Start Finish
Critical 10 35
path

0 B 9 9 D 19 19 H 59 59 J 63
9 10 40 4

9 E 33
24
3-15 © 2004 by Prentice Hall, Inc., Upper Saddle
 Latest Start and Latest
Finish
♦ Begin at ending event and work
backward
♦ LF is latest finish
♦ LF = Maximum EF for
ending activities Activi
♦ LF = Minimum LS of all ES ty EF
successors for Nam
non-ending activities e
♦ LS is latest start
♦ LS = LF – Activity time
LS Activi
LF
ty
Durati
3-16 on
© 2004 by Prentice Hall, Inc., Upper Saddle
 Latest Start / Latest
Finish 12 I 27
48
Latest start time 15 63 Latest finish time

0 A 12 12 F 22 63 K 72
2 14 53 63 63 72
12 10 9

12 C 22 22 G 57
Start 24 59 Finish
14 24
Critical 10 35
path

0 B 9 9 D 19 19 H 59 59 J 63
0 9 19 19 59 59 63
9 9 10 40 4

What do you
9 E 33
35 59 notice about
24
ES/LS &
3-17 © 2004 by Prentice Hall, Inc., Upper Saddle
Activity Slack Analysis
12 I 27

Slack
Latest = LS
start – ES
time
48
15 63 Latest finish time
or A
0 12 12 F 22 63 K 72
Slack = LF12– EF
2 14 53 63
10
63 72
9

12 C 22 22 G 57
Start Finish
Slack K = 63Critical
– 63 = 0 10
14 24 24
35 59

path
or
0 B 9 9 D 19 19 H 59 59 J 63
SlackK = 72 –
9 972 = 0 10
0 919 19
40
59 59 63
4

9 E 33
35 59
24
3-18 © 2004 by Prentice Hall, Inc., Upper Saddle
Activity Slack Analysis
12 I 27
Node Duration ES LS 48Slack
63
Latest start time 15 Latest finish time
A 12 0 2 2
B 9 A012 0 0
0 12 F 22 63 K 72
C 10 2 1214 14 53 2 63 63 72
D 10 129 9 10
0 9
E 24 9 35 26
F 10 12 53 12 41
C 22 22 G 57
Start
G 35 22 24 Finish
14 2 24 24 59
Critical 10 35
H 40 19 19 0
path
I 15 12 48 36
J 4 0 59
B 9 59 9 D0 19 19 H 59 59 J 63
K 6 0 63 9 63 9 0 19 19 59 59 63
9 10 40 4

Activity slack = maximum

9 E 33
delay
35 59
time
24
Critical
3-19 path activities
© 2004 by Prentice Hall, Inc., Upper Saddle
Activity Slack

How much would we like to

reduce
the time for activity B?
5
B 25
5 20 25
A 25
D35
0 5
Start Finish
0 5 5 25 10 35

5
C 20
10 15 25

3-20 © 2004 by Prentice Hall, Inc., Upper Saddle

Activity Times & Project
Times
♦ 3 activity time estimates
♦ Optimistic times (a)
♦ Most-likely time (m)

♦ Pessimistic time (b)
♦ Follow beta distribution
♦ Expected time: t = (a + 4m + b) / 6

♦ Variance of times: v = (b - a)2 / 6
♦ Expected project time: 
T = sum of critical path activity times, t
♦ Project variance:
V = sum of critical path activity variances

3-21 © 2004 by Prentice Hall, Inc., Upper Saddle

 Completion Time for
Noncritical Activities
♦ Variability of times for activities on
non-critical paths must be considered
when determining
the probability of finishing in a
specified time.
♦ Variation in non-critical activity may
cause
change in critical path.

3-22 © 2004 by Prentice Hall, Inc., Upper Saddle

Cost / Time Trade-offs
Most activities can be done
faster if you
pay more money
♦ Work overtime / hire more people /
rent extra equipment / incentive
contracts
♦ PERT / CPM have the ability to
crash
a schedule – to shorten activity
time in a network to reduce project
completion time.
3-23 © 2004 by Prentice Hall, Inc., Upper Saddle
 Cost / Time
Relationship
8000 —

7000 —
Crash cost
Direct cost (dollars)

6000 —
Activity
5000 — B
4000 — Normal cost
3000 —

0—

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5 6 7 8 9 10 11

Crash Normal
time 3-24 time© 2004 by Prentice Hall, Inc., Upper Saddle